This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/live/2017/may/26/pound-falls-election-poll-us-growth-opec-oil-business-live

The article has changed 18 times. There is an RSS feed of changes available.

Version 11 Version 12
Pound hit by election jitters as US growth figures boost dollar – business live Pound hit by election jitters as US growth figures boost dollar – business live
(35 minutes later)
3.13pm BST
15:13
Newsflash: American consumer confidence was a little weaker than expected this month, but still pretty high.
The University of Michigan’s monthly healthcheck of consumer morale has come in at 97.1 for May, down from the preliminary reading of 97.7.
That up on April’s 97.0, and close to its highest levels since the US election last November.
The survey’s chief economist, Richard Curtin, says:
“Consumer sentiment has continued to move along the high plateau established following Trump’s election.”
U.S. consumer sentiment holds near post-election highs, spending is poised to rebound https://t.co/HcKWDr1rtb pic.twitter.com/HAvAYetaF3
2.52pm BST
14:52
As the pound drops further, the FTSE 100 hits fresh record highs.
The blue-chip index is now up 30 points at 7552, a gain of 0.4%.
2.38pm BST2.38pm BST
14:3814:38
The final trading day of the week is underway in New York.The final trading day of the week is underway in New York.
Shares have dipped a little, as investors get ready for the long weekend (markets will be closed on Monday for Memorial Day).Shares have dipped a little, as investors get ready for the long weekend (markets will be closed on Monday for Memorial Day).
The Dow Jones industrial average has dropped by 23 points, or 0.1%, to 21,060.The Dow Jones industrial average has dropped by 23 points, or 0.1%, to 21,060.
US stocks open slightly lower as Wall Street gears up for Memorial Day weekend https://t.co/kGEfMWBxJv pic.twitter.com/UJUmtyLTvIUS stocks open slightly lower as Wall Street gears up for Memorial Day weekend https://t.co/kGEfMWBxJv pic.twitter.com/UJUmtyLTvI
UpdatedUpdated
at 2.40pm BSTat 2.40pm BST
2.23pm BST2.23pm BST
14:2314:23
Richard de Meo, managing director of Foenix Partners, reckons the Federal Reserve is now very likely to raise American interest rates next month:Richard de Meo, managing director of Foenix Partners, reckons the Federal Reserve is now very likely to raise American interest rates next month:
Upward revisions to 1.2% for first quarter growth have confirmed the world’s largest economy to be in rude health, strengthening the case for a Fed rate hike on June 14th.Upward revisions to 1.2% for first quarter growth have confirmed the world’s largest economy to be in rude health, strengthening the case for a Fed rate hike on June 14th.
[Fed chair Janet] Yellen will find the 0.60% quarterly uptick in consumer spending to be particularly pleasing ahead of what is being enthusiastically priced in by fixed income markets – the implied probability of policy action was above 80% at the last count.[Fed chair Janet] Yellen will find the 0.60% quarterly uptick in consumer spending to be particularly pleasing ahead of what is being enthusiastically priced in by fixed income markets – the implied probability of policy action was above 80% at the last count.
Unless Donald Trump repeats his NATO tactics and shoulders his way into the headlines and barring any shock disappointments in the data calendar, no market event appears capable of preventing a mid-June US interest rate hike.Unless Donald Trump repeats his NATO tactics and shoulders his way into the headlines and barring any shock disappointments in the data calendar, no market event appears capable of preventing a mid-June US interest rate hike.
2.22pm BST2.22pm BST
14:2214:22
James Knightley of iNG isn’t too impressed with America’s growth in the first quarter of the year, even though it’s been revised up to 1.2% (annualised)James Knightley of iNG isn’t too impressed with America’s growth in the first quarter of the year, even though it’s been revised up to 1.2% (annualised)
He points out that it still lags behind other developed countries (not Britain, alas):He points out that it still lags behind other developed countries (not Britain, alas):
US 1Q 2017 GDP growth has been revised up to 1.2% annualised from the 0.7% figure initially reported. There were slight improvements in all of the key components, but it is still a very disappointing outcome, mainly caused by a clear slowdown in consumer spending and a run down in inventories.US 1Q 2017 GDP growth has been revised up to 1.2% annualised from the 0.7% figure initially reported. There were slight improvements in all of the key components, but it is still a very disappointing outcome, mainly caused by a clear slowdown in consumer spending and a run down in inventories.
1.57pm BST1.57pm BST
13:5713:57
Pound hits one-month lowPound hits one-month low
The US dollar has rallied after America’s first-quarter growth was revised up.The US dollar has rallied after America’s first-quarter growth was revised up.
