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Markets at new record highs ahead of US Federal Reserve decision – business live Markets at new record highs ahead of US Federal Reserve decision – business live
(35 minutes later)
3.41pm BST
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Oil prices have been moving higher recently on hopes that Opec and its partners would extend their production cuts designed to deal with a global supply glut. Indeed, crude is on track for its biggest third quarter gain in 13 years.
However they have now come off their best levels after the US Energy Information Administration reported a bigger than expected rise in crude stocks last week.
EIA crude inventories up 4.591 million vs 3.493m expected (API reported 1.443m on Tuesday) - #Brent and #WTI off 20c ,minor response #oil
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#APPLE is down 2.2%, drags $DJ to flat line. No definite trigger, though new Watch seeing negative reviews (1) ^KO
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Markets continue to drift ahead of the Fed meeting. Connor Campbell, financial analyst at Spreadex, said:
Despite effectively not moving after the bell the Dow Jones still managed to flirt with a fresh all-time high – that’s just how consistent it has been in the last 3 weeks. Whether it can continue to build may be dependent on how the dollar reacts to September’s statement from the Federal Reserve – which in turn could come to depend on a) how cautious Yellen and co. are in regards to reducing the $4.5 billion balance sheet, and b) what kind of (December) rate hike signals are sent out.
For now, however, the greenback is sitting firmly on its hands. The dollar is down 0.3% against the pound, 0.1% against the yen and flat against the euro. Sterling is also up 0.2% against the euro, the currency receiving a bit of good news in the form of this morning’s surprisingly strong UK retail sales reading.
As for the European indices, sterling’s strength is once again weighing on the FTSE, which slipped 0.2% as the day went on having risen 0.3% during the morning. In the Eurozone there wasn’t a lot going on, with the CAC flat at 5225 and the DAX slipping below 12550 – if only just – following a 0.1% fall.
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US house sales fall in AugustUS house sales fall in August
More weak data from the US, with the effects of Hurricane Harvey starting to be felt.More weak data from the US, with the effects of Hurricane Harvey starting to be felt.
US existing home sales fell 1.7% to 5.35m units in August, down from 5.44m in July and the lowest level since this time last year, mainly due to a lack of supply.US existing home sales fell 1.7% to 5.35m units in August, down from 5.44m in July and the lowest level since this time last year, mainly due to a lack of supply.
The National Association of Realtors said Harvey, which hit Texas in the last week of August, had seen helped push sales in Houston down 25% year on year. Without that decline, existing home sales would have been unchanged in August.The National Association of Realtors said Harvey, which hit Texas in the last week of August, had seen helped push sales in Houston down 25% year on year. Without that decline, existing home sales would have been unchanged in August.
Lawrence Yun, NAR chief economist, said:Lawrence Yun, NAR chief economist, said:
Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales. What’s ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it’s putting on prices in several parts of the country. Sales have been unable to break out because there are simply not enough homes for sale.Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales. What’s ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it’s putting on prices in several parts of the country. Sales have been unable to break out because there are simply not enough homes for sale.
Some of the South region’s decline in closings can be attributed to the devastation Hurricane Harvey caused to the greater Houston area. Sales will be impacted the rest of the year in Houston, as well as in the most severely affected areas in Florida from Hurricane Irma. However, nearly all of the lost activity will likely show up in 2018.Some of the South region’s decline in closings can be attributed to the devastation Hurricane Harvey caused to the greater Houston area. Sales will be impacted the rest of the year in Houston, as well as in the most severely affected areas in Florida from Hurricane Irma. However, nearly all of the lost activity will likely show up in 2018.
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Some deal news from Japan. Reuters reports:Some deal news from Japan. Reuters reports:
Toshiba Corp has agreed to sell its prized semiconductor business to a group led by U.S. private equity firm Bain Capital, a key step in keeping the struggling Japanese conglomerate listed on the Tokyo exchange.Toshiba Corp has agreed to sell its prized semiconductor business to a group led by U.S. private equity firm Bain Capital, a key step in keeping the struggling Japanese conglomerate listed on the Tokyo exchange.
