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| UK inflation falls to 13-month low, sending pound sliding – business live | UK inflation falls to 13-month low, sending pound sliding – business live |
| (35 minutes later) | |
| After hitting $80 a share in recent days, oil prices have been slipping back and lost more ground after US stockpiles unexpectedly rose last week. | |
| US crude stocks rose by 5.8m barrels compared with forecasts of a decrease of 1.6m, showing demand was less than expected. Gasoline stocks climbed by 1.9m barrels, according to the Energy Information Administration, rather than the anticipated 1.4m barrel drop. | |
| So Brent crude has dipped 0.73% to $78.99 a barrel. West Texas Intermediate, the US benchmark, is down 0.9% at $71.54. | |
| Eurozone consumer confidence was slightly worse than expected in May, according to the latest figures from the European Commission. | |
| Its eurozone consumer confidence index dipped from 0.3 points in April to 0.2 points, compared to forecasts of an unchanged figure. In the wider European Union, sentiment rose by 0.4 points to -0.1 in May. | |
| Some positive US economic data, with higher manufacturing and service sector figures. | Some positive US economic data, with higher manufacturing and service sector figures. |
| IHS Markit’s preliminary manufacturing PMI for May rose from 56.5 in April to 56.6, a 44 month high. Its services business activity index climbed from 54.6 to a three month high of 55.7, while the composite index went from 54.9 in April to 55.7. | IHS Markit’s preliminary manufacturing PMI for May rose from 56.5 in April to 56.6, a 44 month high. Its services business activity index climbed from 54.6 to a three month high of 55.7, while the composite index went from 54.9 in April to 55.7. |
| Chris Williamson, chief business economist at IHS Markit said: | Chris Williamson, chief business economist at IHS Markit said: |
| The flash May PMI surveys point to an encouragingly solid pace of economic growth of 2.5- 3% with monthly job gains running at just over 200,000, though the interesting action is coming on the prices front. | The flash May PMI surveys point to an encouragingly solid pace of economic growth of 2.5- 3% with monthly job gains running at just over 200,000, though the interesting action is coming on the prices front. |
| Input costs measured across both manufacturing and services are rising at the fastest rate for nearly five years, with the goods-producing sector seeing the steepest cost increases for seven years in recent months. | Input costs measured across both manufacturing and services are rising at the fastest rate for nearly five years, with the goods-producing sector seeing the steepest cost increases for seven years in recent months. |
| Furthermore, supplier delivery delays, a key forward-indicator of inflationary pressures, have risen to the highest seen in the 11 year survey history. Rising demand has stretched supply chains to the extent that suppliers are increasingly able to demand higher prices. At the same time, higher oil and energy prices are pushing up firms’ costs. | Furthermore, supplier delivery delays, a key forward-indicator of inflationary pressures, have risen to the highest seen in the 11 year survey history. Rising demand has stretched supply chains to the extent that suppliers are increasingly able to demand higher prices. At the same time, higher oil and energy prices are pushing up firms’ costs. |
| Business optimism meanwhile remains at a three- year high, with companies commonly expecting rising demand to help drive business growth, setting the scene for further strong survey results in coming months. | Business optimism meanwhile remains at a three- year high, with companies commonly expecting rising demand to help drive business growth, setting the scene for further strong survey results in coming months. |
| US markets have followed their European counterparts into negative territory, as optimism over the US-China trade talks faded after comments from President Trump, who also suggested the planned summit with North Korea may not go ahead after all. | US markets have followed their European counterparts into negative territory, as optimism over the US-China trade talks faded after comments from President Trump, who also suggested the planned summit with North Korea may not go ahead after all. |
| Ahead of the latest minutes from the Federal Reserve, the Dow Jones Industrial Average has fallen 125 points or 0.49% while the S&P 500 opened 0.38% lower and the Nasdaq Composite lost 0.59%. | Ahead of the latest minutes from the Federal Reserve, the Dow Jones Industrial Average has fallen 125 points or 0.49% while the S&P 500 opened 0.38% lower and the Nasdaq Composite lost 0.59%. |