And that’s bad news for the pound, which has now spiralled to a one-month low of $1.2811, down more than a cent today.And that’s bad news for the pound, which has now spiralled to a one-month low of $1.2811, down more than a cent today.
1.36pm BST1.36pm BST
13:3613:36
US growth revised up, beating BritainUS growth revised up, beating Britain
Breaking! America’s growth rate in the first three months of this year has been revised up.Breaking! America’s growth rate in the first three months of this year has been revised up.
US GDP increased at an ‘annualised rate’ of 1.2% in January-March, the Commerce Department says, up from an initial estimate of 0.7%.US GDP increased at an ‘annualised rate’ of 1.2% in January-March, the Commerce Department says, up from an initial estimate of 0.7%.
That’s equivalent to a quarterly growth rate of 0.3%, the same as France, and faster than Britain after yesterday’s downgrade to 0.2%.That’s equivalent to a quarterly growth rate of 0.3%, the same as France, and faster than Britain after yesterday’s downgrade to 0.2%.
It’s still the weakest expansion since the first three months of 2016. Economists, though, think growth is probably rebounding quite sharply in the current quarter.It’s still the weakest expansion since the first three months of 2016. Economists, though, think growth is probably rebounding quite sharply in the current quarter.
The Commerce Department has revised up its estimate for consumer spending, from +0.3% to +0.6%.The Commerce Department has revised up its estimate for consumer spending, from +0.3% to +0.6%.
Business investment was also strong, rising by 11.4%.Business investment was also strong, rising by 11.4%.
US GDP grew 1.2% ann in Q1 2017, revised up from 0.7% and also way faster than expected 0.9%. Euro dropped <$1.12. pic.twitter.com/QRFhqdyF4lUS GDP grew 1.2% ann in Q1 2017, revised up from 0.7% and also way faster than expected 0.9%. Euro dropped <$1.12. pic.twitter.com/QRFhqdyF4l
Interesting to note that US Q1 GDP revision back to what was expected prior to the first print. 1.2%Interesting to note that US Q1 GDP revision back to what was expected prior to the first print. 1.2%
1.27pm BST1.27pm BST
13:2713:27
Insurance group Legal & General has given Ireland a boost in its bid to attract City jobs after Brexit.Insurance group Legal & General has given Ireland a boost in its bid to attract City jobs after Brexit.
L&G has picked Dublin as the new European hub for its investment management arm.L&G has picked Dublin as the new European hub for its investment management arm.
And while it may not create many new jobs, the Irish government will be cheered that its efforts to woo major financial firms is paying off. Earlier this month, JP Morgan bought an office block in Dublin, seemingly in preparation for Britain’s exit from the EU.And while it may not create many new jobs, the Irish government will be cheered that its efforts to woo major financial firms is paying off. Earlier this month, JP Morgan bought an office block in Dublin, seemingly in preparation for Britain’s exit from the EU.
The Irish Independent has more details:The Irish Independent has more details:
The move remains subject to regulatory approval, he said, stressing that the relocation would “have no foreseeable impact on operations and staff in other LGIM locations”.The move remains subject to regulatory approval, he said, stressing that the relocation would “have no foreseeable impact on operations and staff in other LGIM locations”.
The total number of new jobs may be fewer than 50, but the move represents a significant win for the Government given L&G’s status as a household name within the industry.The total number of new jobs may be fewer than 50, but the move represents a significant win for the Government given L&G’s status as a household name within the industry.
The investment manager is Europe’s largest with more than €1 trillion in assets. It is known to be seeking a full EU base for after Brexit.The investment manager is Europe’s largest with more than €1 trillion in assets. It is known to be seeking a full EU base for after Brexit.
Legal and General become latest British company to move some operations to Ireland in response to Brexit, Reuters reportingLegal and General become latest British company to move some operations to Ireland in response to Brexit, Reuters reporting
1.03pm BST1.03pm BST
13:0313:03
Ouch! The pound just hit a three-week low of $1.2843 against the US dollar, as election nerves intensify.Ouch! The pound just hit a three-week low of $1.2843 against the US dollar, as election nerves intensify.
Chris Saint, senior analyst at HL Currency Service, says the decline in the Conservative’s Party’s leader over Labour is causing “heavy losses”.Chris Saint, senior analyst at HL Currency Service, says the decline in the Conservative’s Party’s leader over Labour is causing “heavy losses”.
This adds an extra strand to political risks currently weighing on the pound, with markets previously taking it almost for granted that a larger parliamentary majority would hand Mrs May a stronger negotiating position in upcoming Brexit talks.This adds an extra strand to political risks currently weighing on the pound, with markets previously taking it almost for granted that a larger parliamentary majority would hand Mrs May a stronger negotiating position in upcoming Brexit talks.
