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| UK manufacturing growth slows, but markets calmed by US presidential address - business live | UK manufacturing growth slows, but markets calmed by US presidential address - business live |
| (about 1 hour later) | |
| 11.51am GMT | |
| 11:51 | |
| With François Fillon, the conservative French presidential candidate, saying he will stay in the race despite now facing embezzlement charges (he denies all allegations), there has been some reaction: | |
| #France risk spread over #Germany rises as Francois Fillon stays in French presidential election race. pic.twitter.com/Iif1nGoflJ | |
| 11.34am GMT | |
| 11:34 | |
| On the rising markets and falling pound, Connor Campbell, financial analyst at Spreadex, said: | |
| A resurgent Trump rally gathered pace as Wednesday progressed, the European indices ignoring a mixed bag of manufacturing data. | |
| The FTSE barrelled towards a fresh all-time high this morning, rising more than 50 points to lurk just below 7350. It’s its best price in a month and a half, and one that paid no attention to the fact that the UK’s manufacturing PMI unexpectedly fell from 55.7 in January to 54.6 in February. That fact didn’t slip past the pound, however. Sterling has spent the last few session suffering in comparison to the Trump-swelled, rate hike-eyeing dollar, and today was no different, the currency shedding another 0.3% against the greenback to leave it firmly under $1.24 (something that no doubt helped out the FTSE). | |
| Like their UK counterpart, the DAX and CAC also benefited from a weakened currency this Wednesday. With the euro down half a percent against the dollar, the German and French indices were given the green light to go big, both surging 1.3% as the day went on even despite a slight downward revision to the month’s region-wide manufacturing reading. | |
| This optimism should continue into the afternoon, with the Dow Jones set to open just above 20900 for the first time in its history. The US index actually has a fair amount of data to deal with this Wednesday, including the Fed-favourite core PCE price index and the Markit and ISM manufacturing PIMs. This leaves the Dow in an interesting position – while Trump is currently the main driving force behind the market’s movements, as the month goes the potential Fed rate-hike in March is only going to gain more prominence, something that could put pressure on the index’s current highs. | |
| 11.29am GMT | |
| 11:29 | |
| Pound near six week low against the dollar | |
| Meanwhile sterling has fallen to a near-six week low against the dollar, falling as low as $1.2323. | |
| The currency has been reacting to the weaker than expected UK manufacturing figures - pushing the chances of a rate rise even further into the distance - as well as the strength of the dollar as the Fed does look likely to increase borrowing costs, perhaps as soon as this month. | |
| There are also the concerns about the prospect of a Scottish referendum and the continuing uncertainty over Brexit. | |
| After an early rise against the euro, sterling is flat against the single currency at €1.1701. | |
| 11.19am GMT | |
| 11:19 | |
| Trump address continues to lift markets, with FTSE heading towards new peak | |
| Markets continue to be boosted by the calmer tone of Donald Trump’s address to Congress, along with a - generally - positive picture of the manufacturing sector in February. | |
| The FTSE 100 is up 1% at 7336, heading close towards its intra-day high of 7354 achieved on 16 January. | |
| Germany’s Dax is up 1.42% and France’s Cac 1.45%, despite the continuing concerns over the French presidential election. | |
| Meanwhile US futures are suggesting an 88 point opening for the Dow Jones Industrial Average, which dipped at the close on Tuesday after 12 days of rises. | |
| Commodity shares were lifted by Trump’s repeating his plans for $1bn of infrastructure spending, with the Stoxx 600 basic resources index up 1.9%. | |
| Building materials group CRH is the biggest riser in the FTSE 100 after a 10% rise in earnings. As the largest building materials business in North America, it is well placed to benefit from Trump’s spending proposals, although it said this was more likely to have an impact in the medium rather than short term. | |
| Updated | |
| at 11.23am GMT | |
| 10.38am GMT | 10.38am GMT |
| 10:38 | 10:38 |
| UK mortgage approvals rise in January | UK mortgage approvals rise in January |
| Phillip Inman | Phillip Inman |
| More on the UK housing market following the earlier Nationwide survey. | More on the UK housing market following the earlier Nationwide survey. |
| Bank of England mortgage approval figures show the upward trend since the Brexit vote last summer continued in January. | Bank of England mortgage approval figures show the upward trend since the Brexit vote last summer continued in January. |
| The number of mortgages approved for new house purchase jumped from 67,898 in December to 69,928, higher than the consensus among City economist for a gentler rise to 68,650. | The number of mortgages approved for new house purchase jumped from 67,898 in December to 69,928, higher than the consensus among City economist for a gentler rise to 68,650. |
