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| US growth and trade data disappoint but Trump promises 'revved-up economy' - as it happened | |
| (35 minutes later) | |
| 2.49pm GMT | |
| 14:49 | |
| Wall Street opens lower | |
| Ahead of the much anticipated address to the US Congress by President Trump later and following slightly disappointing trade and GDP figures, Wall Street has slipped back from its record highs. | |
| If the Dow Jones Industrial Average closes at a new record high, it will equal its best ever winning streak of 13 days. But in early trading the Dow is down 18 points or 0.09%, while the S&P 500 opened down 0.16% and the Nasdaq Composite 0.12%. | |
| On that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back tomorrow. | |
| 2.47pm GMT | |
| 14:47 | |
| Here is our story on the BHS pension scheme, from Graham Ruddick: | |
| Sir Philip Green has agreed to pay up to £363m into the BHS pension scheme as part of a cash settlement with the Pensions Regulator. | |
| BHS collapsed into administration last April, leading to the loss of 11,000 jobs and leaving a £571m pension deficit. | |
| The collapse of the retailer led to a high-profile parliamentary investigation and calls for Green to be stripped of his knighthood. | |
| Green said the settlement represented a “significantly better outcome” for former BHS staff than the scheme entering the Pension Protection Fund, a lifeboat for failed pension funds. | |
| The Pensions Regulator started legal action against Green last year in an attempt to force him to contribute cash to the pension scheme. This enforcement action has now been halted. | |
| The full story is here: | |
| 2.40pm GMT | |
| 14:40 | |
| Sir Philip Green settles BHS pension dispute | |
| Sir Philip Green has agreed to pay £363m to rescue the BHS pension scheme from the pension protection fund. | |
| Green says BHS settlement "significantly better outcome" than entering Pension Protection Fund for pensioners | |
| 2.13pm GMT | 2.13pm GMT |
| 14:13 | 14:13 |
| The slightly underwhelming US data is not likely to hinder further rate rises from the Federal Reserve this year, according to the Centre for Economics and Business Research, but perhaps not in March. Its senior economist Oliver Kolodseike said: | The slightly underwhelming US data is not likely to hinder further rate rises from the Federal Reserve this year, according to the Centre for Economics and Business Research, but perhaps not in March. Its senior economist Oliver Kolodseike said: |
| Although slightly disappointing, the release in unlikely to significantly change the mood at the Federal Reserve Bank. With durable goods orders and retail sales data beating expectations, thereby adding to signs that the US economy is picking up pace again at the beginning of this year and inflation nearing a five-year high, Cebr is pencilling in three rate hikes in 2017 and we see May as the most likely starting point for the process of normalising monetary policy. | Although slightly disappointing, the release in unlikely to significantly change the mood at the Federal Reserve Bank. With durable goods orders and retail sales data beating expectations, thereby adding to signs that the US economy is picking up pace again at the beginning of this year and inflation nearing a five-year high, Cebr is pencilling in three rate hikes in 2017 and we see May as the most likely starting point for the process of normalising monetary policy. |
| We believe that Fed chair Janet Yellen will use the March meeting instead to prepare markets for a move at the following meeting, after the Fed last year faced some criticism for some unclear communication about interest rates. | We believe that Fed chair Janet Yellen will use the March meeting instead to prepare markets for a move at the following meeting, after the Fed last year faced some criticism for some unclear communication about interest rates. |
| That said, recent comments from policymakers suggest that the door remains open for a potential rate rise when the Federal Open Market Committee (FOMC) meet on March 15th. The February Jobs Report is published a few days before the meeting and could potentially steer policy makers towards a rate hike sooner rather than later... | That said, recent comments from policymakers suggest that the door remains open for a potential rate rise when the Federal Open Market Committee (FOMC) meet on March 15th. The February Jobs Report is published a few days before the meeting and could potentially steer policy makers towards a rate hike sooner rather than later... |
| We currently project the US economy to grow 2.4% in 2017 which would be stronger than the 1.6% rate seen in 2016, and above the average trend since the financial crisis. Of course, much depends on the extent to which the US government can implement reforms. | We currently project the US economy to grow 2.4% in 2017 which would be stronger than the 1.6% rate seen in 2016, and above the average trend since the financial crisis. Of course, much depends on the extent to which the US government can implement reforms. |
