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| UK inflation at three-year low; Brexit worries weigh - as it happened | |
| (about 1 hour later) | |
| Rolling coverage of the latest economic and financial news | Rolling coverage of the latest economic and financial news |
| Time for a quick summary | |
| UK inflation remained at the lowest level in three years in November. The Consumer Prices Index stuck at 1.5%, despite rising prices for a variety of goods including chocolate, concert tickets and package holidays. | |
| UK house prices are also subdued, with prices rising by just 0.7% in the year to October. The Yorkshire market was quite buoyant, but London prices fell again. | |
| Sterling has had another poor day, as the UK’s insistence of ending its Brexit transition period at the end of December worries traders. The pound has dropped half a cent to $1.3078, wiping out all its gains since the general election. | |
| German business confidence has risen, easing recession worries. | |
| Wall Street has hit a fresh record high today, as New York ends the year strongly. | |
| The Bank of England is to test the UK’s financial sector’s ability to handle the climate crisis. | |
| Peugeot and Fiat Chrysler have agreed terms of a £38bn merger | |
| That’s all for tonight! Thanks for reading and commenting. GW | |
| The UK stock market has closed for the night, with the FTSE 100 up 15 points. | The UK stock market has closed for the night, with the FTSE 100 up 15 points. |
| With the pound still suffering from Brexit angst, international companies led the risers. Pharmaceutical firm Hikma gained 4%, with global equipment rental firm Ashtead 3% higher. | With the pound still suffering from Brexit angst, international companies led the risers. Pharmaceutical firm Hikma gained 4%, with global equipment rental firm Ashtead 3% higher. |
| But UK builders had a bad day, with Berkeley and Persimmon down 2% each. | But UK builders had a bad day, with Berkeley and Persimmon down 2% each. |
| From shipping to craning.... and the world’s biggest crane has been in action today, helping to construct the Hinkley Point C nuclear power station. | From shipping to craning.... and the world’s biggest crane has been in action today, helping to construct the Hinkley Point C nuclear power station. |
| Big Carl, which stands 250 metres high, successfully moved a 170 tonne (!) piece of the Hinkley reactor’s “steel containment liner” at 4.30am this morning. | Big Carl, which stands 250 metres high, successfully moved a 170 tonne (!) piece of the Hinkley reactor’s “steel containment liner” at 4.30am this morning. |
| Here are some impressive photos, which have quite a sci-fi feel.... | Here are some impressive photos, which have quite a sci-fi feel.... |
| The Baltic Dry index is one of those esoteric financial benchmarks that may actually give a handy insight into the real economy. | The Baltic Dry index is one of those esoteric financial benchmarks that may actually give a handy insight into the real economy. |
| It measures the cost of shipping goods around the world, and thus can gauge how much demand there is for supertankers and smaller ships. | It measures the cost of shipping goods around the world, and thus can gauge how much demand there is for supertankers and smaller ships. |
| So it’s worth noting that the Index has dropped close to a six-month low today, with weaker demand for a range of vessel sizes. It’s the 11th daily drop in a row. | So it’s worth noting that the Index has dropped close to a six-month low today, with weaker demand for a range of vessel sizes. It’s the 11th daily drop in a row. |
| Wall Street has opened cautiously, as traders await the historic vote on whether to impeach Donald Trump (liveblog here). | Wall Street has opened cautiously, as traders await the historic vote on whether to impeach Donald Trump (liveblog here). |
| Shares are a little higher, with the Dow Jones industrial average gaining 39 points or 0.14% to 28,306 - back towards yesterday’s intraday high. | Shares are a little higher, with the Dow Jones industrial average gaining 39 points or 0.14% to 28,306 - back towards yesterday’s intraday high. |
| The tech-focused Nasdaq has hit a record high, up 17 points or 0.2% at 8,840. | The tech-focused Nasdaq has hit a record high, up 17 points or 0.2% at 8,840. |
| A lot of people have been citing December 2020 as the big Brexit deadline. But actually, June could be the real cliff edge date. | A lot of people have been citing December 2020 as the big Brexit deadline. But actually, June could be the real cliff edge date. |
| That the last date for the UK to request an extension, EU insiders insist. The withdrawal agreement stipulates that the transition can be extended by “one or two years”, but that would probably involve the UK committing more money for the EU budget. | That the last date for the UK to request an extension, EU insiders insist. The withdrawal agreement stipulates that the transition can be extended by “one or two years”, but that would probably involve the UK committing more money for the EU budget. |
| My colleague Jennifer Rankin reports that Brussels believes Johnson is serious about not seeking such an extension: | My colleague Jennifer Rankin reports that Brussels believes Johnson is serious about not seeking such an extension: |
| But.. this cliff-edge wouldn’t be as serious as crashing out of the EU without a withdrawal agreement: | But.. this cliff-edge wouldn’t be as serious as crashing out of the EU without a withdrawal agreement: |
| Back in the markets, sterling is weakening further as traders keep fretting about Brexit. | Back in the markets, sterling is weakening further as traders keep fretting about Brexit. |
| The pound has lost more than half a cent against the US dollar today, to $1.3060 - or more than four cents below its post-election spike. | The pound has lost more than half a cent against the US dollar today, to $1.3060 - or more than four cents below its post-election spike. |
| JP Morgan has warned there’s a 25% risk that the UK and EU fail to agree a trade deal by the end of 2020. This is “uncomfortably high”, it says. | JP Morgan has warned there’s a 25% risk that the UK and EU fail to agree a trade deal by the end of 2020. This is “uncomfortably high”, it says. |