| POTUS' tweet oft good news pending for US autoworkers is seen as a hint of progress on NAFTA. $CAD and $MXN turn better bid. | POTUS' tweet oft good news pending for US autoworkers is seen as a hint of progress on NAFTA. $CAD and $MXN turn better bid. |
| It’s time for some more outpourings from President Trump’s twitter account, and this time it appears to be a jobs promise: | It’s time for some more outpourings from President Trump’s twitter account, and this time it appears to be a jobs promise: |
| There will be big news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough! | There will be big news coming soon for our great American Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough! |
| The pound continues to come under pressure, down 0.9% against the dollar at $1.3316 and losing more than 2% against the Japanese yen, the second biggest daily drop this year. | The pound continues to come under pressure, down 0.9% against the dollar at $1.3316 and losing more than 2% against the Japanese yen, the second biggest daily drop this year. |
| The unexpected fall in inflation in April has made an interest rate rise in August less likely, according to many commentators. But not everyone agrees: | The unexpected fall in inflation in April has made an interest rate rise in August less likely, according to many commentators. But not everyone agrees: |
| UK inflation fell in April because data are collected mid-month, so didn't capture the usual rise in transport prices around Easter this yr. April's print matches the MPC f'cast, and inflation looks set to RISE over the summer due to ↑oil prices. An Aug rate hike remains likely. pic.twitter.com/55ijGclqS1 | UK inflation fell in April because data are collected mid-month, so didn't capture the usual rise in transport prices around Easter this yr. April's print matches the MPC f'cast, and inflation looks set to RISE over the summer due to ↑oil prices. An Aug rate hike remains likely. pic.twitter.com/55ijGclqS1 |
| Here’s our economics correspondent Richard Partington on today’s inflation figures: | Here’s our economics correspondent Richard Partington on today’s inflation figures: |
| UK inflation unexpectedly fell further last month to the lowest level in more than a year, as lower airfares provided some relief for cash-strapped Britons. | UK inflation unexpectedly fell further last month to the lowest level in more than a year, as lower airfares provided some relief for cash-strapped Britons. |
| The consumer price index dropped from 2.5% in March to 2.4%, according to the Office for National Statistics (ONS). Economists had expected the annual rate of growth in prices to remain unchanged. | The consumer price index dropped from 2.5% in March to 2.4%, according to the Office for National Statistics (ONS). Economists had expected the annual rate of growth in prices to remain unchanged. |
| This decline will be welcomed by consumers under sharp pressure from rising prices since the Brexit vote, when a sudden drop in the value of the pound pushed up the cost of imported goods. | This decline will be welcomed by consumers under sharp pressure from rising prices since the Brexit vote, when a sudden drop in the value of the pound pushed up the cost of imported goods. |
| While the impact from sterling’s fall has started to fade, economists reckoned higher fuel prices would force inflation to remain above the Bank of England’s target of 2%. | While the impact from sterling’s fall has started to fade, economists reckoned higher fuel prices would force inflation to remain above the Bank of England’s target of 2%. |
| The latest fall raises fresh questions for Threadneedle Street, after the bank delayed raising interest rates earlier this month as a consequence of weak economic growth and inflation falling further than expected in March. The pound dropped by two-thirds of a cent against the dollar on foreign exchanges, reaching a five-month low of $1.3370. | The latest fall raises fresh questions for Threadneedle Street, after the bank delayed raising interest rates earlier this month as a consequence of weak economic growth and inflation falling further than expected in March. The pound dropped by two-thirds of a cent against the dollar on foreign exchanges, reaching a five-month low of $1.3370. |
| The ONS said airfares provided the biggest downward contribution, due to the timing of Easter. Airlines typically raise their prices around the holiday, although the ONS said it had found no impact this year because Easter fell between its March and April price collection periods. | The ONS said airfares provided the biggest downward contribution, due to the timing of Easter. Airlines typically raise their prices around the holiday, although the ONS said it had found no impact this year because Easter fell between its March and April price collection periods. |