| 1.50pm GMT | 1.50pm GMT |
| 13:50 | 13:50 |
| The US trade deficit was also worse than expected. | The US trade deficit was also worse than expected. |
| The advance January goods trade balance came in at -$69.2bn, compared to estimates of -$66bn and December’s figure of $64.4bn. | The advance January goods trade balance came in at -$69.2bn, compared to estimates of -$66bn and December’s figure of $64.4bn. |
| 1.39pm GMT | 1.39pm GMT |
| 13:39 | 13:39 |
| US GDP growth slows in fourth quarter | US GDP growth slows in fourth quarter |
| The US economy grew by less than expected in the final three months of 2016, according to new figures from the Commerce Department. | The US economy grew by less than expected in the final three months of 2016, according to new figures from the Commerce Department. |
| With Donald Trump promising a “revved up” economy, the last growth figures under the old administration showed GDP rising by an annualised 1.9% in the fourth quarter. This was in line with initial estimates, but less than the 2.1% expected by economists and well below the 3.5% seen in the third quarter. | With Donald Trump promising a “revved up” economy, the last growth figures under the old administration showed GDP rising by an annualised 1.9% in the fourth quarter. This was in line with initial estimates, but less than the 2.1% expected by economists and well below the 3.5% seen in the third quarter. |
| For the whole of 2016, the US economy grew by 1.6%, as expected, its worst performance since 2011. | For the whole of 2016, the US economy grew by 1.6%, as expected, its worst performance since 2011. |
| The Commerce Department said: | The Commerce Department said: |
| The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, residential fixed investment, nonresidential fixed investment, and state and local government spending. These increases were partly offset by negative contributions from exports and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. | The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, residential fixed investment, nonresidential fixed investment, and state and local government spending. These increases were partly offset by negative contributions from exports and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. |
| The deceleration in real GDP in the fourth quarter primarily reflected a downturn in exports, an acceleration in imports, and a downturn in federal government spending that were partly offset by an upturn in residential fixed investment, an acceleration in private inventory investment, and an upturn in state and local government spending. | The deceleration in real GDP in the fourth quarter primarily reflected a downturn in exports, an acceleration in imports, and a downturn in federal government spending that were partly offset by an upturn in residential fixed investment, an acceleration in private inventory investment, and an upturn in state and local government spending. |
| Updated | Updated |
| at 1.55pm GMT | at 1.55pm GMT |
| 12.45pm GMT | 12.45pm GMT |
| 12:45 | 12:45 |
| Dow close to longest ever winning streak | Dow close to longest ever winning streak |
| The Dow Jones Industrial Average closed at a record high for the twelfth trading day in a row on Monday, and is two days off its longest ever winning streak. | The Dow Jones Industrial Average closed at a record high for the twelfth trading day in a row on Monday, and is two days off its longest ever winning streak. |
| If it closes higher on Tuesday it will equal the 13 day run in January 1987, and a similar move on Wednesday will see it set a new record. | If it closes higher on Tuesday it will equal the 13 day run in January 1987, and a similar move on Wednesday will see it set a new record. |
| At the moment, the US futures are indicating a flat open, but much will depend on how investors feel ahead of Donald Trump’s address to Congress after the market closes - and their reaction to what he has said when trading begins on Wednesday. | At the moment, the US futures are indicating a flat open, but much will depend on how investors feel ahead of Donald Trump’s address to Congress after the market closes - and their reaction to what he has said when trading begins on Wednesday. |
| There is also the small matter of some new US data due shortly, in form of growth and trade figures. Mihir Kapadia, chief executive of Sun Global Investments, said: | There is also the small matter of some new US data due shortly, in form of growth and trade figures. Mihir Kapadia, chief executive of Sun Global Investments, said: |
| Economists have been forecasting a growth rate of 1.6% for 2016, something which the current government has constantly criticised as being too pessimistic. The trade deficit is also expected to widen to $66 billion, from $65 billion in December, which may be used by the administration as supporting arguments for protectionism. | Economists have been forecasting a growth rate of 1.6% for 2016, something which the current government has constantly criticised as being too pessimistic. The trade deficit is also expected to widen to $66 billion, from $65 billion in December, which may be used by the administration as supporting arguments for protectionism. |