| But the bank also believes there’s a 50% chance that a deal is reached, and only a 20% possibility of the transition period being extended. | But the bank also believes there’s a 50% chance that a deal is reached, and only a 20% possibility of the transition period being extended. |
| David Lidington, who was effectively deputy prime minister under Theresa May, has predicted that a ‘core’ trade deal will be agreed by the end of December 2020. | David Lidington, who was effectively deputy prime minister under Theresa May, has predicted that a ‘core’ trade deal will be agreed by the end of December 2020. |
| Speaking of the Bank of England... the central bank has outlined new climate emergency stress tests. | Speaking of the Bank of England... the central bank has outlined new climate emergency stress tests. |
| They will examine whether UK banks and insurance companies are prepared for the impact of climate change. It will consider a range of scenarios, including temperature rises of up to 4 degrees celsius (double the Paris climate agreement). More here: | They will examine whether UK banks and insurance companies are prepared for the impact of climate change. It will consider a range of scenarios, including temperature rises of up to 4 degrees celsius (double the Paris climate agreement). More here: |
| Professor Costas Milas of Liverpool University argues that UK interest rates are likely to be cut next year - whether Brexit goes smoothly or not. | Professor Costas Milas of Liverpool University argues that UK interest rates are likely to be cut next year - whether Brexit goes smoothly or not. |
| He writes: | He writes: |
| But what if the trade deal negotiations hit hurdles? | But what if the trade deal negotiations hit hurdles? |
| As a knowledgable and well-read lot, I’m sure you’ll have NO TROUBLE at all tackling our Christmas quiz. | As a knowledgable and well-read lot, I’m sure you’ll have NO TROUBLE at all tackling our Christmas quiz. |
| It’s just been published, covering some of the biggest business news stories of the year: | It’s just been published, covering some of the biggest business news stories of the year: |
| Inflation is rising particularly briskly in the North of England, according to think tank NIESR. | Inflation is rising particularly briskly in the North of England, according to think tank NIESR. |
| NIESR (the National Institute of Economic and Social Research) has calculated that ‘underlying inflation’ rose by 1% across the UK (this measure excludes ‘extreme price movements’). | NIESR (the National Institute of Economic and Social Research) has calculated that ‘underlying inflation’ rose by 1% across the UK (this measure excludes ‘extreme price movements’). |
| But while this underlying inflation rose by 1.5% in the North, it only picked up by 0.7% in the South East, and by 0.9% in Scotland. That’s based on 130,088 “locally collected” prices. | But while this underlying inflation rose by 1.5% in the North, it only picked up by 0.7% in the South East, and by 0.9% in Scotland. That’s based on 130,088 “locally collected” prices. |
| NIESR economist Janine Boshoff said: | NIESR economist Janine Boshoff said: |
| A quick dig into November’s inflation report shows that the price of some types of food have risen sharply. | A quick dig into November’s inflation report shows that the price of some types of food have risen sharply. |
| Chocolate, for example, is 4.3% more expensive than a year ago. | Chocolate, for example, is 4.3% more expensive than a year ago. |
| Ice-creams and ‘edible ices’ cost a chunky 6.1% more (which is intriguing, as November isn’t really peak season). | Ice-creams and ‘edible ices’ cost a chunky 6.1% more (which is intriguing, as November isn’t really peak season). |
| Yoghurt is up 12.5%, margarine by 15.9%, while pasta and couscous is 17.7% more expensive than November 2018. | Yoghurt is up 12.5%, margarine by 15.9%, while pasta and couscous is 17.7% more expensive than November 2018. |
| In the drinks section, cocoa and powdered chocolate was 7.7% more expensive than a year ago, while fruit and vegetable juices were 8.9% pricier. | In the drinks section, cocoa and powdered chocolate was 7.7% more expensive than a year ago, while fruit and vegetable juices were 8.9% pricier. |
| Here’s a sector-by-sector breakdown of the November inflation report: | Here’s a sector-by-sector breakdown of the November inflation report: |
| OVERALL CONSUMER PRICES: 1.5% over the last year | OVERALL CONSUMER PRICES: 1.5% over the last year |
| Food and non-alcoholic beverages: 2.1% | Food and non-alcoholic beverages: 2.1% |
| Alcoholic beverages and tobacco: 1.9% | Alcoholic beverages and tobacco: 1.9% |
| Clothing and footwear: unchanged | Clothing and footwear: unchanged |
| Housing, water, electricity, gas and other fuels: 1.2% | Housing, water, electricity, gas and other fuels: 1.2% |
| Furniture, household equipment and maintenance: 1.2% | Furniture, household equipment and maintenance: 1.2% |
| Health: 2.9% | Health: 2.9% |
| Transport: 0.8% | Transport: 0.8% |
| Communication: 3.3% | Communication: 3.3% |
| Recreation and culture: 1.5% | Recreation and culture: 1.5% |
| Education: 2.7% | Education: 2.7% |
| Restaurants and hotels: 2.4% | Restaurants and hotels: 2.4% |
| Miscellaneous goods and services: 1.9% | Miscellaneous goods and services: 1.9% |
| Economists agree that Britain’s low inflation means there’s no chance that the Bank of England will raise interest rates soon. | Economists agree that Britain’s low inflation means there’s no chance that the Bank of England will raise interest rates soon. |
| The BoE sets rates tomorrow, at its last meeting of 2019, but Jing Teow, economist at PwC, doesn’t expect fireworks: | The BoE sets rates tomorrow, at its last meeting of 2019, but Jing Teow, economist at PwC, doesn’t expect fireworks: |
| Yael Selfin, chief economist at KPMG UK, predicts that inflation will stay low next year - potentially allowing the BoE to cut borrowing costs. | Yael Selfin, chief economist at KPMG UK, predicts that inflation will stay low next year - potentially allowing the BoE to cut borrowing costs. |