Toshiba said it had signed a contract for the deal worth about 2 trillion yen ($18 billion), the latest and perhaps final twist in a deal that only hours earlier had seen the company leading toward an agreement with its U.S. joint venture partner Western Digital Corp.Toshiba said it had signed a contract for the deal worth about 2 trillion yen ($18 billion), the latest and perhaps final twist in a deal that only hours earlier had seen the company leading toward an agreement with its U.S. joint venture partner Western Digital Corp.
The decision to sell the world’s No. 2 producer of NAND memory chips... was made at a board meeting earlier in the day.The decision to sell the world’s No. 2 producer of NAND memory chips... was made at a board meeting earlier in the day.
Toshiba said the agreement assumed the deal would weather legal challenges raised by Western Digital. A Western Digital spokeswoman said the company did not have an immediate comment.Toshiba said the agreement assumed the deal would weather legal challenges raised by Western Digital. A Western Digital spokeswoman said the company did not have an immediate comment.
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Wall Street opens flat ahead of Fed decisionWall Street opens flat ahead of Fed decision
US investors are in wait and see mode ahead of the Federal Reserve’s interest rate decision and the press conference from chair Janet Yellen. But markets still remain at record levels.US investors are in wait and see mode ahead of the Federal Reserve’s interest rate decision and the press conference from chair Janet Yellen. But markets still remain at record levels.
The Dow Jones Industrial Average and the S&P 500 both edged up 0.01% at the open, while the Nasdaq Composite slipped 0.04%.The Dow Jones Industrial Average and the S&P 500 both edged up 0.01% at the open, while the Nasdaq Composite slipped 0.04%.
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If the US Federal Reserve is more hawkish than expected on interest rates and its balance sheet plans, then the US dollar could move sharply higher after its recent weakness, reckons Fawad Razaqzada, market analyst at Forex.com:If the US Federal Reserve is more hawkish than expected on interest rates and its balance sheet plans, then the US dollar could move sharply higher after its recent weakness, reckons Fawad Razaqzada, market analyst at Forex.com:
In making their decisions, policymakers at the Fed are likely to take into account last month’s sharper-than-expected rise in CPI inflation, and weigh this against somewhat softer macro pointers elsewhere in the economy. But with employment remaining healthy and inflation being so close to its target, the Fed may get the market ready for another rate rise in December and also provide a plan for balance sheet normalisation. In other words, the Fed may be more hawkish than dovish at this meeting.In making their decisions, policymakers at the Fed are likely to take into account last month’s sharper-than-expected rise in CPI inflation, and weigh this against somewhat softer macro pointers elsewhere in the economy. But with employment remaining healthy and inflation being so close to its target, the Fed may get the market ready for another rate rise in December and also provide a plan for balance sheet normalisation. In other words, the Fed may be more hawkish than dovish at this meeting.
If so, we would expect the dollar to rip, especially against currencies where the central bank is still very dovish – for example, the Japanese yen and the Swiss franc. This outcome may also be modestly negative for the US stock markets. If the dollar rises and stocks fall, then gold’s response may be relatively muted, although as a dollar-denominated commodity it too should fall. Obviously if the Fed comes across as more dovish than hawkish then one would expect the opposite reaction in these markets.If so, we would expect the dollar to rip, especially against currencies where the central bank is still very dovish – for example, the Japanese yen and the Swiss franc. This outcome may also be modestly negative for the US stock markets. If the dollar rises and stocks fall, then gold’s response may be relatively muted, although as a dollar-denominated commodity it too should fall. Obviously if the Fed comes across as more dovish than hawkish then one would expect the opposite reaction in these markets.
