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/16/uk-unemployment-data-inflation-mark-carney-business-live
The article has changed 16 times. There is an RSS feed of changes available.
| Version 13 | Version 14 |
|---|---|
| UK wage growth at six-year high, Carney talks interest rates - as it happened | UK wage growth at six-year high, Carney talks interest rates - as it happened |
| (17 days later) | |
| 6.03pm BST | 6.03pm BST |
| 18:03 | 18:03 |
| Helena Smith | Helena Smith |
| Over in Greece bankers are saying that the quick formation of a new government will almost certainly lead to the relaxation of debilitating capital controls. Helena Smith reports from Athens: | Over in Greece bankers are saying that the quick formation of a new government will almost certainly lead to the relaxation of debilitating capital controls. Helena Smith reports from Athens: |
| Since the imposition of capital controls at the end of June, business activity has been brought almost to a grinding halt. Unable to pay suppliers, small and medium sized companies have been hardest hit with exports and imports not only severely curtailed but further exacerbating the country’s economic tailspin. Bank figures show that cash-starved smaller companies have often been forced to make more frequent imports at higher prices – the only way of circumventing the demand of suppliers overseas for large sums up front for merchandise | Since the imposition of capital controls at the end of June, business activity has been brought almost to a grinding halt. Unable to pay suppliers, small and medium sized companies have been hardest hit with exports and imports not only severely curtailed but further exacerbating the country’s economic tailspin. Bank figures show that cash-starved smaller companies have often been forced to make more frequent imports at higher prices – the only way of circumventing the demand of suppliers overseas for large sums up front for merchandise |
| But bankers are now saying restrictions are likely to be further relaxed – bank transactions abroad were relaxed earlier this month - if Greece moves fast to regain the trust it lost with its European partners (during fraught negotiations over its latest bailout) by forming a reform-minded government after Sunday’s elections. Six months of wrangling with creditors saw a bank run of around €40bn. | But bankers are now saying restrictions are likely to be further relaxed – bank transactions abroad were relaxed earlier this month - if Greece moves fast to regain the trust it lost with its European partners (during fraught negotiations over its latest bailout) by forming a reform-minded government after Sunday’s elections. Six months of wrangling with creditors saw a bank run of around €40bn. |
| “Once banks are recapitalized and deposits flow back, that will lessen dependence on the European Central Bank and make further lifting of the controls easier,’ said one banker. Withdrawals from ATMs – now controlled at €420 a week – may be among the restrictions to be lifted. | “Once banks are recapitalized and deposits flow back, that will lessen dependence on the European Central Bank and make further lifting of the controls easier,’ said one banker. Withdrawals from ATMs – now controlled at €420 a week – may be among the restrictions to be lifted. |
| But insiders cautioned against speculation that the controls would be entirely removed. “A lot will rest on the type of government that is put in place but even if it is ultimately a government of technocrats, restrictions will be with us for some time yet,” said the banker speaking on condition of anonymity. “Our big fear, central to the controls right now, is the outflow of deposits. Everyone worries that if we lift them altogether people will rush to take whatever they have out with everything that means for a system that is already fragile.” | But insiders cautioned against speculation that the controls would be entirely removed. “A lot will rest on the type of government that is put in place but even if it is ultimately a government of technocrats, restrictions will be with us for some time yet,” said the banker speaking on condition of anonymity. “Our big fear, central to the controls right now, is the outflow of deposits. Everyone worries that if we lift them altogether people will rush to take whatever they have out with everything that means for a system that is already fragile.” |
| On that note it’s time to close up for the evening. Thanks for all your comments, and we’ll be back tomorrow. | On that note it’s time to close up for the evening. Thanks for all your comments, and we’ll be back tomorrow. |
| Updated | Updated |