| 12.05pm GMT | 12.05pm GMT |
| 12:05 | 12:05 |
| More from Trump: | More from Trump: |
| Trump doubles down to @FoxNews says "I'm not touching Social Security" when it comes to budget cuts | Trump doubles down to @FoxNews says "I'm not touching Social Security" when it comes to budget cuts |
| 12.02pm GMT | 12.02pm GMT |
| 12:02 | 12:02 |
| Trump: extra defence spending will come from "a revved up economy" | Trump: extra defence spending will come from "a revved up economy" |
| Back with Trump, and in his Fox interview he is asked how he will fund the extra spending on defence. | Back with Trump, and in his Fox interview he is asked how he will fund the extra spending on defence. |
| He is told that saving money from the environment and state department budget is not enough to cover his proposed increases. | He is told that saving money from the environment and state department budget is not enough to cover his proposed increases. |
| He says, “Well, I think the money is going to come from a revved up economy. | He says, “Well, I think the money is going to come from a revved up economy. |
| “I mean you look at the kind of numbers we’re doing, we were probably GDP of a little more than 1% and if I can get that up to three or maybe more, we have a whole different ball game...And that’s what we’re looking to do.” | “I mean you look at the kind of numbers we’re doing, we were probably GDP of a little more than 1% and if I can get that up to three or maybe more, we have a whole different ball game...And that’s what we’re looking to do.” |
| .@POTUS expects he'll be able to get some of the $54B increase in military spending "from a revved up economy" pic.twitter.com/OJKMAs7geM | .@POTUS expects he'll be able to get some of the $54B increase in military spending "from a revved up economy" pic.twitter.com/OJKMAs7geM |
| Here he previews the topics for his address to Congress later: | Here he previews the topics for his address to Congress later: |
| EXCLUSIVE: @POTUS previews his address to Congress tonight, says he'll discuss health care, the military, and the border pic.twitter.com/fyKF2gd2jU | EXCLUSIVE: @POTUS previews his address to Congress tonight, says he'll discuss health care, the military, and the border pic.twitter.com/fyKF2gd2jU |
| 11.22am GMT | 11.22am GMT |
| 11:22 | 11:22 |
| As flagged earlier, the British Chambers of Commerce is holding its annual meeting in London at the moment, and our politics live blog is covering the appearances from George Osborne and John McDonnell, and the other attendees. | As flagged earlier, the British Chambers of Commerce is holding its annual meeting in London at the moment, and our politics live blog is covering the appearances from George Osborne and John McDonnell, and the other attendees. |
| You can follow all the action here: | You can follow all the action here: |
| 11.16am GMT | 11.16am GMT |
| 11:16 | 11:16 |
| Trump: we need to spend a lot more on defence | Trump: we need to spend a lot more on defence |
| President Trump is giving an interview on Fox News ahead of his address to Congress later. | President Trump is giving an interview on Fox News ahead of his address to Congress later. |
| In the pre-recorded interview, he was asked whether the $54bn increase in defence spending he was proposing was enough, and he said it could be $30bn more, but he would be involved in negotiating the contracts. “There are many boats and planes we are, individually spending too much on...We will get a lot more product for our buck....We saved $700m plus on a F35 after I got involved... We saved a lot of money on aeroplanes and that money will substantially increase.” | In the pre-recorded interview, he was asked whether the $54bn increase in defence spending he was proposing was enough, and he said it could be $30bn more, but he would be involved in negotiating the contracts. “There are many boats and planes we are, individually spending too much on...We will get a lot more product for our buck....We saved $700m plus on a F35 after I got involved... We saved a lot of money on aeroplanes and that money will substantially increase.” |
| "We will be having the greatest military that we ever had by the time I finish." -@POTUS pic.twitter.com/Nt6AouQfsZ | "We will be having the greatest military that we ever had by the time I finish." -@POTUS pic.twitter.com/Nt6AouQfsZ |
| Here’s our report of a pre-released segment where Trump accuses Barack Obama of organising protests against him. | Here’s our report of a pre-released segment where Trump accuses Barack Obama of organising protests against him. |
| Updated | Updated |
| at 12.51pm GMT | at 12.51pm GMT |
| 11.01am GMT | 11.01am GMT |
| 11:01 | 11:01 |
| Troika inspectors return to Greece | Troika inspectors return to Greece |
| Helena Smith | Helena Smith |
