This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/business/live/2015/sep/15/chinese-stocks-fall-again-uk-inflation-markets-live

The article has changed 17 times. There is an RSS feed of changes available.

Version 15 Version 16
UK inflation rate hits zero; Greek election and Fed loom - as it happened UK inflation rate hits zero; Greek election and Fed loom - as it happened
(17 days later)
6.02pm BST6.02pm BST
18:0218:02
A day after the televised debate in Greece between Syriza’s Alexis Tsipras and New Democracy’s Vangelis Meimarakis, the latter has said he would seek a coalition with Syriza if it wins Sunday’s election. Newspaper Kathimerini reports:A day after the televised debate in Greece between Syriza’s Alexis Tsipras and New Democracy’s Vangelis Meimarakis, the latter has said he would seek a coalition with Syriza if it wins Sunday’s election. Newspaper Kathimerini reports:
“If New Democracy wins the elections, I will first meet with Alexis Tsipras to try to form a government,” Meimarakis said.“If New Democracy wins the elections, I will first meet with Alexis Tsipras to try to form a government,” Meimarakis said.
Questioned about potential alliances during Monday’s debate, Tsipras insisted that he believed Syriza would win an overall majority but that he would otherwise be prepared to form a “progressive” coalition. He ruled out an “unnatural” alliance with New Democracy, saying “We have radical differences on key issues.”Questioned about potential alliances during Monday’s debate, Tsipras insisted that he believed Syriza would win an overall majority but that he would otherwise be prepared to form a “progressive” coalition. He ruled out an “unnatural” alliance with New Democracy, saying “We have radical differences on key issues.”
On that note it’s time to close up for the evening. Thanks for all your comments, and we’ll be back tomorrow, counting down the hours until the Federal Reserve rate decision.On that note it’s time to close up for the evening. Thanks for all your comments, and we’ll be back tomorrow, counting down the hours until the Federal Reserve rate decision.
5.25pm BST5.25pm BST
17:2517:25
European markets move higher ahead of Fed meetingEuropean markets move higher ahead of Fed meeting
Despite another bad day on the Chinese stockmarket, European shares managed to gain some ground, spurred by a positive early performance by Wall Street. Traders said the prospect of a rate rise in the UK this year diminished after inflation came in at zero, while uninspiring data from the US seemed to suggest the Federal Reserve may well hold off on raising borrowing costs later this week. However another theory for the rise was that the uncertainty about what the Fed planned to do would be ended if it actually acted and raised rates. So the final scores showed:Despite another bad day on the Chinese stockmarket, European shares managed to gain some ground, spurred by a positive early performance by Wall Street. Traders said the prospect of a rate rise in the UK this year diminished after inflation came in at zero, while uninspiring data from the US seemed to suggest the Federal Reserve may well hold off on raising borrowing costs later this week. However another theory for the rise was that the uncertainty about what the Fed planned to do would be ended if it actually acted and raised rates. So the final scores showed:
On Wall Street the Dow Jones Industrial Average is currently 175 points or 1% higher.On Wall Street the Dow Jones Industrial Average is currently 175 points or 1% higher.
UpdatedUpdated
at 5.58pm BSTat 5.58pm BST
4.43pm BST4.43pm BST
16:4316:43
Markets may be moving higher today, but they are stuck in no-man’s land ahead of the US Federal Reserve meeting this week, says Chris Beauchamp, senior market analyst at IG:Markets may be moving higher today, but they are stuck in no-man’s land ahead of the US Federal Reserve meeting this week, says Chris Beauchamp, senior market analyst at IG:
Ahead of what looks like the most vital Fed meeting in years, the best thing for markets to do would be simply to sit still and wait for Thursday afternoon. With that being impossible, they have opted for the second choice, namely running around in circles.Ahead of what looks like the most vital Fed meeting in years, the best thing for markets to do would be simply to sit still and wait for Thursday afternoon. With that being impossible, they have opted for the second choice, namely running around in circles.
A near 150-point range on the FTSE 100 today looks relatively busy, but in fact the index remains stuck within the range that has dominated all September. This is not an environment for long-term decision making, indeed so much is riding on Thursday’s events the market has become even more short-sighted than normal. Nonetheless, the longer the FTSE 100 remains stuck below 6200, the more it seems that the next big move is down. Despite the recovery off the lows of August, the index remains stuck in a downtrend, with so far little sign of a sustained comeback.A near 150-point range on the FTSE 100 today looks relatively busy, but in fact the index remains stuck within the range that has dominated all September. This is not an environment for long-term decision making, indeed so much is riding on Thursday’s events the market has become even more short-sighted than normal. Nonetheless, the longer the FTSE 100 remains stuck below 6200, the more it seems that the next big move is down. Despite the recovery off the lows of August, the index remains stuck in a downtrend, with so far little sign of a sustained comeback.