| This was the fifth monthly rise in a row and the highest since last March. | This was the fifth monthly rise in a row and the highest since last March. |
| Scott Bowman, UK economist at Capital Economics, said the bounce in mortgage lending would have strengthened the argument for rate rises later in the year if it were not for a fall in annual growth in lending to corporates from 3.2% in December to 2.7% in January. | Scott Bowman, UK economist at Capital Economics, said the bounce in mortgage lending would have strengthened the argument for rate rises later in the year if it were not for a fall in annual growth in lending to corporates from 3.2% in December to 2.7% in January. |
| “This contributed to a drop in annual growth in the monetary policy committee’s preferred measure of bank lending - M4 lending excluding intermediate OFCs - from 6.2% to 5.3%. Nonetheless, we think that supportive monetary policy will ensure that the slowdown in bank lending this year isn’t too sharp.” | “This contributed to a drop in annual growth in the monetary policy committee’s preferred measure of bank lending - M4 lending excluding intermediate OFCs - from 6.2% to 5.3%. Nonetheless, we think that supportive monetary policy will ensure that the slowdown in bank lending this year isn’t too sharp.” |
| Jeremy Duncombe, director at Legal & General Mortgage Club, said the mortgage aprovals figures highlighted the resilience of the UK housing market. | Jeremy Duncombe, director at Legal & General Mortgage Club, said the mortgage aprovals figures highlighted the resilience of the UK housing market. |
| “Despite an uncertain political outlook, it is great to see the industry adopting a ‘keep calm and carry on’ approach as the mortgage industry continues to serve the needs of remortgagers and buyers alike,” he said. | “Despite an uncertain political outlook, it is great to see the industry adopting a ‘keep calm and carry on’ approach as the mortgage industry continues to serve the needs of remortgagers and buyers alike,” he said. |
| But Dennis de Jong, managing director at UFX.com warned that the strength was dependent on Bank of England support following the cut in interest rates last August. | But Dennis de Jong, managing director at UFX.com warned that the strength was dependent on Bank of England support following the cut in interest rates last August. |
| “Mark Carney and his Bank of England colleagues helped to breathe some life into it by cutting interest rates further and mortgage approvals have stood up very well in January. | “Mark Carney and his Bank of England colleagues helped to breathe some life into it by cutting interest rates further and mortgage approvals have stood up very well in January. |
| “However, this may not continue for long with high levels of uncertainty around Britain’s exit from the EU far from the best breeding ground for house buying. There has been some slightly conflicting data in the past fortnight regarding the strength of UK housing, but the general consensus is that things are likely to worsen throughout the year,” he said. | “However, this may not continue for long with high levels of uncertainty around Britain’s exit from the EU far from the best breeding ground for house buying. There has been some slightly conflicting data in the past fortnight regarding the strength of UK housing, but the general consensus is that things are likely to worsen throughout the year,” he said. |
| 10.18am GMT | 10.18am GMT |
| 10:18 | 10:18 |
| Here’s more reaction to the UK manufacturing PMI figures: | Here’s more reaction to the UK manufacturing PMI figures: |
| Lee Hopley, chief economist at EEF, the manufacturers’ organisation: | Lee Hopley, chief economist at EEF, the manufacturers’ organisation: |
| The slight slowing in the pace of expansion in UK manufacturing signalled by today’s PMI conceals some still positive trends across the industry. Export demand gained further ground in February, offsetting a bit of a slowdown in the rate of growth in the domestic market. This is likely to be a sign of things to come as consumer facing sectors are more challenged than other manufacturing sectors as rising inflation eats into household incomes. | The slight slowing in the pace of expansion in UK manufacturing signalled by today’s PMI conceals some still positive trends across the industry. Export demand gained further ground in February, offsetting a bit of a slowdown in the rate of growth in the domestic market. This is likely to be a sign of things to come as consumer facing sectors are more challenged than other manufacturing sectors as rising inflation eats into household incomes. |
| However, it seems that investment goods will pick up the baton – more confident and busier firms, brighter global prospects and rising commodity prices should create the right conditions for growth in this industry segment. With recent official statistics confirming that manufacturing contributed positively to the UK economic performance in 2016, what we’ve seen so far suggests we should be in for more of the same in 2017. | However, it seems that investment goods will pick up the baton – more confident and busier firms, brighter global prospects and rising commodity prices should create the right conditions for growth in this industry segment. With recent official statistics confirming that manufacturing contributed positively to the UK economic performance in 2016, what we’ve seen so far suggests we should be in for more of the same in 2017. |
