Economic growth of 6.5% in the third quarter was the weakest since early 2009 and is expected to slow further as the effects of China’s trade war with the US take hold
As Theresa May returns from Brussels with no Brexit deal, to major divisions in her own party and a people’s vote march on Saturday, big business is also keeping up the pressure.
In the latest intervention, the president of Japanese car maker Toyota has said a no-deal Brexit should be avoided “at all costs”.
Apprehension is therefore growing that a withdrawal without agreement may become a reality.
It is necessary that an unimpaired trade environment between the United Kingdom and the European Union be maintained and that the automobile industry’s activities remain predicated on shared standards, including those regulating vehicle certification.
He’s the chief executive of a FTSE 100 housebuilder and his huge £75m bonus payout – the biggest of any UK listed company – attracted widespread criticism earlier in the year.
Yet Jeff Fairburn was lost for words when Spencer Stokes, a BBC journalist for Look North in Yorkshire, asked him about it during an interview.
I’d rather not talk about that, it’s been well covered actually.
I think that’s really unfortunate actually that you’ve done that.
The latest figures on the UK’s public finances have reinforced expectations that the Treasury’s independent forecaster will revise down borrowing for 2018-19.
At the time of the Spring Statement in March, the Office for Budget Responsibility was forecasting borrowing to fall to £37.1bn from £45.2bn in 2017-18.
While there could be some catch-up in public spending later in the year, we still expect public borrowing in 2018/19 as a whole to be only around £30 billion, which would be around £7 billion less than the OBR forecast back in March.
This borrowing undershoot should give the chancellor a little extra wiggle room for his budget, but it will not be enough on its own to cover the cost of announced increases in spending on the NHS, let alone other priority areas where there is pressure to bring austerity to an end.
The budget is therefore still likely to require some tough choices between net tax rises, higher borrowing in the medium term and allowing austerity to continue in parts of the public sector.
The chancellor Philip Hammond may well have a spring in his step this morning, after the latest official figures show government borrowing fell more than expected in September.
Borrowing was £4.1bn last month, less than the £4.5bn predicted by economists and £800m than a year earlier according to the Office for National Statistics.
Not all businesses are reaping the benefits of consumer demand in China.
New Look, the value high street fashion retailer, is exiting China, closing all 120 stores with the loss of more than 700 jobs.
Corporate results this morning help to put into context slowing growth in China, where swelling middle classes continue to drive demand for luxury goods.
Investors across Europe are subdued as the week draws to a close.
It’s a mixed picture, with the FTSE outperforming its peers. On the flip side, the FTSE MIB is firmly in the red in Italy, where budget concerns continue to weigh on investor minds and are dragging down banking shares.
Putting China’s growth figures in context, Neil Wilson at markets.com says growth of 6.5% is “a nice problem to have”.
Growth of 6.5% rather than 6.6% is a pretty nice problem to have but the trade war with the US, higher debt levels and a depreciating currency remain a concern.
Any bounce in Chinese stocks needs to be seen in the context of the three-year collapse in equities.
One of the weaker spots in China’s economy was industrial production, with growth slowing to 5.8% year-on-year in September, from 6.1% in August.
Freya Beamish, chief Asia economist at Pantheon, says:
The slowdown makes sense in the context of the sharp downtrend in the manufacturing PMIs in recent months.
The breakdowns available at this stage offer little sign of green shoots. In particular, cement production is falling again, though this could reflect environmental curbs, rather than suggesting that the construction sector is back in the doldrums, after its recent positive contribution.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
China’s economy grew by 6.5% in the third quarter according to official figures published this morning.
Official GDP growth slowed last quarter consistent with broader evidence that the economy is cooling. There are some early signs in the September data that policy support is starting to gain traction, but we think more easing will still be needed in order to stabilise growth.
Looking ahead, we doubt the latest pick-up in infrastructure spending will be enough to prevent the economy from cooling further in the coming quarters. Policy easing has yet to reverse the downward trajectory in broad credit growth, a key headwind to the economy, and front-loading by US importers means that the impact of tariffs has yet to be felt.