| Soft drink prices had their biggest increase for this time of year, rising sharply in March and April following the introduction of the sugar tax. However, Mike Hardie of the ONS said many retailers had yet to pass on the impact of the levy to shoppers. | Soft drink prices had their biggest increase for this time of year, rising sharply in March and April following the introduction of the sugar tax. However, Mike Hardie of the ONS said many retailers had yet to pass on the impact of the levy to shoppers. |
| More here: | More here: |
| Back in the UK, new data has confirmed that London’s housing market has come firmly off the boil. | Back in the UK, new data has confirmed that London’s housing market has come firmly off the boil. |
| Property prices in the capital have fallen by 0.7% in the last year - making London the only part of the UK with negative house price inflation. | Property prices in the capital have fallen by 0.7% in the last year - making London the only part of the UK with negative house price inflation. |
| Our personal finance editor Patrick Collinson explains: | Our personal finance editor Patrick Collinson explains: |
| Property experts in London said buyers are “sensing blood in the water” with sellers forced to cut prices steeply to ensure a sale. | Property experts in London said buyers are “sensing blood in the water” with sellers forced to cut prices steeply to ensure a sale. |
| Jonathan Hopper of Garrington Property Finders said: “London is paying a painfully high price for its stellar run of price rises, and a correction is now under way in several parts of the capital. | Jonathan Hopper of Garrington Property Finders said: “London is paying a painfully high price for its stellar run of price rises, and a correction is now under way in several parts of the capital. |
| “Sellers are being forced to trim their expectations, and astute buyers are increasingly sensing blood in the water.” | “Sellers are being forced to trim their expectations, and astute buyers are increasingly sensing blood in the water.” |
| London is the only major region of the UK to see falling house prices over the past year. ONS figures: https://t.co/9yUOpfnG89 pic.twitter.com/RLuIyHefEw | London is the only major region of the UK to see falling house prices over the past year. ONS figures: https://t.co/9yUOpfnG89 pic.twitter.com/RLuIyHefEw |
| UK average house price growth was 4.2%y/y according to ONS Land Registry. London still seeing average house price falls (-0.7%). Plenty of regional variation as per usual. Scotland with highest rate of growth (not so usual). Quite a gap between London & rest now. pic.twitter.com/Xs3Cf1h1Oc | UK average house price growth was 4.2%y/y according to ONS Land Registry. London still seeing average house price falls (-0.7%). Plenty of regional variation as per usual. Scotland with highest rate of growth (not so usual). Quite a gap between London & rest now. pic.twitter.com/Xs3Cf1h1Oc |
| Newsflash: Breaking away from UK inflation, US media conglomerate Comcast has just announced it is preparing an all-cash offer for most of Twenty-First Century Fox - Rupert Murdoch’s media empire. | Newsflash: Breaking away from UK inflation, US media conglomerate Comcast has just announced it is preparing an all-cash offer for most of Twenty-First Century Fox - Rupert Murdoch’s media empire. |
| That’s a fascinating development, because Murdoch has agreed to sell 21CF to Disney for $52.4bn. | That’s a fascinating development, because Murdoch has agreed to sell 21CF to Disney for $52.4bn. |
| Comcast has already tried to gatecrash the 21CF-Disney deal by bidding for UK broadcaster Sky, challenging Fox’s own bid for Sky (it already owns a 39% stake). | Comcast has already tried to gatecrash the 21CF-Disney deal by bidding for UK broadcaster Sky, challenging Fox’s own bid for Sky (it already owns a 39% stake). |
| It is now upping the stakes and trying to thwart Disney by acquiring 21CF for itself. | It is now upping the stakes and trying to thwart Disney by acquiring 21CF for itself. |
| BREAKING: Comcast says it is in the advanced stages of preparing all-cash bid for Fox assets https://t.co/qzDA61KjmD | BREAKING: Comcast says it is in the advanced stages of preparing all-cash bid for Fox assets https://t.co/qzDA61KjmD |
| Comcast, which owns NBC Universal and Universal Pictures, says it will beat Disney’s offer, telling investors. | Comcast, which owns NBC Universal and Universal Pictures, says it will beat Disney’s offer, telling investors. |
| Any offer for Fox would be all-cash and at a premium to the value of the current all-share offer from Disney. | Any offer for Fox would be all-cash and at a premium to the value of the current all-share offer from Disney. |