| Over in Greece bailout monitors are resuming a stalled compliance review that recently reignited fears over the country’s ability to remain in the euro. From Athens, Helena Smith reports: | Over in Greece bailout monitors are resuming a stalled compliance review that recently reignited fears over the country’s ability to remain in the euro. From Athens, Helena Smith reports: |
| In a long-awaited moment for Greece, the anxiously awaited return of monitors has finally begun. This morning, inspectors representing the European Commission, euro zone bailout fund, IMF and European Central Bank all filed into the finance ministry to discuss energy reforms, fiscal issues and privatizations. | In a long-awaited moment for Greece, the anxiously awaited return of monitors has finally begun. This morning, inspectors representing the European Commission, euro zone bailout fund, IMF and European Central Bank all filed into the finance ministry to discuss energy reforms, fiscal issues and privatizations. |
| Testing Athens’ compliance with agreed reforms is at the heart of the review, a review that once completed will be key to releasing the €7bn plus the country requires to honour debt repayments in July. But, so too, are differences over a raft of new reforms that creditors want Athens to adopt once its current three-year €86bn rescue programme in August 2018. | Testing Athens’ compliance with agreed reforms is at the heart of the review, a review that once completed will be key to releasing the €7bn plus the country requires to honour debt repayments in July. But, so too, are differences over a raft of new reforms that creditors want Athens to adopt once its current three-year €86bn rescue programme in August 2018. |
| Without further pension cuts and tax hikes, the IMF does not think Greece will be able to achieve the high primary surplus of 3.5 % that eurozone lenders are demanding as of next year. The monitors, who are backed by technical teams, are keen to make enough progress so that the IMF – which has advised but not formally signed up to the bailout – finally participates in the programme. | Without further pension cuts and tax hikes, the IMF does not think Greece will be able to achieve the high primary surplus of 3.5 % that eurozone lenders are demanding as of next year. The monitors, who are backed by technical teams, are keen to make enough progress so that the IMF – which has advised but not formally signed up to the bailout – finally participates in the programme. |
| For leading lenders such as Germany and the Netherlands, IMF oversight is key to easing concerns in an electoral year that good money is not being thrown after bad when it comes to Greece. Prime minister Alexis Tsipras believes the review can be concluded by March 20 when the eurogroup next meets. Auditors have signalled they do not wish to be in Athens for more than a week. | For leading lenders such as Germany and the Netherlands, IMF oversight is key to easing concerns in an electoral year that good money is not being thrown after bad when it comes to Greece. Prime minister Alexis Tsipras believes the review can be concluded by March 20 when the eurogroup next meets. Auditors have signalled they do not wish to be in Athens for more than a week. |
| But it is a tight deadline that many also recognise will be a tall order. Although both sides will be working on an initial agreement reached in Brussels last week, a great deal of bargaining over the type of counter measures Athens can expect to reduce the impact of further cuts is likely to dominate the days ahead. Lenders also want to liberalise the energy and labour markets – reforms that are highly controversial for leftists in the governing Syriza party. “Our hope is that we can deal with collective bargaining and other sensitive issues after we have made enough technical progress to complete the review,” said one Syriza insider. “There is a feeling that we are being pushed a great deal but the alternative [euro exit] would be worse.” | But it is a tight deadline that many also recognise will be a tall order. Although both sides will be working on an initial agreement reached in Brussels last week, a great deal of bargaining over the type of counter measures Athens can expect to reduce the impact of further cuts is likely to dominate the days ahead. Lenders also want to liberalise the energy and labour markets – reforms that are highly controversial for leftists in the governing Syriza party. “Our hope is that we can deal with collective bargaining and other sensitive issues after we have made enough technical progress to complete the review,” said one Syriza insider. “There is a feeling that we are being pushed a great deal but the alternative [euro exit] would be worse.” |
| 10.39am GMT | 10.39am GMT |
| 10:39 | 10:39 |
| In South Korea, more problems for Samsung. Justin McCurry reports: | In South Korea, more problems for Samsung. Justin McCurry reports: |
| The acting head of Samsung is to be indicted on bribery and embezzlement charges connected to a corruption and cronyism scandal centring on South Korea’s impeached president, Park Geun-hye. | The acting head of Samsung is to be indicted on bribery and embezzlement charges connected to a corruption and cronyism scandal centring on South Korea’s impeached president, Park Geun-hye. |