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Market calm as Fed 'bungee jump' loomsMarket calm as Fed 'bungee jump' looms
After hitting record highs last night, Wall Street is expected to open calmly in 30 minutes time.After hitting record highs last night, Wall Street is expected to open calmly in 30 minutes time.
That means the MSCI World stocks index remains at record levels, after fairly unspectacular sessions in Asia and Europe today.That means the MSCI World stocks index remains at record levels, after fairly unspectacular sessions in Asia and Europe today.
Investors are braced for today’s Federal Reserve meeting at 2pm East Coast time, followed by Janet Yellen’s press conference.Investors are braced for today’s Federal Reserve meeting at 2pm East Coast time, followed by Janet Yellen’s press conference.
US Opening Calls:#DOW 22370 -0.03%#SPX 2507 0.00%#NASDAQ 5991 +0.01%#IGOpeningCallUS Opening Calls:#DOW 22370 -0.03%#SPX 2507 0.00%#NASDAQ 5991 +0.01%#IGOpeningCall
As explained earlier, the Fed isn’t expected to raise interest rates today, but it will give new guidance about future rate hikes.As explained earlier, the Fed isn’t expected to raise interest rates today, but it will give new guidance about future rate hikes.
Crucially, it is also expected to outline how, and when, it will start unwinding its huge stimulus programme.Crucially, it is also expected to outline how, and when, it will start unwinding its huge stimulus programme.
Investors are hoping that Fed chair Janet Yellen and colleagues will tread cautiously to avoid causing market upheaval.Investors are hoping that Fed chair Janet Yellen and colleagues will tread cautiously to avoid causing market upheaval.
But are they too relaxed? Unravelling a $4.5 trillion balance sheet is no easy task; any gyrations in bond prices or the US dollar’s value will have global ramifications, potentially triggering surges of capital around the world.But are they too relaxed? Unravelling a $4.5 trillion balance sheet is no easy task; any gyrations in bond prices or the US dollar’s value will have global ramifications, potentially triggering surges of capital around the world.
Kit Juckes of Societe Generale, the French bank, says today’s meeting will all be about BSN - balance sheet normalisation.Kit Juckes of Societe Generale, the French bank, says today’s meeting will all be about BSN - balance sheet normalisation.
Starting BSN if that’s the right term, is a return to ‘peace-time’ policy before Janet Yellen departs (if she does).Starting BSN if that’s the right term, is a return to ‘peace-time’ policy before Janet Yellen departs (if she does).
It’s also an leap into relative unknown (never been done before) which is happening into a market which seems as relaxed as a teenager getting ready for a bungee jump. This market knows no fear.It’s also an leap into relative unknown (never been done before) which is happening into a market which seems as relaxed as a teenager getting ready for a bungee jump. This market knows no fear.
UpdatedUpdated
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A thought for the day, as we await news from the Fed:A thought for the day, as we await news from the Fed:
As the Fed ponders shrinking its bond holdings, a reminder from https://t.co/IQtf7StDTO pic.twitter.com/CIoDO7joYgAs the Fed ponders shrinking its bond holdings, a reminder from https://t.co/IQtf7StDTO pic.twitter.com/CIoDO7joYg
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Russia's B&N bank seeks bailoutRussia's B&N bank seeks bailout
There’s drama in Russia today, as one of the country’s largest banks seeks help.There’s drama in Russia today, as one of the country’s largest banks seeks help.
B&N has sought a bailout from the central bank; making it the second bank to hit trouble in three weeks.B&N has sought a bailout from the central bank; making it the second bank to hit trouble in three weeks.
The FT’s Max Seddon has more details:The FT’s Max Seddon has more details:
B&N Bank, Russia’s 12th largest bank by assets, is one of three top privately held banks highly exposed to Otkritie – Russia’s largest private lender until the central bank rescued it last month – through an informal group known as the “Garden Ring.”B&N Bank, Russia’s 12th largest bank by assets, is one of three top privately held banks highly exposed to Otkritie – Russia’s largest private lender until the central bank rescued it last month – through an informal group known as the “Garden Ring.”