| at 6.06pm BST | at 6.06pm BST |
| 5.25pm BST | 5.25pm BST |
| 17:25 | 17:25 |
| Grexit "never for real" - ECB vice president | Grexit "never for real" - ECB vice president |
| The prospect of a Greek exit from the euro was “never for real”, according to Vítor Constâncio, vice-president of the European Central Bank in an interview this week with Thomson Reuters. Here is the relevant passage. Constâncio said: | The prospect of a Greek exit from the euro was “never for real”, according to Vítor Constâncio, vice-president of the European Central Bank in an interview this week with Thomson Reuters. Here is the relevant passage. Constâncio said: |
| We have growth again. We need to strengthen the confidence in peripheral countries. That has to be achieved by deepening integration. The Greek turmoil raised doubts. These doubts have to be now closed by additional institutional reforms. | We have growth again. We need to strengthen the confidence in peripheral countries. That has to be achieved by deepening integration. The Greek turmoil raised doubts. These doubts have to be now closed by additional institutional reforms. |
| Q. What doubts were raised about the euro? | Q. What doubts were raised about the euro? |
| It raised doubts for the markets that countries like Greece could cope with the challenges of monetary union. There was never any doubt among the majority of member countries. We maintain that the euro is irreversible. Legally, no country can be expelled. The actual prospect of that happening was never for real. | It raised doubts for the markets that countries like Greece could cope with the challenges of monetary union. There was never any doubt among the majority of member countries. We maintain that the euro is irreversible. Legally, no country can be expelled. The actual prospect of that happening was never for real. |
| One #ECB, two words Coeure (June): #Grexit "can unfortunately no longer be ruled out" Constancio (September): #Grexit "was never for real" | One #ECB, two words Coeure (June): #Grexit "can unfortunately no longer be ruled out" Constancio (September): #Grexit "was never for real" |
| Updated | Updated |
| at 5.26pm BST | at 5.26pm BST |
| 4.57pm BST | 4.57pm BST |
| 16:57 | 16:57 |
| European markets jump ahead of Fed meeting | European markets jump ahead of Fed meeting |
| Despite the continuing uncertainty about whether or not the Federal Reserve will raise rates on Thursday, investors were in fairly buoyant mood. The betting seems to be coming down on the side of no move - just about. Meanwhile news of a possible merger between drinks groups SABMiller and Anheuser-Busch InBev saw both companies share prices soar and give a lift to stock markets, notably the FTSE 100. Energy companies were also in demand as crude prices moved higher after an unexpected fall in weekly US inventory data. The final scores showed: | Despite the continuing uncertainty about whether or not the Federal Reserve will raise rates on Thursday, investors were in fairly buoyant mood. The betting seems to be coming down on the side of no move - just about. Meanwhile news of a possible merger between drinks groups SABMiller and Anheuser-Busch InBev saw both companies share prices soar and give a lift to stock markets, notably the FTSE 100. Energy companies were also in demand as crude prices moved higher after an unexpected fall in weekly US inventory data. The final scores showed: |
| On Wall Street, the Dow Jones Industrial Average is currently 92 points or 0.56% higher. | On Wall Street, the Dow Jones Industrial Average is currently 92 points or 0.56% higher. |
| 4.50pm BST | 4.50pm BST |
| 16:50 | 16:50 |
| Thursday’s Federal Reserve decision on interest rates is still too close to call, according to the latest Reuters poll. But the pendulum has swung slightly in favour of the central bank keeping borrowing costs on hold: | Thursday’s Federal Reserve decision on interest rates is still too close to call, according to the latest Reuters poll. But the pendulum has swung slightly in favour of the central bank keeping borrowing costs on hold: |
| 45 of 80 economists now calling no Fed move vs slight majority last wk for a hike. Nobody switched to predict a rise https://t.co/9KTGVjgbrX | 45 of 80 economists now calling no Fed move vs slight majority last wk for a hike. Nobody switched to predict a rise https://t.co/9KTGVjgbrX |
| 4.28pm BST | 4.28pm BST |
| 16:28 | 16:28 |
| Oil surges after US stocks data | Oil surges after US stocks data |
| Oil prices are surging after an unexpected fall in US crude stocks last week. | Oil prices are surging after an unexpected fall in US crude stocks last week. |