| Mike Rigby, Head of Manufacturing at Barclays: | Mike Rigby, Head of Manufacturing at Barclays: |
| Two months into 2017 and despite a slowing in the rate of growth in February, manufacturers continue to register strong levels of output, healthy order books and growing trade courtesy of a weak sterling. However, despite the recent surge in exports, the sector continues to rely mostly on domestic demand and with price rises feeding through on the back of growing input costs, even with their recent easing, inflationary pressure continues to hover with intent. It’s how manufacturers now respond, particularly in their investment intentions, that will help determine how long the raised level of optimism in the sector continues. | Two months into 2017 and despite a slowing in the rate of growth in February, manufacturers continue to register strong levels of output, healthy order books and growing trade courtesy of a weak sterling. However, despite the recent surge in exports, the sector continues to rely mostly on domestic demand and with price rises feeding through on the back of growing input costs, even with their recent easing, inflationary pressure continues to hover with intent. It’s how manufacturers now respond, particularly in their investment intentions, that will help determine how long the raised level of optimism in the sector continues. |
| Dave Atkinson, UK head of manufacturing at Lloyds Bank Commercial Banking, said: | Dave Atkinson, UK head of manufacturing at Lloyds Bank Commercial Banking, said: |
| There will be fears that the latest PMI data suggests the manufacturing sector is showing the first signs of slowdown since last summer as the UK prepares to begin in earnest the process of leaving the European Union. | There will be fears that the latest PMI data suggests the manufacturing sector is showing the first signs of slowdown since last summer as the UK prepares to begin in earnest the process of leaving the European Union. |
| Yet despite persistent headwinds, principally the uncertainty around future trade terms and pricier imports as a result of the weaker pound, some exporting manufacturers are taking the opportunity to review their international trade strategies and look beyond the EU, especially taking advantage in the short term of the devaluation of sterling making our exports more competitive. | Yet despite persistent headwinds, principally the uncertainty around future trade terms and pricier imports as a result of the weaker pound, some exporting manufacturers are taking the opportunity to review their international trade strategies and look beyond the EU, especially taking advantage in the short term of the devaluation of sterling making our exports more competitive. |
| Firms are also becoming more skilled at dealing with unexpected geopolitical events. Businesses in the car manufacturing supply chain are waiting to see how the PSA-Opel deal will pan out with elections in several major European countries this year. | Firms are also becoming more skilled at dealing with unexpected geopolitical events. Businesses in the car manufacturing supply chain are waiting to see how the PSA-Opel deal will pan out with elections in several major European countries this year. |
| Howard Archer, chief UK and European economist at IHS Markit: | Howard Archer, chief UK and European economist at IHS Markit: |
| While weaker than January and December, this is still a decent survey that points to decent manufacturing expansion in the first quarter. This would follow manufacturing output rebounding a pleasing 1.2% quarter-on-quarter in the fourth quarter of 2016 after declining 0.8% quarter-on-quarter in the third quarter. | While weaker than January and December, this is still a decent survey that points to decent manufacturing expansion in the first quarter. This would follow manufacturing output rebounding a pleasing 1.2% quarter-on-quarter in the fourth quarter of 2016 after declining 0.8% quarter-on-quarter in the third quarter. |
| However, the PMI does point to a slowdown in domestic demand in February. This was partly offset by a welcome pick-up in export orders after a lacklustre January performance. | However, the PMI does point to a slowdown in domestic demand in February. This was partly offset by a welcome pick-up in export orders after a lacklustre January performance. |
| Ongoing very high manufacturers’ pricing balances remains a serious black mark in the survey that fuels belief UK consumer price inflation is headed markedly higher over the coming months and will likely reach 3% later in the year. | Ongoing very high manufacturers’ pricing balances remains a serious black mark in the survey that fuels belief UK consumer price inflation is headed markedly higher over the coming months and will likely reach 3% later in the year. |
| The slowdown in growth in domestic orders in February fuels belief that there are mounting challenges for the manufacturing sector. | The slowdown in growth in domestic orders in February fuels belief that there are mounting challenges for the manufacturing sector. |