| Lee Jae-yong and four other Samsung executives will almost certainly face trial over accusations that South Korea’s biggest conglomerate donated millions of dollars to foundations run by a close friend of Park’s in exchange for government favours. | Lee Jae-yong and four other Samsung executives will almost certainly face trial over accusations that South Korea’s biggest conglomerate donated millions of dollars to foundations run by a close friend of Park’s in exchange for government favours. |
| Later on Tuesday, Lee, who is officially Samsung’s vice-president but has in effect run the company since his father suffered a heart attack in 2014, will be charged with bribery, embezzlement, hiding assets overseas and committing perjury before parliament, prosecutors said on the final day of their investigation into a scandal that has rocked the country’s political and business worlds. | Later on Tuesday, Lee, who is officially Samsung’s vice-president but has in effect run the company since his father suffered a heart attack in 2014, will be charged with bribery, embezzlement, hiding assets overseas and committing perjury before parliament, prosecutors said on the final day of their investigation into a scandal that has rocked the country’s political and business worlds. |
| The four executives, who all face the same charges as Lee except perjury, are the Samsung group’s vice-chairman, Choi Gee-sung, and president, Chang Choong-ki, as well as Samsung Electronics’ president, Park Sang-jin, and executive vice-president, Hwang Sung-soo. | The four executives, who all face the same charges as Lee except perjury, are the Samsung group’s vice-chairman, Choi Gee-sung, and president, Chang Choong-ki, as well as Samsung Electronics’ president, Park Sang-jin, and executive vice-president, Hwang Sung-soo. |
| Some of the executives will resign and leave Samsung, but Lee is expected to stay on as de facto head of the company if there is a trial. | Some of the executives will resign and leave Samsung, but Lee is expected to stay on as de facto head of the company if there is a trial. |
| The full story is here: | The full story is here: |
| 10.18am GMT | 10.18am GMT |
| 10:18 | 10:18 |
| Over in Europe and there has been a strong rise in Italian inflation, which is likely to boost the overall eurozone figure: | Over in Europe and there has been a strong rise in Italian inflation, which is likely to boost the overall eurozone figure: |
| Likelihood of #Eurozone #consumer #price #inflation rising in Feb (1.8% in Jan) lifted by #Italian HICP inflation jumping to 1.6% from 1.0% | Likelihood of #Eurozone #consumer #price #inflation rising in Feb (1.8% in Jan) lifted by #Italian HICP inflation jumping to 1.6% from 1.0% |
| 10.10am GMT | 10.10am GMT |
| 10:10 | 10:10 |
| Here’s Reuters’ first take on Charlotte Hogg’s appearance at the Treasury Committee: | Here’s Reuters’ first take on Charlotte Hogg’s appearance at the Treasury Committee: |
| Bank of England Deputy Governor Charlotte Hogg, who will join the central bank’s top policy committees next month, said on Tuesday she would be able to stand up to BoE Governor Mark Carney if required. | Bank of England Deputy Governor Charlotte Hogg, who will join the central bank’s top policy committees next month, said on Tuesday she would be able to stand up to BoE Governor Mark Carney if required. |
| Hogg, who is currently the Bank’s chief operating officer, also said she did not think there was a culture of group-think at the Bank. | Hogg, who is currently the Bank’s chief operating officer, also said she did not think there was a culture of group-think at the Bank. |
| Asked by a committee of lawmakers if she thought she would be able to stand up publicly to Carney, Hogg said: “I do.” | Asked by a committee of lawmakers if she thought she would be able to stand up publicly to Carney, Hogg said: “I do.” |
| She said she had already had disagreements with Carney in her current role over staffing and organisational issues. | She said she had already had disagreements with Carney in her current role over staffing and organisational issues. |
| Hogg replaces Minouche Shafik as deputy governor for markets and banking. She will serve on the Bank’s monetary, financial and prudential regulation policy committees. | Hogg replaces Minouche Shafik as deputy governor for markets and banking. She will serve on the Bank’s monetary, financial and prudential regulation policy committees. |
| 9.47am GMT | 9.47am GMT |
| 09:47 | 09:47 |
| BoE's Hogg: When Unwinding QE, BoE Will Do So In A Way That Is Mindful Of The Need To Maintain Orderly Markets | BoE's Hogg: When Unwinding QE, BoE Will Do So In A Way That Is Mindful Of The Need To Maintain Orderly Markets |
| BoE's Hogg: MPC Must Be Clear About Its Intentions When Unwinding QE In Order To Avoid An ‘Unintended Move’ In Gilt Yields | BoE's Hogg: MPC Must Be Clear About Its Intentions When Unwinding QE In Order To Avoid An ‘Unintended Move’ In Gilt Yields |