4.40pm BST4.40pm BST
16:4016:40
Undecided voters are #Greece's third largest party right now, polls show. Their last-minute choice will decide Sunday's election outcome.Undecided voters are #Greece's third largest party right now, polls show. Their last-minute choice will decide Sunday's election outcome.
4.20pm BST4.20pm BST
16:2016:20
Back with Greece, and Syriza’s government programme is out (here in Greek), five days before the election.Back with Greece, and Syriza’s government programme is out (here in Greek), five days before the election.
UpdatedUpdated
at 4.21pm BSTat 4.21pm BST
4.12pm BST4.12pm BST
16:1216:12
Here’s an interesting little graphic from the World Economic Forum:Here’s an interesting little graphic from the World Economic Forum:
What the world would look like if countries were the size of their #stockmarkets http://t.co/If6oi7R8rh pic.twitter.com/Bco7RzcstcWhat the world would look like if countries were the size of their #stockmarkets http://t.co/If6oi7R8rh pic.twitter.com/Bco7Rzcstc
3.53pm BST3.53pm BST
15:5315:53
After Monday’s television debate in Greece between Syrza’s Alexis Tsipras and New Democracy’s Vangelis Meimarakis, comes a new ballot showing a marginal increase in support for the latter ahead of Sunday’s elections:After Monday’s television debate in Greece between Syrza’s Alexis Tsipras and New Democracy’s Vangelis Meimarakis, comes a new ballot showing a marginal increase in support for the latter ahead of Sunday’s elections:
Greece: ND-EPP lead over SYRIZA in latest poll (Data RC). Important because of 50 seats extra for strongest party in #vouli. #debateGreece: ND-EPP lead over SYRIZA in latest poll (Data RC). Important because of 50 seats extra for strongest party in #vouli. #debate
Greece, Data RC poll: ND-EPP: 33% ↑ SYRIZA-LEFT: 32% ↓ PASOK-S&D: 7% ↑ XA-NI: 7% ↑ KKE-NI: 6% Potami-S&D: 6% EK-ALDE: 3% ↑ LAE-NI: 3% ↑Greece, Data RC poll: ND-EPP: 33% ↑ SYRIZA-LEFT: 32% ↓ PASOK-S&D: 7% ↑ XA-NI: 7% ↑ KKE-NI: 6% Potami-S&D: 6% EK-ALDE: 3% ↑ LAE-NI: 3% ↑
3.36pm BST3.36pm BST
15:3615:36
Can't see NY Fed's Bill Dudley voting for a rate hike after those Empire Manufacturing numbers. #FOMCCan't see NY Fed's Bill Dudley voting for a rate hike after those Empire Manufacturing numbers. #FOMC
2.53pm BST2.53pm BST
14:5314:53
Wall Street has opened higher after the retail sales and industrial production data, but investors remains cautious ahead of the Fed meeting.Wall Street has opened higher after the retail sales and industrial production data, but investors remains cautious ahead of the Fed meeting.
The Dow Jones Industrial Average is up 36 points or 0.24% in early trading, while European markets are also heading in the right direction, with the FTSE 100 up 0.3%, Germany’s Dax 0.26% higher and France’s Cac 0.54% better.The Dow Jones Industrial Average is up 36 points or 0.24% in early trading, while European markets are also heading in the right direction, with the FTSE 100 up 0.3%, Germany’s Dax 0.26% higher and France’s Cac 0.54% better.
2.41pm BST2.41pm BST
14:4114:41
Another piece of weak US data, with industrial production falling 0.4% in August, adding to the evidence against a Federal Reserve rate rise.Another piece of weak US data, with industrial production falling 0.4% in August, adding to the evidence against a Federal Reserve rate rise.
This compares to forecasts of a 0.2% decline, and a 0.9% rise in July. Rob Carnell at ING Bank said:This compares to forecasts of a 0.2% decline, and a 0.9% rise in July. Rob Carnell at ING Bank said:
US August industrial production was even softer than consensus expectations, falling 0.4% month on month, with manufacturing down 0.5% month on month (consensus = -0.3%).US August industrial production was even softer than consensus expectations, falling 0.4% month on month, with manufacturing down 0.5% month on month (consensus = -0.3%).
Much of the weakness was in the vehicles sector, and when this is stripped out, production was flat on the month - still not great however, and this ex-vehicles segment has been flat, down or very weak for months now. If there are any bright spots, it is in utilities, which rose 0.6%, though mining put in another fall of 0.6%.Much of the weakness was in the vehicles sector, and when this is stripped out, production was flat on the month - still not great however, and this ex-vehicles segment has been flat, down or very weak for months now. If there are any bright spots, it is in utilities, which rose 0.6%, though mining put in another fall of 0.6%.