| 9.56am GMT | 9.56am GMT |
| 09:56 | 09:56 |
| ITV suffers fall in advertising after Brexit vote | ITV suffers fall in advertising after Brexit vote |
| Mark Sweney | Mark Sweney |
| Meanwhile, ITV has reported its worst year for TV advertising since the 2009 recession as Brexit fears caused jittery companies to pull budgets last year. | Meanwhile, ITV has reported its worst year for TV advertising since the 2009 recession as Brexit fears caused jittery companies to pull budgets last year. |
| ITV said that TV ad revenues fell 3% last year to £1.67bn and would fall 6% in the first four months this year as retailers and food companies focus on price cuts over ad spend to win over consumers. | ITV said that TV ad revenues fell 3% last year to £1.67bn and would fall 6% in the first four months this year as retailers and food companies focus on price cuts over ad spend to win over consumers. |
| However, the UK’s biggest free-to-air broadcaster was able to pay out a special dividend to shareholders of more than £200m thanks to the performance of ITV Studios. | However, the UK’s biggest free-to-air broadcaster was able to pay out a special dividend to shareholders of more than £200m thanks to the performance of ITV Studios. |
| The TV production business - which makes and sells shows including Victoria, Mr Selfridge, Come Dine with Me and Coronation Street - helped ITV more than offset the ad decline with double-digit growth in revenues and profits last year. | The TV production business - which makes and sells shows including Victoria, Mr Selfridge, Come Dine with Me and Coronation Street - helped ITV more than offset the ad decline with double-digit growth in revenues and profits last year. |
| ITV saw pre-tax profits fall 14% to £553m, due to £164m in mostly non-cash charges, while total revenues grew 4% to £3.5bn. ITV, which had warned analysts of the Brexit-related TV ad decline, beat city consensus figures by 3%. | ITV saw pre-tax profits fall 14% to £553m, due to £164m in mostly non-cash charges, while total revenues grew 4% to £3.5bn. ITV, which had warned analysts of the Brexit-related TV ad decline, beat city consensus figures by 3%. |
| Updated | Updated |
| at 9.57am GMT | at 9.57am GMT |
| 9.54am GMT | 9.54am GMT |
| 09:54 | 09:54 |
| Despite the weaker than expected UK factory growth, Rob Dobson at survey compiler IHS Markit said UK manufacturing output could grow by as much ast 1.5% in the first quarter: | Despite the weaker than expected UK factory growth, Rob Dobson at survey compiler IHS Markit said UK manufacturing output could grow by as much ast 1.5% in the first quarter: |
| The big question is whether robust growth can be sustained or whether it will continue to wane in the coming months. The slowdown in new order growth and a drop in backlogs of work suggest output growth may slow further. However, elevated business optimism, continued job creation, a recovery in export orders and rising levels of purchasing all suggest that any easing will be only mild. Indeed, almost 50% of companies expect production to be higher in one year’s time. | The big question is whether robust growth can be sustained or whether it will continue to wane in the coming months. The slowdown in new order growth and a drop in backlogs of work suggest output growth may slow further. However, elevated business optimism, continued job creation, a recovery in export orders and rising levels of purchasing all suggest that any easing will be only mild. Indeed, almost 50% of companies expect production to be higher in one year’s time. |
| Chris Williamson, chief business economist at IHS Markit, said the figures suggested the UK economy should grow by 0.5% in the first quarter. | Chris Williamson, chief business economist at IHS Markit, said the figures suggested the UK economy should grow by 0.5% in the first quarter. |
| Updated | Updated |
| at 10.10am GMT | at 10.10am GMT |
| 9.33am GMT | 9.33am GMT |
| 09:33 | 09:33 |
| UK factory growth slows | UK factory growth slows |
| Britain’s factory activity grew more slowly than expected in February, but is still continuing to show the strong momentum seen since the Brexit vote. | Britain’s factory activity grew more slowly than expected in February, but is still continuing to show the strong momentum seen since the Brexit vote. |
| The Markit/CIPS manufacturing purchasing managers index slipped from 55.7 in January to 54.6, below the expected figure of 55.6. But it remains close to a two and a half year high. There was a slight easing in inflationary pressures which had been rising in the wake of sterling’s slump following the referendum outcome last June. | The Markit/CIPS manufacturing purchasing managers index slipped from 55.7 in January to 54.6, below the expected figure of 55.6. But it remains close to a two and a half year high. There was a slight easing in inflationary pressures which had been rising in the wake of sterling’s slump following the referendum outcome last June. |
| 9.26am GMT | 9.26am GMT |
| 09:26 | 09:26 |
| And here is Markit’s PMI rankings: | And here is Markit’s PMI rankings: |
| 9.24am GMT | 9.24am GMT |
| 09:24 | 09:24 |