| Crude inventories fell by 2.1m barrels, according to the Energy Information Administration, compared to expectations of a rise of 1.2m barrels. | Crude inventories fell by 2.1m barrels, according to the Energy Information Administration, compared to expectations of a rise of 1.2m barrels. |
| The news has sent Brent crude nearly 5% higher to $50.10 a barrel, with West Texas also on the rise: | The news has sent Brent crude nearly 5% higher to $50.10 a barrel, with West Texas also on the rise: |
| Oil now surging 6% http://t.co/U3FGscb0V7 pic.twitter.com/j1b0vi0HCy | Oil now surging 6% http://t.co/U3FGscb0V7 pic.twitter.com/j1b0vi0HCy |
| 3.48pm BST | 3.48pm BST |
| 15:48 | 15:48 |
| Bank governor Mark Carney said that if wage growth moves about 3% and unit labour costs rise, then a decision on a rate hike comes into sharper relief. (A reminder that average pay rose by 2.9% in the three months to July.) | Bank governor Mark Carney said that if wage growth moves about 3% and unit labour costs rise, then a decision on a rate hike comes into sharper relief. (A reminder that average pay rose by 2.9% in the three months to July.) |
| If #UK economy grows above trend, has rising core inflation and wages above 3% then the decision on rates comes into sharper relief | If #UK economy grows above trend, has rising core inflation and wages above 3% then the decision on rates comes into sharper relief |
| #BOE Mark Carney says the "best collective judgement" of the rate-setting committee is that rates will rise in Q2, April to June next year | #BOE Mark Carney says the "best collective judgement" of the rate-setting committee is that rates will rise in Q2, April to June next year |
| Updated | Updated |
| at 3.49pm BST | at 3.49pm BST |
| 3.45pm BST | 3.45pm BST |
| 15:45 | 15:45 |
| MPC member Ian McCafferty, who voted for a rate rise last time round: | MPC member Ian McCafferty, who voted for a rate rise last time round: |
| @bankofengland McCafferty says UK manufacturing might be struggling but is only 10% of economy, so not a guide to it's health | @bankofengland McCafferty says UK manufacturing might be struggling but is only 10% of economy, so not a guide to it's health |
| 3.30pm BST | 3.30pm BST |
| 15:30 | 15:30 |
| More from the UK Treasury select committee quizzing Bank of England governor Mark Carney and members of the rate-setting monetary policy committee (Ian McCafferty, Kristin Forbes, and Martin Weale): | More from the UK Treasury select committee quizzing Bank of England governor Mark Carney and members of the rate-setting monetary policy committee (Ian McCafferty, Kristin Forbes, and Martin Weale): |
| @bankofengland Carney says UK growing above trend and will continue to over next few years. @OECD says 2.3% growth next year. Above trend? | @bankofengland Carney says UK growing above trend and will continue to over next few years. @OECD says 2.3% growth next year. Above trend? |
| @bankofengland Mark Carney sounds like recent China trip took its toll. Maybe a little bit of a cold and #sinus trouble | @bankofengland Mark Carney sounds like recent China trip took its toll. Maybe a little bit of a cold and #sinus trouble |
| BoE’s McCafferty: Could See Faster Pickup Than Expected In Wage Growth $GBPUSD | BoE’s McCafferty: Could See Faster Pickup Than Expected In Wage Growth $GBPUSD |
| BoE's McCafferty Is Concerned That Inflation Could 'Outpace' Projection $GBPUSD | BoE's McCafferty Is Concerned That Inflation Could 'Outpace' Projection $GBPUSD |
| BoE’s McCafferty Says Deflation Risks Are ‘Now Very Low’ $GBPUSD | BoE’s McCafferty Says Deflation Risks Are ‘Now Very Low’ $GBPUSD |
| Meanwhile the Bank has released reports to the committee from Mark Carney and Kirstin Forbes. | Meanwhile the Bank has released reports to the committee from Mark Carney and Kirstin Forbes. |
| 3.15pm BST | 3.15pm BST |
| 15:15 | 15:15 |
| Wall Street opens higher | Wall Street opens higher |
| Ahead of the all important Federal Reserve decision on interest rates, US markets have joined in the global rally, adding to Tuesday’s gains. | Ahead of the all important Federal Reserve decision on interest rates, US markets have joined in the global rally, adding to Tuesday’s gains. |
| In early trading the Dow Jones Industrial Average is up 29 points or 0.18%. Elsewhere the FTSE 100 is 1.32% higher - helped by the news of a possible merger between drinks groups SABMiller and Anheuser-Busch InBev - while Germany’s Dax is up 0.11%. | In early trading the Dow Jones Industrial Average is up 29 points or 0.18%. Elsewhere the FTSE 100 is 1.32% higher - helped by the news of a possible merger between drinks groups SABMiller and Anheuser-Busch InBev - while Germany’s Dax is up 0.11%. |
