European and Asian markets rise after Wall Street hits record high as fears subside surrounding the trade dispute between China and the US
- Pound falls on renewed Brexit fears
- Fitch cuts global growth forecasts on trade war ‘reality’
- UK government borrowing jumps in August
- Uber in talks to buy Deliveroo, Bloomberg reports
- NatWest customers locked out of online accounts
The FTSE 100 is outperforming its main European peers, up 1% at 7,438.
But the FTSE’s gain is the pound’s loss. Sterling has lost further ground against both the dollar and the euro.
The pound came crashing down from Thursday’s highs as Friday went on, no longer able to ignore Theresa May’s Brexit faceplant in Salzburg.
The rather abrupt rejection of the infamous Chequers deal by the EU, alongside a brewing Tory rebellion in the UK, has sterling once again mulling over a potential ‘no deal’ Brexit, with the added seasoning of a potential Conservative leadership challenge at some point down the road.
Fitch has cut its forecast for global growth in 2019, blaming protectionist US polices and the trade war with China.
It now expects the global economy to grow by 3.1% next year, down from its June forecast of 3.2%. So not a huge downgrade, but a downgrade nonetheless.
The trade war is now a reality .
The recently announced imposition of US tariffs on a further $200 billion of imports from China will have a material impact on global growth and, even though we have now included the 25% tariff shock in our forecast baseline, the downside risks to our global growth forecasts have also increased.
Howard Archer, chief economic advisor to the forecasting group EY Item Club has an alternative view and thinks Philip Hammond might have increase borrowing if he is to fund an NHS spending increase.
Public sector borrowing came in at £6.8bn in August, £2.4bn higher than a year earlier. However, over the first five months of the fiscal year, borrowing was still £7.8bn lower than the same period of 2017-18.
There will be one, possibly two, more releases before the Office for Budget Responsibility finalises its forecasts for the Budget. Although borrowing continues to run well below 2017-18 levels, the fact that revenue growth is only running in line with its previous forecast and the likely temporary nature of the undershoot in spending means that major changes to the OBR’s projections are looking increasingly unlikely.
The UK’s deficit was higher than expected in August, but the government is still on track to meet its full year borrowing target of £37bn according to Andrew Wishart at Capital Economics.
Borrowing was higher than expected in August, marking the end of a run of strong figures. Despite the rise in borrowing in August, it is still on track to come in below the Office for Budget Responsibility’s (OBR’s) forecast over the fiscal year as a whole.
We remain content with our forecast for borrowing be £34bn in 2018/19, below the £37bn forecast by the OBR. And we think that the fiscal watchdog is likely to revise its forecast down in November, giving the chancellor room to deliver the promised increase in health expenditure without having to increase taxes or make cuts elsewhere.
HSBC has announced it will be taking down its banking app on Sunday morning to carry out “essential maintenance”.
With all the problems with the online services of UK banks – Barclays, Cashplus, Co-op Bank, RBS – HSBC has picked an interesting time to take its mobile banking app down. All we need now is for Lloyds to go down and it’s a straight flush of UK banks https://t.co/kCxg8anfXt
The government borrowed more than expected in August, after disappointing tax receipts, a boost to the state pension, and a contribution to the EU budget.
Figures published by the Office for National Statistics showed borrowing was £6.8bn over the month, £2.4bn more than August 2017 and double the £3.4bn forecast by City economists. Not great news for the chancellor, Philip Hammond, who will be thinking about spending options ahead of his autumn budget.
Worse-than-expected reading for the public finances – ahead of the autumn budget (date still yet to be announced…) https://t.co/gzGCcluoSU
In the latest technical glitch for UK high street banks, NatWest, RBS and Ulster bank customers are unable to access their bank accounts through the app and online this morning.
Hannah Maundrell, editor in chief of money.co.uk, says:
Frustrating times for Natwest customers this morning, especially ahead of the weekend. Banks really need to pull their socks up because this keeps happening again and again. It’s really not good enough when so many customers are being encouraged to bank online.
It’s worrying when your bank can’t keep on top of their IT systems – customers shouldn’t panic though – Natwest customers can still use telephone banking and they are trying to fix the issues, but if you’re worried about any of your payments being affected speak to Natwest ASAP.
The pound is under pressure this morning, hit by renewed fears that Britain will leave the EU without a deal.
Sterling is down 0.3% against the dollar at $1.3222, and down 0.3% against the euro at €1.1225.
Reports that Uber is in talks to buy Deliveroo have hurt food delivery rival firm Just Eat this morning.
Shares in Just Eat are down 5.8%, making it the second biggest faller on the FTSE 100 (after Smiths Group).
Uber is in early talks to buy food-delivery company Deliveroo for several billion dollars https://t.co/ecCW0BkxYp
Trading is underway in Europe and all major markets are up, following those record closes on Wall Street on Thursday.
NatWest is the latest bank to have problems with its online and mobile banking services.
The bank says this morning that it is “working hard” to fix the issues after customers complained.
We’re aware of some issues on our Online and Mobile Banking services and are working hard to fix them. Telephone Banking and ATMs are available. Sorry and thanks for your patience.
The ride-hailing service Uber is in early stage talks to buy the food delivery firm Deliveroo, according to a report by Bloomberg. Deliveroo competes with Uber Eats, Uber’s food delivery business.
A bid for London-based Deliveroo, last valued at more than $2 billion, would mark a major attempt by Uber to dominate the food-delivery business in Europe. An acquisition price is unknown. Any offer would need to be considerably above its latest valuation, according to people with direct knowledge of Deliveroo plans.
The talks could fall apart, in part because Deliveroo and its investors have been reluctant to relinquish independence, said the people, who asked not to be identified because the information is private. Spokesmen at Deliveroo and Uber declined to comment.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Asian markets have followed Wall Street higher today, as investor fears over a full-blown trade war between China and the US subsided.
The Dow Jones and S&P 500 hit all-time highs yesterday as fears surrounding the US-China trade standoff subsided. The tariffs that were announced by both sides during the week were deemed to be not as harsh as originally suspected.
The US in particular showed restraint, but that was partially so the Trump administration would have more ammunition should they feel it is required down the line. Now that the latest series of tariffs are out of the way, investors fell back into their bullish routine. Stock markets in Asia overnight were dragged higher by the positive move on Wall Street.
Link : Global markets shrug off trade war fears – business live