| Today’s slide means the pound has now lost 10 whole cents against the US dollar since 16 April, when it was worth $1.43. | Today’s slide means the pound has now lost 10 whole cents against the US dollar since 16 April, when it was worth $1.43. |
| This slide was triggered by Bank of England governor Mark Carney, who warned that weak economic data and Brexit uncertainty might hold back interest rate increases. | This slide was triggered by Bank of England governor Mark Carney, who warned that weak economic data and Brexit uncertainty might hold back interest rate increases. |
| The ongoing cabinet infighting over Britain’s future customs relationships with the EU has also weakened sterling, as it raises the chances of a hard Brexit. | The ongoing cabinet infighting over Britain’s future customs relationships with the EU has also weakened sterling, as it raises the chances of a hard Brexit. |
| A weak pound drives up inflation, by making imports pricier., and several experts are predicting that inflation will rise again later this year. | A weak pound drives up inflation, by making imports pricier., and several experts are predicting that inflation will rise again later this year. |
| Joel Dungate, investment analyst at investment management and stockbroking firm Redmayne Bentley, explains: | Joel Dungate, investment analyst at investment management and stockbroking firm Redmayne Bentley, explains: |
| There are reasons why future inflation may move back up. In recent weeks, the price of oil has risen sharply and the value of the Pound has fallen again, both of which could drive up the costs of goods. | There are reasons why future inflation may move back up. In recent weeks, the price of oil has risen sharply and the value of the Pound has fallen again, both of which could drive up the costs of goods. |
| In addition, recent data showed that wage growth had overtaken inflation, putting more money into the pockets of consumers. In theory this could increase demand and push prices higher.” | In addition, recent data showed that wage growth had overtaken inflation, putting more money into the pockets of consumers. In theory this could increase demand and push prices higher.” |
| Brent crude oil hit its highest levels since 2014 last week, at over $80 per barrel. | Brent crude oil hit its highest levels since 2014 last week, at over $80 per barrel. |
| Rob Scammell, senior portfolio manager at Kempen Capital Management, believes this will hit consumers in the pocket. | Rob Scammell, senior portfolio manager at Kempen Capital Management, believes this will hit consumers in the pocket. |
| “Oil price rises have not yet fed through to the UK – but this could be just a matter of time. With a further 10% rise in oil in sterling terms over the last month, it seems unlikely that this restraint can last for long. | “Oil price rises have not yet fed through to the UK – but this could be just a matter of time. With a further 10% rise in oil in sterling terms over the last month, it seems unlikely that this restraint can last for long. |
| Could someone hand the pound a sponge and a towel? | Could someone hand the pound a sponge and a towel? |
| Sterling has now shed a whole cent against the US dollar to $1.3328 (still a 5-month low). | Sterling has now shed a whole cent against the US dollar to $1.3328 (still a 5-month low). |
| Although the inflation rate dropped last month, it’s important to note that the cost of living is still higher than a year ago. | Although the inflation rate dropped last month, it’s important to note that the cost of living is still higher than a year ago. |
| Each of the main areas - food, transport, housing costs - cost more in April 2018 than April 2017, as this chart shows: | Each of the main areas - food, transport, housing costs - cost more in April 2018 than April 2017, as this chart shows: |
| The report shows that food prices have risen 2.4% in the last year (including a 5.8% jump in fish prices). | The report shows that food prices have risen 2.4% in the last year (including a 5.8% jump in fish prices). |
| Soft drinks cost 6.2% more than in April 2017 (thanks to the sugar tax), while tobacco is 6.1% pricier. | Soft drinks cost 6.2% more than in April 2017 (thanks to the sugar tax), while tobacco is 6.1% pricier. |
| Clothing costs are up by 1.7%, while furniture is up 2.4%. | Clothing costs are up by 1.7%, while furniture is up 2.4%. |
| Although air fares were 7.9% cheaper year-on-year (due to the early Easter), this was balanced out by a 4.2% increase in the cost of new cars. | Although air fares were 7.9% cheaper year-on-year (due to the early Easter), this was balanced out by a 4.2% increase in the cost of new cars. |