The central bank estimates Otkritie may have a balance sheet hole of up to 400bn rubles; senior Russian bankers say the final total may be twice that.The central bank estimates Otkritie may have a balance sheet hole of up to 400bn rubles; senior Russian bankers say the final total may be twice that.
Russia’s central bank has confirmed it is in talks with B&N’s owners and will decide on a bailout in the near future.Russia’s central bank has confirmed it is in talks with B&N’s owners and will decide on a bailout in the near future.
Reuters has an interesting line too....Reuters has an interesting line too....
B&N Bank staff declined to comment outside its head office, three kilometers (1.9 miles) from the Kremlin, while a truck belonging to a firm called Shredder Express, which offers mobile document shredding, was parked on a private road in frontB&N Bank staff declined to comment outside its head office, three kilometers (1.9 miles) from the Kremlin, while a truck belonging to a firm called Shredder Express, which offers mobile document shredding, was parked on a private road in front
B&N Bank... said it had under-estimated the problems within the banks it had bought during an expansion drive. https://t.co/MPbgrGbP4nB&N Bank... said it had under-estimated the problems within the banks it had bought during an expansion drive. https://t.co/MPbgrGbP4n
1.16pm BST1.16pm BST
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All this week, the Guardian has been turning a spotlight on the escalating problem of debt in the UK.All this week, the Guardian has been turning a spotlight on the escalating problem of debt in the UK.
Today, the boss of Britain’s second-biggest doorstep lender, has told us about how illegal money lenders are targeting council estates, in search of vulnerable customers to sign up.Today, the boss of Britain’s second-biggest doorstep lender, has told us about how illegal money lenders are targeting council estates, in search of vulnerable customers to sign up.
Paul Smith, the chief executive of Morses Club, claims that people who have been turned down by official lenders are most at risk.Paul Smith, the chief executive of Morses Club, claims that people who have been turned down by official lenders are most at risk.
“Loan sharks live in the same block of flats that our customers live in, they live in the same council estates, they drink in the same pubs, they go to the same betting shops. You don’t find a loan shark, a loan shark finds you.“Loan sharks live in the same block of flats that our customers live in, they live in the same council estates, they drink in the same pubs, they go to the same betting shops. You don’t find a loan shark, a loan shark finds you.
“So the typical approach would be at a school gate to a mother: ‘I see your kid’s toes are hanging out of their shoes, it breaks my heart. Can’t you get a loan off Provident?’ – ‘I can’t, I failed to pay up on the last one, I can’t get another one.’ – ‘I’ll tell you what, I’ll lend you £500. Don’t worry about when you have to give me it back, I’ll pop around every week and you can just pay me’ – but the repayments never cease.”“So the typical approach would be at a school gate to a mother: ‘I see your kid’s toes are hanging out of their shoes, it breaks my heart. Can’t you get a loan off Provident?’ – ‘I can’t, I failed to pay up on the last one, I can’t get another one.’ – ‘I’ll tell you what, I’ll lend you £500. Don’t worry about when you have to give me it back, I’ll pop around every week and you can just pay me’ – but the repayments never cease.”
More here:More here:
Loan sharks are circling, says one of UK's biggest doorstep lenders https://t.co/kw5kcSSJ9qLoan sharks are circling, says one of UK's biggest doorstep lenders https://t.co/kw5kcSSJ9q
12.31pm BST12.31pm BST
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Kroll picks Dublin over London to avoid Brexit risksKroll picks Dublin over London to avoid Brexit risks
Lisa O'CarrollLisa O'Carroll
A New York credit ratings agency set up after the financial crash by former private investigator Jules Kroll has shunned London for its European headquarters because of Brexit.A New York credit ratings agency set up after the financial crash by former private investigator Jules Kroll has shunned London for its European headquarters because of Brexit.