All in all, weak, disappointing, and taken together with other data earlier today - retail sales and Empire manufacturing, nudges the argument in the direction of the FOMC doves. With only consumer price inflation left to come before the September 17 meeting, and that likely to be on the low side, the data dependent Federal Open Market Committee might find the pendulum swinging a little more to the “no hike” side.All in all, weak, disappointing, and taken together with other data earlier today - retail sales and Empire manufacturing, nudges the argument in the direction of the FOMC doves. With only consumer price inflation left to come before the September 17 meeting, and that likely to be on the low side, the data dependent Federal Open Market Committee might find the pendulum swinging a little more to the “no hike” side.
2.27pm BST
14:27
A no change from the Fed is not a universal opinion however.
Harley Bassman at investment group Pimco argues that the uncertainty of waiting for the Fed to raise rates is worse than the central bank actually lifting them slightly:
There are likely few market watchers who think that a 0.25% hike would have any real economic impact. (In fact, even a 1.0% funds rate would barely affect most businesses’ decision making processes since many commercial loans have a 1.0% floor.) Moreover, it is also clear that the U.S. economy has reached the limits of monetary policy stimulus.
What is unknown is the degree to which “animal spirits” are diminished by the endless drama of guessing when the Fed will finally start hiking.
Think about it: A 0% interest rate likely has little positive value and a 0.25% higher rate has little negative value, but the uncertainty, the anxiety of not hiking is significantly bothersome to all as this topic absorbs all the oxygen in the room – frankly, Hamlet debated less.
The full post is here:
Note to the Fed: Don’t Be Hamlet
2.18pm BST
14:18
Deutsche Bank’s chief US economist also cannot really see the Fed raising rates:
It is very hard to see a dovish #FOMC raising #Fed funds rate in an environment of skittish household and business confidence
2.06pm BST
14:06
The US retail sales figures are among the last significant pieces of economic data before the Federal Reserve meets to decide whether or not to raise interest rates. The decision seems finely poised, with the recent volatility in China seen as a good reason for the Fed to hold off, at least temporarily.
As for the retail sales themselves, Rob Carnell at ING Bank reckons they will not be the evidence that finally decides the Fed to lift borrowing costs:
Though the figures, once adjusted for prior revisions, are roughly in line with consensus, this comes across as a fairly ordinary result, not one that will encourage any wavering [Fed] doves to switch their vote to a September hike.
...This would be a more convincing set of figures if one did not have to exclude all the weak parts to make the number look strong, and we don’t think the [Fed] members will be substantially moved by this data.
Separately, the latest Empire manufacturing survey for the New York region continued to languish at -14.67 only marginally improved from -14.92. Today’s data tally in total is at best neutral for the September Federal Open Market Committee, and probably a slight negative overall.
Updated
at 2.42pm BST
1.50pm BST
13:50
The US retail sales figures for August are out. And while they’re a little weaker than expected, they show that consumers are still spending.
Retail sales rose by 0.2% last month, the Commerce Department reports, missing forecasts of a 0.3% rise.
They were dragged down by lower spending at the pumps. Retail sales excluding gasoline rose by 0.4%.
BREAKING: US retail sales up 0.2% in Aug vs 0.3% increase expected http://t.co/h5p4IgiSLn
Updated
at 1.54pm BST
1.34pm BST
13:34
Greece election: Polarisation wins the debate
Helena Smith
Over in Athens the talk of the town today ahead of Sunday’s general elections is all about last night’s debate between the two men now battling for the post of prime minister.
Our correspondent Helena Smith reports:
Who emerged victorious? Five days before potentially decisive polls for the country’s future, that is the question pundits and much of the Greek media are asking today.
Was it the leftist former prime minister Alexis Tsipras? Or was it Vangelis Meimarakis, the political veteran who has been the surprise winner of these elections so far, unexpectedly leading the pro-business, pro-European New Democracy to within a whisper of Syriza in the polls. Or even the debate itself? A debate that will go down as the tenth to be conducted before a poll, and this time in a way that allowed the protagonists to spar with each other openly (not literally, alas - Ed).
A good part of the media this morning unaminously agreed that it was polarisation – the inability of either the left or right to bridge differences enough to agree on anything substantial.
“The top televised debate rolled with zero consensus between Tsipras and Meimarakis,” Ta Nea proclaimed under the front-page headline “polarisation won.”
“The two political leaders insisted on [maintaining] a line of polarisation despite mention of consensus and collaboration, with the aim of rallying voters in the last stretch to elections.”
In that sense neither won – despite expections that the two-hour chin wag would sway the undecided (at 10% of the electorate, they will ultimately decide the outcome). When taken to task over implementation of the reforms set as the condition for a third EU backed bailout programme, both agreed they would enforce it – postehaste.
If anything, the debate marked the defeat of the anti-bailout front.