| 2.59pm BST | 2.59pm BST |
| 14:59 | 14:59 |
| The other MPC member at the Treasury Select Committee, Kristin Forbes, is also worried about volatility: | The other MPC member at the Treasury Select Committee, Kristin Forbes, is also worried about volatility: |
| @bankofengland Kristin Forbes says recent financial volatility played a part in her decision to vote against a rate rise | @bankofengland Kristin Forbes says recent financial volatility played a part in her decision to vote against a rate rise |
| 2.55pm BST | 2.55pm BST |
| 14:55 | 14:55 |
| UK rate rise timing clearer at turn of year - Carney | UK rate rise timing clearer at turn of year - Carney |
| Bank of England governor Mark Carney is up before the Treasury Select committee to discuss the latest inflation report. | Bank of England governor Mark Carney is up before the Treasury Select committee to discuss the latest inflation report. |
| On interest rates he said there was “a wide distribution of possible outcomes around any expected path for bank rate.” | On interest rates he said there was “a wide distribution of possible outcomes around any expected path for bank rate.” |
| He said the timing of a rate rise would be in sharper focus at the turn of the year. | He said the timing of a rate rise would be in sharper focus at the turn of the year. |
| One uncertainty of course has been the recent worries about the outlook for China’s economy. He said there was “downside risk” but not enough to adjust the Bank’s forecasts at the moment. | One uncertainty of course has been the recent worries about the outlook for China’s economy. He said there was “downside risk” but not enough to adjust the Bank’s forecasts at the moment. |
| Monetary Policy Committee member Ian McCafferty said he had moved from believing rates should remain on hold to believing they should rise because he was worried about the prospect for the inflation outlook, notwithstanding any international risks. | Monetary Policy Committee member Ian McCafferty said he had moved from believing rates should remain on hold to believing they should rise because he was worried about the prospect for the inflation outlook, notwithstanding any international risks. |
| But former hawk (although he criticised the term) Martin Weale said it was not appropriate for a rise because of the Chinese slowdown, further recent falls in oil and raw material prices and weak UK productivity. | But former hawk (although he criticised the term) Martin Weale said it was not appropriate for a rise because of the Chinese slowdown, further recent falls in oil and raw material prices and weak UK productivity. |
| 2.34pm BST | 2.34pm BST |
| 14:34 | 14:34 |
| The US inflation data is likely to add to the chances of the Federal Reserve keeping interest rates on hold on Thursday, said Har Bandholz, chief US economist at UniCredit Research. He said: | The US inflation data is likely to add to the chances of the Federal Reserve keeping interest rates on hold on Thursday, said Har Bandholz, chief US economist at UniCredit Research. He said: |
| Now that the last important economic data releases ahead of tomorrow’s FOMC decision is out, we know as much as before: | Now that the last important economic data releases ahead of tomorrow’s FOMC decision is out, we know as much as before: |
| The main growth engine of the US economy, the consumer, has been doing well – at least until before the financial market volatility began (we are confident that this improvement has continued and will continue, but the data for this period still has to be released). | The main growth engine of the US economy, the consumer, has been doing well – at least until before the financial market volatility began (we are confident that this improvement has continued and will continue, but the data for this period still has to be released). |
| The manufacturing sector, on the other hand, still suffers from global headwinds, the stronger US dollar, and – in the short-term –, from an inventory correction. Finally, inflation rates are currently held back by transitory factors. While the core CPI still stands at a relatively solid 1.8% year on year, it has lost some momentum since June, mostly due to the renewed decline in energy prices. | The manufacturing sector, on the other hand, still suffers from global headwinds, the stronger US dollar, and – in the short-term –, from an inventory correction. Finally, inflation rates are currently held back by transitory factors. While the core CPI still stands at a relatively solid 1.8% year on year, it has lost some momentum since June, mostly due to the renewed decline in energy prices. |