Kroll Bond Rating Agency is opening its first base outside the US with more than 100 jobs over the next three years.Kroll Bond Rating Agency is opening its first base outside the US with more than 100 jobs over the next three years.
Mauricio Noé, who is heading up the company’s European expansion, said the UK’s departure from the EU was a factorMauricio Noé, who is heading up the company’s European expansion, said the UK’s departure from the EU was a factor
Noé told Irelands’ RTE radio that:Noé told Irelands’ RTE radio that:
“Brexit did influence us coming to Dublin … it wasn’t worth taking the risk on London, and actually Dublin is a good alternative and maybe better in some ways.”“Brexit did influence us coming to Dublin … it wasn’t worth taking the risk on London, and actually Dublin is a good alternative and maybe better in some ways.”
KBRA is the latest in a series of financial services operations to set up in Dublin as a means of maintaining or gaining access to the European single market in the event of the UK’s departure from the EU.KBRA is the latest in a series of financial services operations to set up in Dublin as a means of maintaining or gaining access to the European single market in the event of the UK’s departure from the EU.
Yesterday, the Irish prime minister announced that one of largest insurance syndicates at Lloyd’s of London, XL group, was moving its European headquarters to the Irish capital as part of the three way battle with Luxembourg and Paris for the insurance sector Brexit spoils.Yesterday, the Irish prime minister announced that one of largest insurance syndicates at Lloyd’s of London, XL group, was moving its European headquarters to the Irish capital as part of the three way battle with Luxembourg and Paris for the insurance sector Brexit spoils.
Noé said Dublin didn’t have the cluster of talent that London has. So, he is “aggressively targeting Irish diaspora in London and New York, particularly people with Irish girlfriends or wives to see if they would come back home to Dublin.”Noé said Dublin didn’t have the cluster of talent that London has. So, he is “aggressively targeting Irish diaspora in London and New York, particularly people with Irish girlfriends or wives to see if they would come back home to Dublin.”
Asked if the soaring cost of housing - rental and sales - was a deterrent, he replied.Asked if the soaring cost of housing - rental and sales - was a deterrent, he replied.
“The cost of housing is not so much the issue, it’s more people’s families ties, as it is always in moving people from one country to another.”“The cost of housing is not so much the issue, it’s more people’s families ties, as it is always in moving people from one country to another.”
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This chart highlights how Britons spent more on non-food items in August, and also relied more on internet shopping and catalogues (non-store spending).This chart highlights how Britons spent more on non-food items in August, and also relied more on internet shopping and catalogues (non-store spending).
Paul Mumford of Cavendish Asset Management argues that this is an encouraging sign that consumers aren’t “dead and buried” despite Brexit uncertainty.Paul Mumford of Cavendish Asset Management argues that this is an encouraging sign that consumers aren’t “dead and buried” despite Brexit uncertainty.
This is a promising sign for an industry that investors have shunned in recent months due to headwinds such as a rising minimum wage, and higher input costs in line with the Sterling fall.This is a promising sign for an industry that investors have shunned in recent months due to headwinds such as a rising minimum wage, and higher input costs in line with the Sterling fall.
The pound is now moving in the right direction for importers, and moderate inflation could be coming into play - lessening competitive pressures and making it easier for these companies to absorb rising input costs.The pound is now moving in the right direction for importers, and moderate inflation could be coming into play - lessening competitive pressures and making it easier for these companies to absorb rising input costs.
Notably the performance of non-store retailers is impressive, and demonstrates a continued trend towards online shopping, which in itself makes retailers more international, and less vulnerable to a weak pound.Notably the performance of non-store retailers is impressive, and demonstrates a continued trend towards online shopping, which in itself makes retailers more international, and less vulnerable to a weak pound.