12.29pm BST12.29pm BST
12:2912:29
Several of Britain’s largest banks are the worst-performing stocks on the FTSE 100 so far today.Several of Britain’s largest banks are the worst-performing stocks on the FTSE 100 so far today.
Royal Bank of Scotland has shed 2.5%, with Barclays and Lloyds close behind.Royal Bank of Scotland has shed 2.5%, with Barclays and Lloyds close behind.
It’s part of a wider selloff; bank shares across Europe have dropped, amid new worries about two Italian banks.It’s part of a wider selloff; bank shares across Europe have dropped, amid new worries about two Italian banks.
Reuters has the details:Reuters has the details:
Traders cited worries over the political situation in Italy and concerns surrounding ailing regional banks Popolare di Vicenza and Veneto Banca, even though the county’s economy minister sought to reassure investors on Thursday that they will not be hit in any rescue of the two banks.Traders cited worries over the political situation in Italy and concerns surrounding ailing regional banks Popolare di Vicenza and Veneto Banca, even though the county’s economy minister sought to reassure investors on Thursday that they will not be hit in any rescue of the two banks.
11.26am BST11.26am BST
11:2611:26
Pound pummelled: What the experts sayPound pummelled: What the experts say
Sterling is likely to remain volatile until the general election is concluded, suggests Paresh Davdraof of RationalFX.Sterling is likely to remain volatile until the general election is concluded, suggests Paresh Davdraof of RationalFX.
With the pound sliding below $1.29 against the dollar and at a two-month low against the euro, uncertainty over the outcome of the election is beginning to trouble the markets. In April when the election was called, a Conservative victory appeared all but secured, providing the government with a strong mandate to move forward with Brexit plans for negotiations, while also providing analysts more certainty as divorce proceedings with the EU got underway. Now, the very real possibility of a Labour victory with two weeks before polling day, however unlikely, raises the prospect of further disruption for analysts and a return to volatility in the pound as a new government determines the Brexit process.With the pound sliding below $1.29 against the dollar and at a two-month low against the euro, uncertainty over the outcome of the election is beginning to trouble the markets. In April when the election was called, a Conservative victory appeared all but secured, providing the government with a strong mandate to move forward with Brexit plans for negotiations, while also providing analysts more certainty as divorce proceedings with the EU got underway. Now, the very real possibility of a Labour victory with two weeks before polling day, however unlikely, raises the prospect of further disruption for analysts and a return to volatility in the pound as a new government determines the Brexit process.
Whilst the pound has been able to remain steady in face of the week’s tragic events and disappointing data, it is clear that the election is the most powerful driver behind the UK’s currency. The next two weeks could see more volatility for sterling as polling figures in the run up to the election become more frequent. Analysts will be looking for any definitive signs that the Conservatives can win the election before the pound can consistently return to the levels seen recently.”Whilst the pound has been able to remain steady in face of the week’s tragic events and disappointing data, it is clear that the election is the most powerful driver behind the UK’s currency. The next two weeks could see more volatility for sterling as polling figures in the run up to the election become more frequent. Analysts will be looking for any definitive signs that the Conservatives can win the election before the pound can consistently return to the levels seen recently.”
But, Chris Beauchamp of IG suspects that the pound might claw back some of today’s losses, once traders have digested the latest polling data.But, Chris Beauchamp of IG suspects that the pound might claw back some of today’s losses, once traders have digested the latest polling data.
Cable has spent the week trying vainly to break $1.30, but the most recent YouGov poll has empowered the bears.Cable has spent the week trying vainly to break $1.30, but the most recent YouGov poll has empowered the bears.
Such a polling bounce for Labour was also eminently predictable (a similar occurrence took place for the Conservatives in the 1997 election, and we know how that turned out), so we should see some cable buying as the session goes on.Such a polling bounce for Labour was also eminently predictable (a similar occurrence took place for the Conservatives in the 1997 election, and we know how that turned out), so we should see some cable buying as the session goes on.
[Explainer: ‘Cable’ is City slang for the pound-dollar exchange rate, dating back to the days when traders in London and New York used a cable on the Atlantic Sea bed to track it. Some bright sparks occasionally call it ‘Betty’ instead (rhyming slang from WW2 pin-up Betty Grable...)][Explainer: ‘Cable’ is City slang for the pound-dollar exchange rate, dating back to the days when traders in London and New York used a cable on the Atlantic Sea bed to track it. Some bright sparks occasionally call it ‘Betty’ instead (rhyming slang from WW2 pin-up Betty Grable...)]
10.48am BST10.48am BST
10:4810:48
The pound’s weakness is good news for European tourists planning a trip to this Sceptred Isle this summer.The pound’s weakness is good news for European tourists planning a trip to this Sceptred Isle this summer.