But analysts also agreed that in terms of polished performance Tsipras came out on top. “In substance Meimarakis [won], but visually Tsipras was a rock star,” said Dimitris Kerides, who teaches international politics at Panteion University.
Aristides Hatzis, professor of economics and law at Athens University concurred. “I think Tsipras emerged the winner. He unashamedly gave new promises and underplayed his compromises and especially his failures,” he told me, adding:
“Meimarakis put on an OK performance but he looked more uncomfortable especially when it came to criticising his own party.”
Whether Tsipras will be able to win over the young – appalled by the volte-face he has made embracing ‘neo-liberal’ policies – remains to be seen – and the young, along with women, account for most of those who remain undecided and have vowed to abstain from Sunday’s ballot.
Updated
at 4.05pm BST
12.56pm BST
12:56
French economists are manning the barricades today, protesting about the decision to appoint François Villeroy de Galhau as the next head of the Bank of France.
Around 150 of France’s finest economic experts have signed a letter arguing that Villeroy de Galhau is unsuitable as he served as co-chief operating officer of BNP Paribas until May.
In the letter, published in Le Monde today, they argue that this creates a serious conflict of interest. President François Hollande could and should have picked someone else.
“It’s not as if the president did not have a choice. It was entirely possible to promote, at the heart of the Bank of France, an internal candidate who is much less exposed to the risk of conflicts of interests.”
European Central Bank official Benoit Coeure was one option, although that would have deprived ECB president Mario Draghi of a key ally.
Draghi, incidentally, worked for Goldman Sachs before becoming Italy’s central bank chief in 2005. Mark Carney, the Bank of England’s governor, is also a Goldmanite. So Villeroy de Galhau won’t be treading a new path when he replaces Christian Noyer in November. But still, it’s an uncomfortable development.
12.41pm BST
12:41
We have a couple of pieces of eurozone data to flag up too.
Employment across the single currency bloc rose by 0.3% in the last quarter, as the region’s slow recovery continues.
Employment rose in 22 EU countries, and fell in just four, according to Eurostat.
Euro area employment +0.3% in Q2 2015, +0.8% compared with Q2 2014 #Eurostat http://t.co/2yfvanqWmd pic.twitter.com/sBHIb8Mq9D
However, confidence across German investors has shrunk sharply this month.
The ZEW future expectations index slid form 25 in August to 12.1 in September, suggesting pessimism is gripping Europe’s largest economy.
German Investor Confidence Damped by Weaker Emerging Markets http://t.co/5ygzMFPdoy pic.twitter.com/iw4Mjt3NK6
Updated
at 12.47pm BST
12.20pm BST
12:20
Summary: Fuel pulls UK inflation down to zero
Over to my colleague Katie Allen to round-up today’s inflation data:
Sharp falls in petrol and diesel pulled UK inflation back down to zero last month as tumbling crude oil prices trickled down to households.
Official figures showed inflation on the consumer prices index edged back down to 0.0% in August from 0.1% in July, continuing the trend since the start of this year of virtually no year-on-year rise in living costs. Inflation has been below the Bank of England’s 2% target for the past 20 months.
Economists said the lack of inflation would continue to boost consumer spending, the main driver of economic growth in the UK.
“This period of noflation or lowflation – whatever you want to call it – has undoubtedly been good news for the UK. The falling price of essentials has come at the same time as a rapid acceleration in wage growth since the start of the year, boosting discretionary spending power,” said Scott Corfe at the Centre for Economics and Business Research thinktank.
The headline figure was in line with the consensus forecast in a poll of economists by Reuters. But some had been expecting cheaper fuel to nudge inflation down to -0.1% or even -0.2% , marking a return to the negative territory hit in April this year when prices fell for the first time in more than 50 years.
As a result, the pound strengthened against the dollar after the data, as some traders wagered it left the door open for the Bank of England to start raising interest rates after more than six years at a record low of 0.5%......
Here’s her full story:
Related: Fuel price plunge pulls UK inflation back to 0%
11.49am BST
11:49
Here’s a handy colour-coded graph showing how UK inflation has fluctuated since the financial crisis began:
0% inflation in the UK in August. Food, transport and more recently clothing have helped drag it down. pic.twitter.com/X8vejuEekc
11.37am BST
11:37
The cost of oil and metals has fallen through the summer, as concerns has grown over China’s economic slowdown.
And for that reason, Ranko Berich of City firm Monex Europe fears UK inflation could fall further, especially if the global economy worsens.
He argues:
“The downside risks to inflation are now mounting, with the latest falls in commodity prices adding more volatility to the global economy. The general consensus at the Bank is that energy prices will at least stabilise, so if crude oil prices take another hit the UK economy could be in for a bumpy ride.
With this report showing no sign of labour market gains filtering through to higher consumer prices, the Bank of England’s extreme caution around rates now seems entirely justified.”