11.49am BST11.49am BST
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Here’s Capital Economics’ take:Here’s Capital Economics’ take:
Strong retail sales figs this morning. Robust growth in sales values suggests not much belt-tightening happening despite real pay squeeze. pic.twitter.com/QMJGqCvP6KStrong retail sales figs this morning. Robust growth in sales values suggests not much belt-tightening happening despite real pay squeeze. pic.twitter.com/QMJGqCvP6K
11.35am BST11.35am BST
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Credit Suisse: BoE will hike in November, but it shouldn'tCredit Suisse: BoE will hike in November, but it shouldn't
Credit Suisse has joined the ranks of City experts predicting that the Bank of England will raise interest rates in November, from 0.25% to 0.5%.Credit Suisse has joined the ranks of City experts predicting that the Bank of England will raise interest rates in November, from 0.25% to 0.5%.
But they add a proviso - such a rate hike would be a mistake.But they add a proviso - such a rate hike would be a mistake.
In a new report to clients today, Credit Suisse argues that the UK economy hasn’t reached the point where monetary policy needs to be tightened.In a new report to clients today, Credit Suisse argues that the UK economy hasn’t reached the point where monetary policy needs to be tightened.
In their view, growth is too weak, especially as Brexit is creating “short-term political noise”.In their view, growth is too weak, especially as Brexit is creating “short-term political noise”.
They say:They say:
We think the BoE has misdiagnosed the amount of slack and growth potential in the UK economy.We think the BoE has misdiagnosed the amount of slack and growth potential in the UK economy.
The hike is unlikely to have a profoundly negative impact on the economy, but there is a risk of a non-linear response to the first rate hike in ten years. A tighter response to an (entirely) externally driven inflation overshoot today runs the risk of a sustained inflation undershoot in the future.The hike is unlikely to have a profoundly negative impact on the economy, but there is a risk of a non-linear response to the first rate hike in ten years. A tighter response to an (entirely) externally driven inflation overshoot today runs the risk of a sustained inflation undershoot in the future.
Jamie McGeever of Reuters also questions whether UK wages are really rising fast enough to justify a hike.Jamie McGeever of Reuters also questions whether UK wages are really rising fast enough to justify a hike.
Sept 15 - BoE's Vlieghe says "rising pay pressure" could lead to rate hike soonSept 20 - BoE survey finds UK wage growth is "subdued"Sept 15 - BoE's Vlieghe says "rising pay pressure" could lead to rate hike soonSept 20 - BoE survey finds UK wage growth is "subdued"
11.02am BST11.02am BST
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OECD: UK to lag behind the eurozone next yearOECD: UK to lag behind the eurozone next year
Britain’s economy will lag behind most international rivals next year, as the eurozone’s recovery strengthensBritain’s economy will lag behind most international rivals next year, as the eurozone’s recovery strengthens
That’s according to the OECD, which has just updated its economic forecasts.That’s according to the OECD, which has just updated its economic forecasts.
The good news is that the Paris-based thinktank sees Europe’s economy catching up with America. In particular, it has hiked its forecast for Italian growth to 1.2%, from 0.8%.The good news is that the Paris-based thinktank sees Europe’s economy catching up with America. In particular, it has hiked its forecast for Italian growth to 1.2%, from 0.8%.
The OECD says:The OECD says:
The upturn has become more synchronised across countries. Investment, employment and trade are expanding.The upturn has become more synchronised across countries. Investment, employment and trade are expanding.
But the bad news is that Britain’s growth is expected to slow, from 1.6% in 2016 to just 1% in 2018.But the bad news is that Britain’s growth is expected to slow, from 1.6% in 2016 to just 1% in 2018.
That would put the UK at the bottom of the G7 growth league!That would put the UK at the bottom of the G7 growth league!
