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Volkswagen admits emissions scandal could affect 11m vehicles - live updates Volkswagen admits emissions scandal could affect 11m vehicles - live updates
(35 minutes later)
1.19pm BST13:19
Volkswagen’s denial is short and to the point.
Over to Reuters:
Volkswagen denied a media report that said Chief Executive Martin Winterkorn was to be replaced amid an emissions scandal that has rocked the company.
“Nonsense,” a spokesman at the company’s headquarters in Wolfsburg said on Tuesday when asked whether the report byGerman Tagesspiegel was true.
1.16pm BST13:16
The UK government is pushing for a full European inquiry into vehicle emissions, reports the BBC’s business editor Kamal Ahmed.
Breaking: am being told Department for Transport to demand a European Commission EU-wide inquiry in VW emissions scandal
1.08pm BST13:08
A Volkswagen spokesperson has denied that CEO Martin Winterkorn is about to be replaced by Porsche’s Matthias Müller.
Volkswagen spokesman says they reports that CEO is to replaced with Porsche CEO Mueller are ridiculous: Rtrs
1.00pm BST13:00
German media: VW boss to be replaced on Friday
German newspaper Tagesspiegel is reporting that Volkswagen boss Martin Winterkorn will be replaced at Friday’s board meeting.
Their sources say he will be succeeded by Porsche CEO Matthias Müller, with Winterkorn paying the price for VW using illicit software to trick regulators.
Here’s their story.
From Agencies: Volkswagen CEO Winterkorn To Be Replaced By Porsche CEO Mueller
NEWSFLASH - Vw Ceo Winterkorn To Be Replaced By Matthias Mueller Reports
12.46pm BST12:4612.46pm BST12:46
Speculation is growing that this scandal could potentially bring down Volkswagen’s CEO, Martin Winterkorn.Speculation is growing that this scandal could potentially bring down Volkswagen’s CEO, Martin Winterkorn.
Volkswagen board is due to meet on Friday will decide whether to extend Winterkorn’s contract until end-2018.Volkswagen board is due to meet on Friday will decide whether to extend Winterkorn’s contract until end-2018.
Supervisory board member Olaf Lies told German radio station Deutschlandfunk on Tuesday that:Supervisory board member Olaf Lies told German radio station Deutschlandfunk on Tuesday that:
“I am sure that there will be personnel consequences in the end, there is no question about it”.“I am sure that there will be personnel consequences in the end, there is no question about it”.
German press reporting #Volkswagen CEO Winterkorn to be replaced this Friday. $VOW ROGerman press reporting #Volkswagen CEO Winterkorn to be replaced this Friday. $VOW RO
12.38pm BST12:3812.38pm BST12:38
Volkswagen’s shares are slumping because there is no precedent for such a scandal, says Peter Garnry, head of equity strategy at Saxo Bank.Volkswagen’s shares are slumping because there is no precedent for such a scandal, says Peter Garnry, head of equity strategy at Saxo Bank.
Emissions rigging is a new area, so investors don’t know how badly VW could be penalised. It’s not like a financial scandal, where there’s a well-trodden path to the regulators’ door.Emissions rigging is a new area, so investors don’t know how badly VW could be penalised. It’s not like a financial scandal, where there’s a well-trodden path to the regulators’ door.
Garnry says:Garnry says:
If an automaker violates the Clean Air Act it costs $37,500 per vehicle. Given the number of diesel cars sold [in the US] , this brings the potential fine to $20 billion. However news out this morning states that other governments such as Australia will now look into the matter and see if their emission standards have been violated by Volkswagen.If an automaker violates the Clean Air Act it costs $37,500 per vehicle. Given the number of diesel cars sold [in the US] , this brings the potential fine to $20 billion. However news out this morning states that other governments such as Australia will now look into the matter and see if their emission standards have been violated by Volkswagen.
In plain language, this may not be an isolated case so the tail risk is just much bigger.In plain language, this may not be an isolated case so the tail risk is just much bigger.
In the worst-case scenario, Volkswagen will be banned from selling diesel vehicles in the US for a certain period such as [French bank] BNP Paribas was banned from conducting certain US dollar transactions for a year, on top of a $9 billion fine due to the French bank’s involvement in helping Sudan, Cuba and Iran perform said transactions.In the worst-case scenario, Volkswagen will be banned from selling diesel vehicles in the US for a certain period such as [French bank] BNP Paribas was banned from conducting certain US dollar transactions for a year, on top of a $9 billion fine due to the French bank’s involvement in helping Sudan, Cuba and Iran perform said transactions.
12.26pm BST12:2612.26pm BST12:26
Shares in the major European carmakers have all fallen today.Shares in the major European carmakers have all fallen today.
VW is leading the fallers on the German DAX index, followed by Daimler and BMW.VW is leading the fallers on the German DAX index, followed by Daimler and BMW.
In France, Peugeot and Renault are among the biggest fallers on the Paris market, after finance minister Michel Sapin called for a Europe-wide investigation.In France, Peugeot and Renault are among the biggest fallers on the Paris market, after finance minister Michel Sapin called for a Europe-wide investigation.
Updated at 12.28pm BSTUpdated at 12.28pm BST
12.13pm BST12:1312.13pm BST12:13
Volkswagen: 11m cars affected worldwideVolkswagen: 11m cars affected worldwide
Volkswagen has revealed for the first time today that 11 million vehicles were fitted with software that tricked regulators into under-recording noxious emissions.Volkswagen has revealed for the first time today that 11 million vehicles were fitted with software that tricked regulators into under-recording noxious emissions.
Before today, VW has admitted to fitting half a million diesel cars with the code -- something the FT called a ‘monumental blunder’.Before today, VW has admitted to fitting half a million diesel cars with the code -- something the FT called a ‘monumental blunder’.
But VW has now explained that the code has been installed in other vehicles. And that means 11 million cars with its Type EA 189 engines would show false emission rates when tested.But VW has now explained that the code has been installed in other vehicles. And that means 11 million cars with its Type EA 189 engines would show false emission rates when tested.
Here’s the key part of the statement:Here’s the key part of the statement:
Further internal investigations conducted to date have established that the relevant engine management software is also installed in other Volkswagen Group vehicles with diesel engines. For the majority of these engines the software does not have any effect.Further internal investigations conducted to date have established that the relevant engine management software is also installed in other Volkswagen Group vehicles with diesel engines. For the majority of these engines the software does not have any effect.
Discrepancies relate to vehicles with Type EA 189 engines, involving some eleven million vehicles worldwide. A noticeable deviation between bench test results and actual road use was established solely for this type of engine. Volkswagen is working intensely to eliminate these deviations through technical measures.Discrepancies relate to vehicles with Type EA 189 engines, involving some eleven million vehicles worldwide. A noticeable deviation between bench test results and actual road use was established solely for this type of engine. Volkswagen is working intensely to eliminate these deviations through technical measures.
You can read the full statement hereYou can read the full statement here
Updated at 12.17pm BSTUpdated at 12.17pm BST
12.02pm BST12:0212.02pm BST12:02
The Economist argues that Volkswagen was already struggling, before being shunted by the revelations surrounding emission tests.The Economist argues that Volkswagen was already struggling, before being shunted by the revelations surrounding emission tests.
Investors have also been spooked by its other problems, which the latest scandal have made worse, it says:Investors have also been spooked by its other problems, which the latest scandal have made worse, it says:
VW has been aiming to build more than 10m cars a year, in order to take advantage of the big economies of scale that exist in the industry. But its efforts to grow appear to have faltered. Its market share in America—which at 2.2% last year is less than Subaru’s—is now shrinking, along with its turnover in China.VW has been aiming to build more than 10m cars a year, in order to take advantage of the big economies of scale that exist in the industry. But its efforts to grow appear to have faltered. Its market share in America—which at 2.2% last year is less than Subaru’s—is now shrinking, along with its turnover in China.
Even the sales it is making are not particularly profitable.Even the sales it is making are not particularly profitable.
Most of its profits are now made by non-VW brands, with margins on its Audis more than six times higher per vehicle than its VW-badged ones. And there may be more trouble left in the wings. Experts say that the recall of 500,000 cars sold in America as a result of cheating the emissions test may grow in size in the weeks and months to come.Most of its profits are now made by non-VW brands, with margins on its Audis more than six times higher per vehicle than its VW-badged ones. And there may be more trouble left in the wings. Experts say that the recall of 500,000 cars sold in America as a result of cheating the emissions test may grow in size in the weeks and months to come.
Why Volkswagen's share price has fallen by another 23% this morning http://t.co/LikeAtUZBm pic.twitter.com/RxnOSSmaEbWhy Volkswagen's share price has fallen by another 23% this morning http://t.co/LikeAtUZBm pic.twitter.com/RxnOSSmaEb
11.58am BST11:5811.58am BST11:58
A string of commentators are suggesting that the emissions scandal could be the auto equivalent of the interest rate-fixing perpetrated by the banking sector.A string of commentators are suggesting that the emissions scandal could be the auto equivalent of the interest rate-fixing perpetrated by the banking sector.
.@OlafStorbeck "This has the potential to be the Automotive industry's #Libor" #Volkswagen.@OlafStorbeck "This has the potential to be the Automotive industry's #Libor" #Volkswagen
VW emissions test crisis could end up as the car industry's LIBOR scandal. Expect this one to run and run. Tesla must be pleased?VW emissions test crisis could end up as the car industry's LIBOR scandal. Expect this one to run and run. Tesla must be pleased?
Many of our largest banks were fined billions of dollars each for their role in fixing Libor - the official measure of borrowing costs between banks.Many of our largest banks were fined billions of dollars each for their role in fixing Libor - the official measure of borrowing costs between banks.
11.47am BST11:4711.47am BST11:47
The cost of insuring Volkswagen’s corporate debt against default has jumped this today.The cost of insuring Volkswagen’s corporate debt against default has jumped this today.
That indicates concerns that the scandal could cause extremely serious damage:That indicates concerns that the scandal could cause extremely serious damage:
This ‘annotated’ chart from fastFT shows how the cost of VW credit default swaps has jumped. They would pay out if the carmaker defaulted.This ‘annotated’ chart from fastFT shows how the cost of VW credit default swaps has jumped. They would pay out if the carmaker defaulted.
Left left hard left formation, VW CDS. http://t.co/bMPa55PXq3 pic.twitter.com/3HzlcKJZZ9Left left hard left formation, VW CDS. http://t.co/bMPa55PXq3 pic.twitter.com/3HzlcKJZZ9
Updated at 11.47am BSTUpdated at 11.47am BST
11.45am BST11:4511.45am BST11:45
The Society of Motor Manufacturers and Traders (SMMT) has insisted there was no evidence that manufacturers in the UK attempt to mislead emission testers.The Society of Motor Manufacturers and Traders (SMMT) has insisted there was no evidence that manufacturers in the UK attempt to mislead emission testers.
The trade association’s chief executive, Mike Hawes, said (via PA).The trade association’s chief executive, Mike Hawes, said (via PA).
The EU operates a fundamentally different system to the US - with all European tests performed in strict conditions as required by EU law and witnessed by a government-appointed independent approval agency.The EU operates a fundamentally different system to the US - with all European tests performed in strict conditions as required by EU law and witnessed by a government-appointed independent approval agency.
“There is no evidence that manufacturers cheat the cycle. Vehicles are removed from the production line randomly and must be standard production models, certified by the relevant authority - the UK body being the Vehicle Certification Agency, which is responsible to the Department for Transport.“There is no evidence that manufacturers cheat the cycle. Vehicles are removed from the production line randomly and must be standard production models, certified by the relevant authority - the UK body being the Vehicle Certification Agency, which is responsible to the Department for Transport.
Hawes also conceded that the current test method is “outdated” - echoing MEP Catherine Bearder’s concerns (see earlier)Hawes also conceded that the current test method is “outdated” - echoing MEP Catherine Bearder’s concerns (see earlier)
11.40am BST11:4011.40am BST11:40
Updated at 11.40am BSTUpdated at 11.40am BST
11.35am BST11:3511.35am BST11:35
By my reckoning, around €28bn has been wiped off the value of Volkswagen this week.By my reckoning, around €28bn has been wiped off the value of Volkswagen this week.
Shares were trading at €162 each on Friday afternoon, valuing the company at €78.5bn.Shares were trading at €162 each on Friday afternoon, valuing the company at €78.5bn.
They have now slumped as low as €101.5 meaning VW is now worth under just €50bn.They have now slumped as low as €101.5 meaning VW is now worth under just €50bn.
Updated at 11.40am BSTUpdated at 11.40am BST
11.31am BST11:3111.31am BST11:31
Could diesel cars be recalled?Could diesel cars be recalled?
Campaign group Transport & Environment (T&E) has warned that millions of diesel cars could be recalled, if the practice of fiddling emission tests is widespread.Campaign group Transport & Environment (T&E) has warned that millions of diesel cars could be recalled, if the practice of fiddling emission tests is widespread.
T&E’s diesel expert Jos Dings has called for EU regulators to “take their job seriously”, and examine if cars on the road are pumping out more harmful emissions than is tolerable.T&E’s diesel expert Jos Dings has called for EU regulators to “take their job seriously”, and examine if cars on the road are pumping out more harmful emissions than is tolerable.
I’ve taken the quotes from the Press Association:I’ve taken the quotes from the Press Association:
All the evidence points to exactly the same thing going on in Europe and potentially even worse.All the evidence points to exactly the same thing going on in Europe and potentially even worse.
“Diesel cars in Europe operate with worse technology on average than the US.“Diesel cars in Europe operate with worse technology on average than the US.
“We are the diesel market but they have dug it up because they take law enforcement seriously.”“We are the diesel market but they have dug it up because they take law enforcement seriously.”
T&E has claimed that other carmakers also used technology that means diesel cars release fewer smog-causing pollutants during tests than in real-world driving conditions.T&E has claimed that other carmakers also used technology that means diesel cars release fewer smog-causing pollutants during tests than in real-world driving conditions.
No other manufacturer has come forward and confirmed this, though.No other manufacturer has come forward and confirmed this, though.
Updated at 11.35am BSTUpdated at 11.35am BST
11.23am BST11:2311.23am BST11:23
The escalating crisis at Volkswagen is sending shivers through the Frankfurt stock market, where the DAX index has lost 2.7%.The escalating crisis at Volkswagen is sending shivers through the Frankfurt stock market, where the DAX index has lost 2.7%.
The scandal risks denting the reputation of Germany’s manufacturing sector, warns political writer Andrew Lilico.The scandal risks denting the reputation of Germany’s manufacturing sector, warns political writer Andrew Lilico.
This VW thing cld damage the whole German manufacturing brand. It's potentially a kind of DasLIBOR.This VW thing cld damage the whole German manufacturing brand. It's potentially a kind of DasLIBOR.
11.17am BST11:1711.17am BST11:17
Liberal Democrat MEP Catherine Bearder has warned that European regulators are failing to enforce emission standards.Liberal Democrat MEP Catherine Bearder has warned that European regulators are failing to enforce emission standards.
Bearder says:Bearder says:
“Manufacturers in the US have been caught out, but we know that pollution limits are also being breached in Europe.“Manufacturers in the US have been caught out, but we know that pollution limits are also being breached in Europe.
“We need to tighten EU emission standards and make sure they are properly enforced. Unless we take action, thousands of lives will continue to be tragically cut short by air pollution.”“We need to tighten EU emission standards and make sure they are properly enforced. Unless we take action, thousands of lives will continue to be tragically cut short by air pollution.”
11.12am BST11:1211.12am BST11:12
VW: 11 million cars affected.VW: 11 million cars affected.
Volkswagen has also revealed that around 11 million diesel vehicles worldwide were fitted with the software at the centre of the US emissions scandal.Volkswagen has also revealed that around 11 million diesel vehicles worldwide were fitted with the software at the centre of the US emissions scandal.
It also pledged to work “intensely to eliminate these deviations through technical measures.”It also pledged to work “intensely to eliminate these deviations through technical measures.”
Updated at 11.14am BSTUpdated at 11.14am BST
11.02am BST11:0211.02am BST11:02
Wow. VW shares have crashed by another 20% today, as traders digest this profits warning.Wow. VW shares have crashed by another 20% today, as traders digest this profits warning.
An iconic German brand: -20.1% pic.twitter.com/SJKAvN6njDAn iconic German brand: -20.1% pic.twitter.com/SJKAvN6njD
Updated at 11.04am BSTUpdated at 11.04am BST
10.55am BST10:5510.55am BST10:55
Volkswagen issues profit warning, shares hammeredVolkswagen issues profit warning, shares hammered
Breaking news: Volkswagen has just announced that it will set aside €6.5bn to cover the costs of the investigation into how its diesel cars cheated emission tests, sending its shares slumping.Breaking news: Volkswagen has just announced that it will set aside €6.5bn to cover the costs of the investigation into how its diesel cars cheated emission tests, sending its shares slumping.
The move will make a significant hit in its earnings this quarter, as the German carmaker wrestles with the impact of the scandal.The move will make a significant hit in its earnings this quarter, as the German carmaker wrestles with the impact of the scandal.
In a statement, the German carmaker says that it will not tolerate any legal violation, and is committed to winning back customers’ lost trustIn a statement, the German carmaker says that it will not tolerate any legal violation, and is committed to winning back customers’ lost trust
And it also warns that that the €6.5bn could be revised, as the investigation continues.And it also warns that that the €6.5bn could be revised, as the investigation continues.
BREAKING: #Volkswagen sets aside €6.5 billion ($7.3 billion) to pay for emissions crisis http://t.co/PlNPWciAZVBREAKING: #Volkswagen sets aside €6.5 billion ($7.3 billion) to pay for emissions crisis http://t.co/PlNPWciAZV
VW shares have crashed by 10% today, on top of yesterday’s 20% slump.VW shares have crashed by 10% today, on top of yesterday’s 20% slump.
#Volkswagen shares down by almost 10% as company to set aside €6.5bn provision in 3Q for Diesel remedies. pic.twitter.com/XcS2UFbHFN#Volkswagen shares down by almost 10% as company to set aside €6.5bn provision in 3Q for Diesel remedies. pic.twitter.com/XcS2UFbHFN
It’s another dramatic day for Volkswagen, with its US boss admitting the company “totally screwed up” (video).It’s another dramatic day for Volkswagen, with its US boss admitting the company “totally screwed up” (video).
And with France’s finance minister calling for a EU-wide inquiry, the crisis could escalate.And with France’s finance minister calling for a EU-wide inquiry, the crisis could escalate.
10.35am BST10:3510.35am BST10:35
Over in Greece, state run TV has just announced that prime minister Alexis Tsipras’ new cabinet will be sworn in Wednesday morning, our correspondent Helena Smith reports.Over in Greece, state run TV has just announced that prime minister Alexis Tsipras’ new cabinet will be sworn in Wednesday morning, our correspondent Helena Smith reports.
10.33am BST10:3310.33am BST10:33
Being Greece’s finance minister is one of the roughest jobs in European politics, so we can’t blame Euclid Tsakalotos if he turns it down....Being Greece’s finance minister is one of the roughest jobs in European politics, so we can’t blame Euclid Tsakalotos if he turns it down....
No wonder Tsakalotos is reluctant. He probaly lost 10 yrs of his life trying to close deal for #Greece http://t.co/5wsHkc2iAg via @ReutersUKNo wonder Tsakalotos is reluctant. He probaly lost 10 yrs of his life trying to close deal for #Greece http://t.co/5wsHkc2iAg via @ReutersUK
10.30am BST10:3010.30am BST10:30
Greek media are reporting that Euclid Tsakalotos, is reluctant to become finance minister again.Greek media are reporting that Euclid Tsakalotos, is reluctant to become finance minister again.
As we mentioned in yesterday’s blog, Tsakalotos is a member of the Group of 53 -- Syriza MPs who oppose austerity, but remain loyal to Tsipras.As we mentioned in yesterday’s blog, Tsakalotos is a member of the Group of 53 -- Syriza MPs who oppose austerity, but remain loyal to Tsipras.
As such, Tsakalotos might not fancy implementing the bailout package of tough spending cuts and tax rises.As such, Tsakalotos might not fancy implementing the bailout package of tough spending cuts and tax rises.
Kathimerini explains:Kathimerini explains:
If Tsakalotos was not appointed finance minister he could still lead negotiations with the eurozone, which has agreed an €86bn ($96 billion) bailout with Greece in exchange for deep economic reforms.If Tsakalotos was not appointed finance minister he could still lead negotiations with the eurozone, which has agreed an €86bn ($96 billion) bailout with Greece in exchange for deep economic reforms.
Tsipras’s alternative would be Giorgos Houliarakis, who has been finance minister in the caretaker government put in place during Greece’s election campaign.Tsipras’s alternative would be Giorgos Houliarakis, who has been finance minister in the caretaker government put in place during Greece’s election campaign.
Updated at 10.33am BSTUpdated at 10.33am BST
10.28am BST10:2810.28am BST10:28
Britain’s slow progress reducing its budget deficit means the UK is vulnerable to economic shocks, warns Ross Campbell, ICAEW Director for Public Sector Policy.Britain’s slow progress reducing its budget deficit means the UK is vulnerable to economic shocks, warns Ross Campbell, ICAEW Director for Public Sector Policy.
Here’s his take on today’s figures:Here’s his take on today’s figures:
Sorting our public finances depends on robust tax receipts, so it is disappointing to see corporation and income tax revenues decrease. The weakening global economy could also have a significant impact on tax receipts in the coming months, which would only make the situation worse.Sorting our public finances depends on robust tax receipts, so it is disappointing to see corporation and income tax revenues decrease. The weakening global economy could also have a significant impact on tax receipts in the coming months, which would only make the situation worse.
10.12am BST10:1210.12am BST10:12
10.11am BST10:1110.11am BST10:11
Back in the eurozone, Italy’s prime ministerBack in the eurozone, Italy’s prime minister
finance ministerfinance minister
has waded into UK politica with an attack on Labour’s leader, Jeremy Corbyn. has waded into UK politica with an attack on Labour’s leader, Jeremy Corbyn.
Matteo Renzi has been dubbed Italy’s Tony Blair. And he probably spoke for the former PM when he told lawmakers that the MP for Islington North wasn’t a winner.Matteo Renzi has been dubbed Italy’s Tony Blair. And he probably spoke for the former PM when he told lawmakers that the MP for Islington North wasn’t a winner.
Renzi said:Renzi said:
“After what happened with Corbyn, I think [David] Cameron is the happiest of all about Corbyn’s win....“After what happened with Corbyn, I think [David] Cameron is the happiest of all about Corbyn’s win....
“It’s not a question of being Blairite or anti-Blairite, it’s a matter of ‘Do you want to go to elections like you go to the Olympics, to win or to participate’?”“It’s not a question of being Blairite or anti-Blairite, it’s a matter of ‘Do you want to go to elections like you go to the Olympics, to win or to participate’?”
Labour members, though, weren’t convinced by the argument that they needed a more centrist leader - and the voters haven’t had their say yet either.Labour members, though, weren’t convinced by the argument that they needed a more centrist leader - and the voters haven’t had their say yet either.
Related: Corbyn election shows Labour's delight in losing, says Italian PMRelated: Corbyn election shows Labour's delight in losing, says Italian PM
Renzi also told MPs that Greece’s former finance minister, Yanis Varoufakis, had been “got rid of”.Renzi also told MPs that Greece’s former finance minister, Yanis Varoufakis, had been “got rid of”.
Varoufakis has promptly hit back, declaring that he’s “alive and kicking” politically-speaking.Varoufakis has promptly hit back, declaring that he’s “alive and kicking” politically-speaking.
So, @yanisvaroufakis is baaaack. And he has a message for @matteorenzi http://t.co/jYWMx6dVdk pic.twitter.com/XjmD2TBGA0So, @yanisvaroufakis is baaaack. And he has a message for @matteorenzi http://t.co/jYWMx6dVdk pic.twitter.com/XjmD2TBGA0
Updated at 10.14am BSTUpdated at 10.14am BST
10.03am BST10:0310.03am BST10:03
Today’s public finance figures also show that Britain is heading towards a deficit of around £70bn this year.Today’s public finance figures also show that Britain is heading towards a deficit of around £70bn this year.
Borrowing illustrated pic.twitter.com/fQDy89Z8WVBorrowing illustrated pic.twitter.com/fQDy89Z8WV
9.53am BST09:539.53am BST09:53
UK public finances miss forecastsUK public finances miss forecasts
Britain had to borrow £12bn to balance the books in August, around £3bn more than expected. But it’s not a reason to panic.Britain had to borrow £12bn to balance the books in August, around £3bn more than expected. But it’s not a reason to panic.
This is the largest monthly deficit since August 2012, due to unusually weak income tax receipts. According to the ONS, more people paid income tax bills in July, so last month suffered a shortfall.This is the largest monthly deficit since August 2012, due to unusually weak income tax receipts. According to the ONS, more people paid income tax bills in July, so last month suffered a shortfall.
So far this year, public sector net borrowing is around 10% lower than a year ago, meaning the government is on track to cut the deficit in 2015-16 (but not eliminate, of course).So far this year, public sector net borrowing is around 10% lower than a year ago, meaning the government is on track to cut the deficit in 2015-16 (but not eliminate, of course).
So whilst the year so far has been better for UK borrowing and PSBR the figures for August are disappointing #GBP #AusteritySo whilst the year so far has been better for UK borrowing and PSBR the figures for August are disappointing #GBP #Austerity
Updated at 9.54am BSTUpdated at 9.54am BST
9.37am BST09:379.37am BST09:37
France’s finance minister has called for a “Europe-wide” probe to address the revelations that Volkswagen evaded US pollution tests.France’s finance minister has called for a “Europe-wide” probe to address the revelations that Volkswagen evaded US pollution tests.
AFP has the details:AFP has the details:
Michel Sapin told French radio that in order to “reassure” the public, it seemed “necessary” to carry out checks on cars manufactured by other European carmakers.Michel Sapin told French radio that in order to “reassure” the public, it seemed “necessary” to carry out checks on cars manufactured by other European carmakers.
“We are in a European market, with European rules that need to be respected,” Sapin told Europe 1 radio.“We are in a European market, with European rules that need to be respected,” Sapin told Europe 1 radio.
“Even if it’s just to reassure people, it seems necessary to me that (checks should be carried out) also on French carmakers,” he said, adding he had no “particular reason” to suspect wrongdoing.“Even if it’s just to reassure people, it seems necessary to me that (checks should be carried out) also on French carmakers,” he said, adding he had no “particular reason” to suspect wrongdoing.
Updated at 9.58am BSTUpdated at 9.58am BST
9.34am BST09:349.34am BST09:34
The FTSE 100 index of blue-chip shares has now shed 111 points, as the selloff picks up.The FTSE 100 index of blue-chip shares has now shed 111 points, as the selloff picks up.
#FTSE below 6000 for the first time in three weeks. TM pic.twitter.com/XMO5xCyZbH#FTSE below 6000 for the first time in three weeks. TM pic.twitter.com/XMO5xCyZbH
Pharmaceutical stocks are also falling, as US presidential candidate Hillary Clinton vowed to tackle price-gouging in the sector. She waded in after an entrepreneur hiked the price of a life-saving drug by more than 50 times.Pharmaceutical stocks are also falling, as US presidential candidate Hillary Clinton vowed to tackle price-gouging in the sector. She waded in after an entrepreneur hiked the price of a life-saving drug by more than 50 times.
Price gouging like this in the specialty drug market is outrageous. Tomorrow I'll lay out a plan to take it on. -H https://t.co/9Z0Aw7aI6hPrice gouging like this in the specialty drug market is outrageous. Tomorrow I'll lay out a plan to take it on. -H https://t.co/9Z0Aw7aI6h
9.28am BST09:289.28am BST09:28
Over in Frankfurt, VW’s share price has now lost almost 5%.Over in Frankfurt, VW’s share price has now lost almost 5%.
Other car makers are also leading the DAX fallers, as the revelations that emissions data have been falsified continue to rock the sector.Other car makers are also leading the DAX fallers, as the revelations that emissions data have been falsified continue to rock the sector.
Conner Campbell of SpreadEx explains:Conner Campbell of SpreadEx explains:
News that South Korea, as well as the US, would be investigating the company’s diesel cars took the stock over 4% lower (and counting) immediately after the bell, pushing VW to a further 3 year low (and continuing to have a nasty knock on effect for majority shareholder Porsche and the rest of the auto-sector).News that South Korea, as well as the US, would be investigating the company’s diesel cars took the stock over 4% lower (and counting) immediately after the bell, pushing VW to a further 3 year low (and continuing to have a nasty knock on effect for majority shareholder Porsche and the rest of the auto-sector).
9.15am BST09:159.15am BST09:15
A selloff in the mining sector is helping to pull Europe’s stock markets down this morning.A selloff in the mining sector is helping to pull Europe’s stock markets down this morning.
The FTSE 100 is leading the selloff, down 1%.The FTSE 100 is leading the selloff, down 1%.
In London, commodity trader Glencore has slumped by 10% to 108p. That’s a blow to shareholders who bought shares at 125p in last week’s fundraising.In London, commodity trader Glencore has slumped by 10% to 108p. That’s a blow to shareholders who bought shares at 125p in last week’s fundraising.
Mining stocks are vulnerable to worries over global economic growth; today the coal prices has continued to slump, with demand looking lighter.Mining stocks are vulnerable to worries over global economic growth; today the coal prices has continued to slump, with demand looking lighter.
*COAL DROPS BELOW $50 FOR FIRST TIME IN EUROPE AS GLUT PERSISTS pic.twitter.com/0dcaWIbdsj*COAL DROPS BELOW $50 FOR FIRST TIME IN EUROPE AS GLUT PERSISTS pic.twitter.com/0dcaWIbdsj
8.57am BST08:578.57am BST08:57
Our Q&A explains why the Volkswagen emissions scandal is so serious, and what might happen next:Our Q&A explains why the Volkswagen emissions scandal is so serious, and what might happen next:
Related: VW scandal: what the emissions revelations meanRelated: VW scandal: what the emissions revelations mean
8.37am BST08:378.37am BST08:37
Volkswagen shares fall againVolkswagen shares fall again
Graham RuddickGraham Ruddick
Volkswagen shares are sliding again, down 3.4% in early trading after slumping by a fifth on Monday.Volkswagen shares are sliding again, down 3.4% in early trading after slumping by a fifth on Monday.
The selloff comes after the German automaker’s US chief executive admitted the company has “totally screwed up” over the emissions scandal that has rocked the automotive industry.The selloff comes after the German automaker’s US chief executive admitted the company has “totally screwed up” over the emissions scandal that has rocked the automotive industry.
Michael Horn admitted at an event in Brooklyn, New York, on Monday night that VW had been “dishonest” with regulators and the public.Michael Horn admitted at an event in Brooklyn, New York, on Monday night that VW had been “dishonest” with regulators and the public.
The world’s second-biggest carmaker could face a fine of up to $18bn (£11.6bn), criminal charges for its executives, and legal action from customers and shareholders due to US claims it used a defeat device to falsify emissions data.The world’s second-biggest carmaker could face a fine of up to $18bn (£11.6bn), criminal charges for its executives, and legal action from customers and shareholders due to US claims it used a defeat device to falsify emissions data.
Here’s the full story:Here’s the full story:
Related: Volkswagen scandal: US chief says carmaker 'totally screwed up'Related: Volkswagen scandal: US chief says carmaker 'totally screwed up'
8.21am BST08:218.21am BST08:21
Osborne quizzed on interest ratesOsborne quizzed on interest rates
George Osborne is now fielding questions about his trip to China, on Radio 4’s today programme.George Osborne is now fielding questions about his trip to China, on Radio 4’s today programme.
He’s defending his decision to build closer ties with Beijing.He’s defending his decision to build closer ties with Beijing.
Tens of thousands of jobs depend on our relations with China, and it’s an important partner in the battle against climate change, the chancellor argues.Tens of thousands of jobs depend on our relations with China, and it’s an important partner in the battle against climate change, the chancellor argues.
And what about issues such as human rights?And what about issues such as human rights?
It’s better to engage and talk on issues we disagree on....rather than standing on the sidelines and engaging in megaphone diplomacy.It’s better to engage and talk on issues we disagree on....rather than standing on the sidelines and engaging in megaphone diplomacy.
Osborne defends govt engaging with China despite worries over human rightsOsborne defends govt engaging with China despite worries over human rights
The Bank of England chief economist has warned that interest rates could be cut, so how worried should we be about the UK economy?The Bank of England chief economist has warned that interest rates could be cut, so how worried should we be about the UK economy?
Osborne: Both the problems in China, and the decisions that the Bank of England and the Federal Reserve are wrestling with, are problems of success.Osborne: Both the problems in China, and the decisions that the Bank of England and the Federal Reserve are wrestling with, are problems of success.
Governor Mark Carney has signalled pretty clear the direction that interest rates are heading (ie, up).Governor Mark Carney has signalled pretty clear the direction that interest rates are heading (ie, up).
Updated at 8.24am BSTUpdated at 8.24am BST
8.13am BST08:138.13am BST08:13
George Osborne’s calming words went down well with Chinese traders. The Shanghai index just closed, up almost 1%.George Osborne’s calming words went down well with Chinese traders. The Shanghai index just closed, up almost 1%.
After @George_Osborne started talking here, the Shanghai stock exchange hit a new intraday high. Just saying pic.twitter.com/rJj04RGTzZAfter @George_Osborne started talking here, the Shanghai stock exchange hit a new intraday high. Just saying pic.twitter.com/rJj04RGTzZ
8.09am BST08:098.09am BST08:09
Osborne: Don't run away from ChinaOsborne: Don't run away from China
UK chancellor George Osborne has called for Britain and China to build a Golden Decade together.UK chancellor George Osborne has called for Britain and China to build a Golden Decade together.
And he used a trip to China’s main stock market to do it.And he used a trip to China’s main stock market to do it.
Osborne told an audience in Shanghai that:Osborne told an audience in Shanghai that:
“I very deliberately chose to come here, to the Shanghai Stock Exchange, to the epicentre of the volatility in financial markets this summer, to say this:“I very deliberately chose to come here, to the Shanghai Stock Exchange, to the epicentre of the volatility in financial markets this summer, to say this:
“Whatever the headlines, regardless of the challenges, we shouldn’t be running away from China.”“Whatever the headlines, regardless of the challenges, we shouldn’t be running away from China.”
He added:He added:
“Let’s stick together and make Britain China’s best partner in the West. Let’s stick together and create a golden decade for both of our countries.”“Let’s stick together and make Britain China’s best partner in the West. Let’s stick together and create a golden decade for both of our countries.”
And here’s a short video of Osborne’s speech:And here’s a short video of Osborne’s speech:
.@George_Osborne speaking to a huge audience here in Shanghai pic.twitter.com/V2xMmpN9bL.@George_Osborne speaking to a huge audience here in Shanghai pic.twitter.com/V2xMmpN9bL
8.01am BST08:018.01am BST08:01
Alexis Tsipras will keep some familiar faces in the top jobs in his cabinet, predicts the Greek newspaper Kathimerini.Alexis Tsipras will keep some familiar faces in the top jobs in his cabinet, predicts the Greek newspaper Kathimerini.
But he may also create some new roles, to help implement the measures he signed up to this summer.But he may also create some new roles, to help implement the measures he signed up to this summer.
Kathimerini says:Kathimerini says:
It is expected that Euclid Tsakalotos will continue as finance minister and that Giorgos Stathakis will also keep his role at the Economy Ministry.It is expected that Euclid Tsakalotos will continue as finance minister and that Giorgos Stathakis will also keep his role at the Economy Ministry.
However, Tsipras is said to want to create a position at the level of deputy minister that will carry the responsibility for coordinating the government’s actions in relation to the demands of the third bailout. It is expected that caretaker finance minister Giorgos Houliarakis, who also led Greece’s negotiating team in Brussels over recent months, will take on this role.However, Tsipras is said to want to create a position at the level of deputy minister that will carry the responsibility for coordinating the government’s actions in relation to the demands of the third bailout. It is expected that caretaker finance minister Giorgos Houliarakis, who also led Greece’s negotiating team in Brussels over recent months, will take on this role.
SYRIZA stalwart Yiannis Dragasakis is expected to continue in his role as deputy prime minister. It was rumored that he was being lined up to become the next parliamentary speaker but it seems that this role is likely to go to Nikos Voutsis.SYRIZA stalwart Yiannis Dragasakis is expected to continue in his role as deputy prime minister. It was rumored that he was being lined up to become the next parliamentary speaker but it seems that this role is likely to go to Nikos Voutsis.
Sources said that Yiannis Panousis is unlikely to be recalled as citizens’ protection minister. Also, the current caretaker minister for immigration policy, Yiannis Mouzalas, may be kept on by the new government.Sources said that Yiannis Panousis is unlikely to be recalled as citizens’ protection minister. Also, the current caretaker minister for immigration policy, Yiannis Mouzalas, may be kept on by the new government.
More here:More here:
Tsipras returns as PM, cabinet due to follow swiftlyTsipras returns as PM, cabinet due to follow swiftly
7.52am BST07:527.52am BST07:52
The Agenda: Greek cabinet, VW emissions scandal deepensThe Agenda: Greek cabinet, VW emissions scandal deepens
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Having been sworn in as prime minister last night, Alexis Tsipras will be getting to work this morning creating a new cabinet. His eurozone allies are watching closely, to see if the left-winger can now deliver the challenging programme of tax rises and reforms demanded by lenders.Having been sworn in as prime minister last night, Alexis Tsipras will be getting to work this morning creating a new cabinet. His eurozone allies are watching closely, to see if the left-winger can now deliver the challenging programme of tax rises and reforms demanded by lenders.
As Tsipras sets off on his journey, his former finance minister, Yanis Varoufakis, is predicting he will fall short. Writing in the Guardian, Varoufakis explains why Tsipras will fail:As Tsipras sets off on his journey, his former finance minister, Yanis Varoufakis, is predicting he will fall short. Writing in the Guardian, Varoufakis explains why Tsipras will fail:
Tsipras must now implement a fiscal consolidation and reform programme that was designed to fail. Illiquid small businesses, with no access to capital markets, have to now pre-pay next year’s tax on their projected 2016 profits.Tsipras must now implement a fiscal consolidation and reform programme that was designed to fail. Illiquid small businesses, with no access to capital markets, have to now pre-pay next year’s tax on their projected 2016 profits.
Households will need to fork out outrageous property taxes on non-performing apartments and shops, which they can’t even sell. VAT rate hikes will boost VAT evasion.Households will need to fork out outrageous property taxes on non-performing apartments and shops, which they can’t even sell. VAT rate hikes will boost VAT evasion.
Week in week out, the troika will be demanding more recessionary, antisocial policies: pension cuts, lower child benefits, more foreclosures.Week in week out, the troika will be demanding more recessionary, antisocial policies: pension cuts, lower child benefits, more foreclosures.
Related: The lenders are the real winners in Greece – Alexis Tsipras has been set up to fail | Yanis VaroufakisRelated: The lenders are the real winners in Greece – Alexis Tsipras has been set up to fail | Yanis Varoufakis
Other problems are surfacing in Europe, though. Among them, the Volkswagen emissions scandal.Other problems are surfacing in Europe, though. Among them, the Volkswagen emissions scandal.
Overnight, South Korea has announced it will start an investigation into Volkswagen’s (VW) diesel cars after the automaker admitted to rigging emissions tests in the US.Overnight, South Korea has announced it will start an investigation into Volkswagen’s (VW) diesel cars after the automaker admitted to rigging emissions tests in the US.
How much damage will the unfolding crisis cause to the German car maker, and will the rest of the European car industry be hurt too?How much damage will the unfolding crisis cause to the German car maker, and will the rest of the European car industry be hurt too?
And as the UK prime minister is buffeted by a revengeful Lord Ashcroft, his chancellor George Osborne is a mission to build closer ties with China. He’s in Shanghai today, speaking at the country’s stock exchange.And as the UK prime minister is buffeted by a revengeful Lord Ashcroft, his chancellor George Osborne is a mission to build closer ties with China. He’s in Shanghai today, speaking at the country’s stock exchange.
.@George_Osborne backs China's ambition to be an IMF reserve currency.@George_Osborne backs China's ambition to be an IMF reserve currency
Here’s the economic agenda:Here’s the economic agenda:
European stock markets are expected to inch higher this morning.European stock markets are expected to inch higher this morning.
Euro markets have just opened: $FTSE 6121 up 12 $DAX 9990 up 41 $CAC 4595 up 9 $IBEX 9879 up 23 $MIB 21784 up 28Euro markets have just opened: $FTSE 6121 up 12 $DAX 9990 up 41 $CAC 4595 up 9 $IBEX 9879 up 23 $MIB 21784 up 28
We’ll be tracking all the main events through the day....We’ll be tracking all the main events through the day....
Updated at 9.31am BSTUpdated at 9.31am BST