| Moreover, the Fed prefers to look at the Personal Consumption Expenditures deflator excluding food & energy, which has slowed in July to 1.2% year on year, the lowest since early 2011. | Moreover, the Fed prefers to look at the Personal Consumption Expenditures deflator excluding food & energy, which has slowed in July to 1.2% year on year, the lowest since early 2011. |
| We had pointed out before that this number is artificially biased downward by low health care costs, but FOMC members still seem to see it as their benchmark measure. Low inflation, in combination with the fact that the risk averse Fed would like to get a better sense about how the latest global developments – read: the slowdown in China, the related stock market sell-off and the renewed decline in oil prices – affect the outlook for growth and inflation, most likely mean that the FOMC will leave rates unchanged at this week’s meeting. | We had pointed out before that this number is artificially biased downward by low health care costs, but FOMC members still seem to see it as their benchmark measure. Low inflation, in combination with the fact that the risk averse Fed would like to get a better sense about how the latest global developments – read: the slowdown in China, the related stock market sell-off and the renewed decline in oil prices – affect the outlook for growth and inflation, most likely mean that the FOMC will leave rates unchanged at this week’s meeting. |
| 2.02pm BST | 2.02pm BST |
| 14:02 | 14:02 |
| The August US inflation figure will probably not change the Federal Reserve’s decision on interest rates, said Rob Carnell of ING Bank. He expects no change from the central bank although admits a small hike could be on the cards: | The August US inflation figure will probably not change the Federal Reserve’s decision on interest rates, said Rob Carnell of ING Bank. He expects no change from the central bank although admits a small hike could be on the cards: |
| US August CPI was the last significant piece of data standing between the Federal Open Market Committee and its rate decision on Thursday, and it came in almost bang on expectations, with the only marginal deviation from expectations being the core inflation rate, which was unchanged at 1.8% year on year - though from an expected 0.1% month on month gain, so almost certainly just a rounding effect. | US August CPI was the last significant piece of data standing between the Federal Open Market Committee and its rate decision on Thursday, and it came in almost bang on expectations, with the only marginal deviation from expectations being the core inflation rate, which was unchanged at 1.8% year on year - though from an expected 0.1% month on month gain, so almost certainly just a rounding effect. |
| Headline inflation was unchanged at 0.2% year on year, dragged down by a 2.0% month on month decline in energy prices – not surprisingly. | Headline inflation was unchanged at 0.2% year on year, dragged down by a 2.0% month on month decline in energy prices – not surprisingly. |
| his result doesn’t even give a directional boost to the hawks, which might have been the case if energy had dragged just a little less. That said, this was never likely to be a decisive piece of data, and the FOMC members will probably go into this meeting already with a good idea of what they want to do. Recent data will have played a minor role in that conclusion. Our base case remains no hike with a strong hint for October, but a small (less than 25 basis point hike) still looks like a strong call to us. | his result doesn’t even give a directional boost to the hawks, which might have been the case if energy had dragged just a little less. That said, this was never likely to be a decisive piece of data, and the FOMC members will probably go into this meeting already with a good idea of what they want to do. Recent data will have played a minor role in that conclusion. Our base case remains no hike with a strong hint for October, but a small (less than 25 basis point hike) still looks like a strong call to us. |
| 1.52pm BST | 1.52pm BST |
| 13:52 | 13:52 |
| Followers of the eurozone debt crisis should check out this story from Athens, on the worrying rise of Greece’s extremist Golden Dawn party, ahead of Sunday’s elections: | Followers of the eurozone debt crisis should check out this story from Athens, on the worrying rise of Greece’s extremist Golden Dawn party, ahead of Sunday’s elections: |
| Related: Greek election 2015: Golden Dawn exploits atmosphere of austerity-driven despair | Related: Greek election 2015: Golden Dawn exploits atmosphere of austerity-driven despair |