OECD 2018 GDP forecasts:USA 2.4%Canada 2.3%Germany 2.1%Euro area 1.9%France 1.6%Italy 1.2%Japan 1.2%UK 1%https://t.co/z6qo1CZdvYOECD 2018 GDP forecasts:USA 2.4%Canada 2.3%Germany 2.1%Euro area 1.9%France 1.6%Italy 1.2%Japan 1.2%UK 1%https://t.co/z6qo1CZdvY
Here’s our news story about the OECB forecasts:Here’s our news story about the OECB forecasts:
11.01am BST11.01am BST
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Andrew Sentance, senior economic adviser at PwC, reckons UK shops benefitted because more people stayed at home this summer (as foreign holidays are rather pricier since the Brexit vote).Andrew Sentance, senior economic adviser at PwC, reckons UK shops benefitted because more people stayed at home this summer (as foreign holidays are rather pricier since the Brexit vote).
He also believes that the first UK interest rate in a decade is imminent:He also believes that the first UK interest rate in a decade is imminent:
“It is encouraging that retail sales proved resilient and bounced back in August. Anecdotal reports from retailers suggest that spending may have been helped by more “staycations” in response to the weakness of the pound which pushes up the cost of overseas travel.“It is encouraging that retail sales proved resilient and bounced back in August. Anecdotal reports from retailers suggest that spending may have been helped by more “staycations” in response to the weakness of the pound which pushes up the cost of overseas travel.
“The underlying picture has not changed greatly, though. In the past three months, retail sales volumes were just over 2 percent up on a year ago - and the annual growth rate has been hovering around 2 percent for most of this year. This is substantially below the growth rate of around 4.5 percent recorded in the three years 2014 to 2016 when inflation was much lower.“The underlying picture has not changed greatly, though. In the past three months, retail sales volumes were just over 2 percent up on a year ago - and the annual growth rate has been hovering around 2 percent for most of this year. This is substantially below the growth rate of around 4.5 percent recorded in the three years 2014 to 2016 when inflation was much lower.
“These latest figures will give further encouragement to the Bank of England to follow up their recent statements on the need to raise interest rates. The first rise in UK interest rates for over a decade has now become even more likely - and we could see this happen at the next MPC meeting in November.”“These latest figures will give further encouragement to the Bank of England to follow up their recent statements on the need to raise interest rates. The first rise in UK interest rates for over a decade has now become even more likely - and we could see this happen at the next MPC meeting in November.”
10.49am BST10.49am BST
10:4910:49
But.... the Bank of England is less upbeatBut.... the Bank of England is less upbeat
Hold on a moment, though. The Bank of England’s latest healthcheck on the UK economy suggests that consumers are cutting back.Hold on a moment, though. The Bank of England’s latest healthcheck on the UK economy suggests that consumers are cutting back.
The BoE’s latest Agents Survey, just released, suggests that cautious shoppers are cutting back, or buying cheaper items. Higher inflation, though, means they’re having to pay more at the tills.The BoE’s latest Agents Survey, just released, suggests that cautious shoppers are cutting back, or buying cheaper items. Higher inflation, though, means they’re having to pay more at the tills.
The survey is based on interviews with around 700 companies across the UK.The survey is based on interviews with around 700 companies across the UK.
Here are the key points:Here are the key points:
Consumer spending growth had eased slightly further in values terms. Manufacturing output growth had risen again, with exports supported by the past fall in sterling. Investment intentions were consistent with modest growth in spending over the year ahead.Consumer spending growth had eased slightly further in values terms. Manufacturing output growth had risen again, with exports supported by the past fall in sterling. Investment intentions were consistent with modest growth in spending over the year ahead.
Recruitment difficulties had edged higher and broadened slightly. Pay awards were clustered around 2%–3%.Recruitment difficulties had edged higher and broadened slightly. Pay awards were clustered around 2%–3%.
Consumer goods price inflation had picked up further, largely reflecting the effects of the past fall in sterling feeding through into retail prices. Consumer services price inflation had also edged higherConsumer goods price inflation had picked up further, largely reflecting the effects of the past fall in sterling feeding through into retail prices. Consumer services price inflation had also edged higher