| Eurozone manufacturing boosted by weak euro | Eurozone manufacturing boosted by weak euro |
| Eurozone factories grew at their fastest rate for 70 months in February, as the weak euro helped boost demand for exports. | Eurozone factories grew at their fastest rate for 70 months in February, as the weak euro helped boost demand for exports. |
| The IHS Markit purchasing managers index rose from 55.2 in January to 55.4, the highest level since April 2011. It was revised down slightly from an initial estimate of 55.5. Markit said: | The IHS Markit purchasing managers index rose from 55.2 in January to 55.4, the highest level since April 2011. It was revised down slightly from an initial estimate of 55.5. Markit said: |
| Companies indicated that domestic demand remained solid in a number of markets, while the weak euro contributed to the fastest growth of new export business for almost six years. | Companies indicated that domestic demand remained solid in a number of markets, while the weak euro contributed to the fastest growth of new export business for almost six years. |
| Chris Williamson, chief business economist at IHS Markit said: | Chris Williamson, chief business economist at IHS Markit said: |
| Euro area manufacturers are reporting the strongest production and order book growth for almost six years, in what’s looking like an increasingly robust upturn. | Euro area manufacturers are reporting the strongest production and order book growth for almost six years, in what’s looking like an increasingly robust upturn. |
| Companies clearly expect the good times to persist. This year has seen firms more optimistic about the future than at any time since the region’s debt crisis. Companies are reporting stronger demand in both home and export markets, with the weakened euro providing an accompanying tailwind to help drive sales. | Companies clearly expect the good times to persist. This year has seen firms more optimistic about the future than at any time since the region’s debt crisis. Companies are reporting stronger demand in both home and export markets, with the weakened euro providing an accompanying tailwind to help drive sales. |
| Given the current buoyant demand environment, manufacturers are eschewing political uncertainty and quietly getting on with growing their businesses. The rate of job creation seen so far this year in the manufacturing sector has consequently been among the best seen in the history of the euro. | Given the current buoyant demand environment, manufacturers are eschewing political uncertainty and quietly getting on with growing their businesses. The rate of job creation seen so far this year in the manufacturing sector has consequently been among the best seen in the history of the euro. |
| Greece remains the outlier, stuck firmly in contraction territory while all other countries are expanding with the Netherlands, Austria and Germany enjoying the strongest growth. | Greece remains the outlier, stuck firmly in contraction territory while all other countries are expanding with the Netherlands, Austria and Germany enjoying the strongest growth. |
| On the price front, not only are higher commodity prices and the weak euro pushing up firms’ costs, but there’s also growing evidence of a sellers’ market developing for many goods as demand exceeds supply, which suggests core inflationary pressures may be starting to rise. | On the price front, not only are higher commodity prices and the weak euro pushing up firms’ costs, but there’s also growing evidence of a sellers’ market developing for many goods as demand exceeds supply, which suggests core inflationary pressures may be starting to rise. |
| 9.16am GMT | 9.16am GMT |
| 09:16 | 09:16 |
| And over in China: | And over in China: |
| #China PMI points to robust Q1 - but weaker investment growth likely to weigh on the Chinese cycle soon https://t.co/1cixmwZh00 pic.twitter.com/9jemDlhPtX | #China PMI points to robust Q1 - but weaker investment growth likely to weigh on the Chinese cycle soon https://t.co/1cixmwZh00 pic.twitter.com/9jemDlhPtX |
| 9.07am GMT | 9.07am GMT |
| 09:07 | 09:07 |
| There was also an improvement in Greek manufacturing last month, although it still contracted for the sixth month in a row. | There was also an improvement in Greek manufacturing last month, although it still contracted for the sixth month in a row. |
| #Greece Feb Manufacturing PMI +1.1 points to 47.7 from 46.6 in Jan (Markit). #economy | #Greece Feb Manufacturing PMI +1.1 points to 47.7 from 46.6 in Jan (Markit). #economy |
| #Greece Markit Manufacturing PMI at 47.7 https://t.co/lhuFNx5fK1 pic.twitter.com/wGr4mQpH8c | #Greece Markit Manufacturing PMI at 47.7 https://t.co/lhuFNx5fK1 pic.twitter.com/wGr4mQpH8c |
| 9.06am GMT | 9.06am GMT |
| 09:06 | 09:06 |
| Still with Germany, and seasonally adjusted unemployment fell by 14,000 in February to 2.592m. | Still with Germany, and seasonally adjusted unemployment fell by 14,000 in February to 2.592m. |
| This is a bigger fall than the expected 10,000 decline but less than the 26,000 drop seen the previous month. | This is a bigger fall than the expected 10,000 decline but less than the 26,000 drop seen the previous month. |
| The jobless rate was unchanged at 5.9% | The jobless rate was unchanged at 5.9% |