Rolling coverage of the latest economic and financial news, as Chinese manufacturers suffer biggest drop in exports since the financial crisis
- Introduction: Chinese factory exports tumble
- Biggest fall in exports since 2009
- Trump-Kim summit failure hits stocks
- European markets down
The respected Migration Observatory at the University of Oxford points out that net EU migration has now fallen 70% since the EU referendum.
Madeleine Sumption, Director of the Migration Observatory, says Britain simply isn’t as attractive to EU migrants than in 2016, for several reasons:
That may be because of Brexit-related political uncertainty, the falling value of the pound making UK wages less attractive, or simply the fact that job opportunities have improved in other EU countries.
EU net migration happened to be unusually high in the run-up to the referendum, so at least some of this decline would probably have happened anyway even without Brexit.”
ONS has had a bit of trouble with their non-EU students data in recent years for various technical reasons, which raises the question whether this upward spike in study is ‘real’. So it’s useful to see that visa data DO confirm the upward trend in non-EU study. pic.twitter.com/TNZMFPadbD
The ONS also reports that more people are coming to the UK to study:
Here’s Matthew Fell, the CBI’s chief UK policy director, on the drop in EU migration:
Businesses can’t succeed without access skills & labour, which is why it’s so important the Govt delivers a post-Brexit immigration system which is both open & controlled. These figures confirm fewer EU workers are coming to the UK, exacerbating labour & skills shortages. https://t.co/shqNIlurI4
Stephen Clarke, Senior Economic Analyst at the Resolution Foundation, says EU workers are voting with their feet, and quitting the UK:
“While UK politicians are seemingly unable to provide any clarity on where Britain is heading post-Brexit, EU migrants are increasingly doing so – by leaving.
“EU migration is now at its lowest level in a decade – a fall that is being driven by fewer EU migrants coming to the UK for work. In contrast, migration from the rest of the world is close to a record high, though many of these migrants are coming to study rather than work.
“Post-Brexit Britain’s migration system is still to be decided, and is years away from coming into effect. But many areas of the labour market – particularly firms in high-turnover sectors like hospitality who are reliant on the free movement of EU workers – are going to have to adjust to lower migration well before the new system is in place.”
Sky News’s Ed Conway has spotted that net migration from European countries to the UK is now lower than before the EU’s major expansion in 2004:
Astonishing just how quickly net migration from the EU has collapsed since the referendum. Now down to the lowest level since 2002, by my reckoning. In other words BEFORE Poland joined the EU pic.twitter.com/kGRbjqygkc
Tej Parikh, Senior Economist at the Institute of Directors, says today’s migration figures show that firms are struggling to hire workers in the face of Brexit uncertainty.
“With job vacancies at record highs, recruiting from abroad has never been more crucial for British businesses. Flexible and hassle-free access to international skillsets is part and parcel of having a globally competitive skills regime, so adjusting to the Government’s post-Brexit immigration agenda, with its new restrictions, will present some challenges.
“Already, firms across the retail, hospitality and construction sectors are facing obstacles as some EU workers are returning home, while it’s also becoming harder to attract labour from Europe amidst the uncertain political climate. Larger organisations have looked to hire from further afield to compensate, despite the additional paper work, but this can be harder for many resource-constrained SMEs.
The latest UK migration statistics are out, and they give a fascinating insight into the changes that are taking place since the Brexit vote.
Total migration was “broadly stable” in the 12 months to September 2018, with 283,00 more people arriving than leaving – slightly more than a year ago.
New ONS data:
– EU Net Migration at lowest since 2009. EU8 migrants leaving.
– Non-EU net migration at highest since 2004.
– ´Tens of thousands’ target still as stupid as day it was plucked out of air as policy.
– For EU citizens, UK less desirable.
Let’s catch up with the flurry of UK corporate news.
Fiona Cincotta of www.cityindex.co.uk blames increased political tensions in Asia (Kashmir, North Korea…) for today’s selloff:
An escalation of geopolitical tensions between India and Pakistan, to the worst levels since the 1971 war between the two nations has given investors another concern to add to their already long list.
Investors showed no signs of wanting to extend the recent rally in equities, with risk instead coming off the table and riskier assets such as equities being sold off. With the US – North Korean summit also about to begin and with nerves creeping in about how much distance the US and China still need to cover in order to secure a trade deal, investors are preferring to watch from the side-lines.
European stock markets are also nursing losses in early trading.
Concerns over China’s slowdown, and disappointment that the US-North Korea summit broke up without a deal, has created a cloud of gloom over the City.
“US talks with North Korea have broken up without a deal. South Korean shares fell sharply as the meeting broke up, with Asian shares broadly in the red. I don’t think this will ultimately have too much bearing on global indices in the longer term, but for now with hopes of a deal with China on trade not exactly fading, but certainly not rising, it’s 0 from 2 for Trump this week and risk sentiment is suffering as a result.
The combination of the lack of progress with North Korea and China will drag on equities and we might have to wait for a new catalyst to renew the bullish start to the year.
Asian stock have been hit by China’s weak factory data….and by the sudden break-up of the summit between Donald Trump and Kim Jung-un.
Hopes of a denuclearisation deal have been dashed, with Trump telling reporters that Kim had demanded all sanctions on North Korea were lifted. The US refused, as Kim wasn’t making enough concessions on dismantling its nuclear facilities.
See if you can spot where the joint press conference was cancelled in Korea’s stock index today pic.twitter.com/HSXQ62EkpX
On North Korea, Trump says: ‘it wasn’t a good thing to be signing anything’. Kim is ‘quite a guy’. ‘Sometimes you have to walk’ #TrumpKimSummit
Breakdown of Trump-Kim summit in Hanoi highlights limits of “best buddies” diplomacy. Best interpretation is that it is Reykjavik pre-INF treaty; more likely, North Koreans simply not ready to give up their extensive nuclear programme. It’s existential for them and Kim knows it
Commodity prices have been hit by the slump in Chinese exports, with copper and zinc both down around 0.6%.
Today’s Chinese factory data really is gloomy:
China’s economic slowdown is also hurting the UK.
British car exports to China plunged by over 70% in January compared to a year earlier, which (not surprisingly) is the biggest drop ever recorded. It confirms earlier reports of slowing demand for vehicles among Chinese consumers.
Iris Pang, Greater China economist at ING, fears that China’s factories will keep shrinking, unless Beijing and Washington reach a trade agreement.
“Unless the trade war truly turns into an extended truce, the weakening trend may not end quickly.
As such we expect March’s PMI to fall, too.”
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Chinese factories have suffering the swiftest drop in export orders since the financial crisis a decade ago, fuelling concerns that the country’s economy has weakened.
China Feb NBS Mfg PMI -0.3 to 49.2, 3rd straight months below 50 and lowest level since March 2016.
New Export Orders 45.2, 9 months drop in a row and lowest level in 10 years! pic.twitter.com/CTvzEEqZm2
As if on cue more weak data poured out of China, pulling the Shanghai composite index lower. Factory activity in China contracted for a third straight month in February as export orders fell to the lowest level since the global crisis.
Further evidence of a slowdown in China hit risk sentiment, The realisation that there is still considerable work to be done for the US and China to reach a trade agreement, plus further evidence of economic activity in China slowing is leaving little for traders to cheer on Thursday.
Bracing myself for a deluge of UK corporate results this morning. And that’s before any unscheduled news