One euro now buys 87.1p on the foreign exchanges, up from just 83.1p in mid-April.One euro now buys 87.1p on the foreign exchanges, up from just 83.1p in mid-April.
#Euro jumps vs Pound to the highest since Mar on UK election jitters as Tory lead over Labour keeps shrinking. pic.twitter.com/56YIg46cBK#Euro jumps vs Pound to the highest since Mar on UK election jitters as Tory lead over Labour keeps shrinking. pic.twitter.com/56YIg46cBK
The other side of the coin is that Brits face paying more to holiday in Europe this summer.The other side of the coin is that Brits face paying more to holiday in Europe this summer.
10.36am BST10.36am BST
10:3610:36
Bloomberg have created a neat graphic, highlighting how the pound is sensitive to next month’s election victory.Bloomberg have created a neat graphic, highlighting how the pound is sensitive to next month’s election victory.
A big Conservative victory is likely to drive sterling up, but a narrow win (or even a hung parliament) would spark a selloff.A big Conservative victory is likely to drive sterling up, but a narrow win (or even a hung parliament) would spark a selloff.
So YouGov’s poll could potentially put sterling “in the trouble zone”, says Neil Jones, head of hedge-fund sales at Mizuho Bank.So YouGov’s poll could potentially put sterling “in the trouble zone”, says Neil Jones, head of hedge-fund sales at Mizuho Bank.
“Sterling correlates well with anything that shows a Tory majority and vice versa, so if you’ve got this situation where the majority closes right down, it may come to a critical level where it may not have a sufficient number of seats in the house. The market doesn’t like that.”“Sterling correlates well with anything that shows a Tory majority and vice versa, so if you’ve got this situation where the majority closes right down, it may come to a critical level where it may not have a sufficient number of seats in the house. The market doesn’t like that.”
More here.More here.
10.16am BST10.16am BST
10:1610:16
Michael Hewson of CMC Markets says there is “increased nervousness” in the City over the Brexit negotiations, which should begin shortly after the election.Michael Hewson of CMC Markets says there is “increased nervousness” in the City over the Brexit negotiations, which should begin shortly after the election.
None of the parties appears to have either a coherent plan for a post Brexit Britain, or any vision of a coherent leadership.None of the parties appears to have either a coherent plan for a post Brexit Britain, or any vision of a coherent leadership.
While mid-campaign polling wobbles are nothing new, take the rogue Scottish referendum poll in 2014, neither of the main parties appears to have manifestoes which appear to add up with the Institute of Fiscal Studies criticising both.While mid-campaign polling wobbles are nothing new, take the rogue Scottish referendum poll in 2014, neither of the main parties appears to have manifestoes which appear to add up with the Institute of Fiscal Studies criticising both.
9.53am BST9.53am BST
09:5309:53
FTSE 250 hits record high tooFTSE 250 hits record high too
We also have a fresh record high on the FTSE 250 index, which contains medium-sized UK-focused companies.We also have a fresh record high on the FTSE 250 index, which contains medium-sized UK-focused companies.
The FTSE 250 has romped over the 20,000 point mark for the first time ever this morning, extending its recent rally.The FTSE 250 has romped over the 20,000 point mark for the first time ever this morning, extending its recent rally.
Restaurant Group (owner of Frankie & Benny’s) has jumped 9% after reporting better sales figures than the City feared (like-for-like takings only fell by 1.8%)Restaurant Group (owner of Frankie & Benny’s) has jumped 9% after reporting better sales figures than the City feared (like-for-like takings only fell by 1.8%)
#FTSE250 a new record at 20,000 level#FTSE250 a new record at 20,000 level
9.41am BST9.41am BST
09:4109:41
The City fears a hung parliamentThe City fears a hung parliament
The Tory’s shrinking poll lead is raising concerns that no party might win an overall majority in June’s election, says Nomura strategist Jordan Rochester.The Tory’s shrinking poll lead is raising concerns that no party might win an overall majority in June’s election, says Nomura strategist Jordan Rochester.
Rochester explains:Rochester explains:
“Sterling is likely to continue to be under pressure now until the election is out of the way, if polling continues to indicate it’s a tighter race.”“Sterling is likely to continue to be under pressure now until the election is out of the way, if polling continues to indicate it’s a tighter race.”
“For the market the worst outcome is if we have further uncertainty with the chances of a hung parliament.”“For the market the worst outcome is if we have further uncertainty with the chances of a hung parliament.”
That uncertainty is keeping the pound pinned at a two-month low against the euro:That uncertainty is keeping the pound pinned at a two-month low against the euro: