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| UK economy expected to see slower growth - live | UK economy expected to see slower growth - live |
| (35 minutes later) | |
| 8.40am GMT08:40 | |
| More on the French economy: | |
| Sharp drop in #French consumer goods spending in Nov. suggests total household spending will be a drag on GDP in Q4. pic.twitter.com/u3SeOgIXix | |
| 8.28am GMT08:28 | |
| Mining shares are among the gainers in London, points out Tony Cross, market analyst at Trustnet Direct. He said: | |
| London’s FTSE-100 has surged higher at the open with thin volumes ahead of the Christmas break arguably exaggerating the move. Hopes that Chinese stimulus measures could buoy the fortunes of natural resources stocks, combined with some elements of a short squeeze, have driven miners to the top of the board. These gains may well look a little more sustainable after iron ore prices rose in Australian trade. | |
| 8.11am GMT08:11 | 8.11am GMT08:11 |
| Markets open higher | Markets open higher |
| European stock markets, as forecast, have made some strong opening gains. | European stock markets, as forecast, have made some strong opening gains. |
| The FTSE 100 is up 68 points or 1.1% in early trading, while Germany’s Dax has added 1.2%, France’s Cac and Spain’s Ibex have both climbed 1%, and Italy’s FTSE MIB is 0.8% higher. | The FTSE 100 is up 68 points or 1.1% in early trading, while Germany’s Dax has added 1.2%, France’s Cac and Spain’s Ibex have both climbed 1%, and Italy’s FTSE MIB is 0.8% higher. |
| One exception is Game Digital, down 39% after its profit warning. | One exception is Game Digital, down 39% after its profit warning. |
| 8.06am GMT08:06 | 8.06am GMT08:06 |
| Taxing times | Taxing times |
| Company tax affairs are in the spotlight at the moment. | Company tax affairs are in the spotlight at the moment. |
| Amazon and eBay are facing action over VAT, as Simon Bowers reports: | Amazon and eBay are facing action over VAT, as Simon Bowers reports: |
| Top tax officials are exploring whether Amazon and eBay can be forced to foot the bill for ballooning VAT fraud associated with an army of small overseas sellers who are rapidly coming to dominate sales of many popular items on Britain’s leading shopping websites. | Top tax officials are exploring whether Amazon and eBay can be forced to foot the bill for ballooning VAT fraud associated with an army of small overseas sellers who are rapidly coming to dominate sales of many popular items on Britain’s leading shopping websites. |
| The full story is here: | The full story is here: |
| Related: Amazon and eBay face crackdown over VAT fraud by overseas sellers | Related: Amazon and eBay face crackdown over VAT fraud by overseas sellers |
| Meanwhile a new survey shows many investment banks in the City of London paid little or no corporation tax: | Meanwhile a new survey shows many investment banks in the City of London paid little or no corporation tax: |
| Related: Anger at City banks paying little or no corporation tax | Related: Anger at City banks paying little or no corporation tax |
| 8.03am GMT08:03 | 8.03am GMT08:03 |
| French GDP grows in third quarter | French GDP grows in third quarter |
| The French economy grew by 0.3% in the third quarter, confirming earlier readings after showing no growth in the previous three months. | The French economy grew by 0.3% in the third quarter, confirming earlier readings after showing no growth in the previous three months. |
| Meanwhile French consumer spending fell unexpectedly by 1.1% in November, compared to expectations of a 0.1% increase. | Meanwhile French consumer spending fell unexpectedly by 1.1% in November, compared to expectations of a 0.1% increase. |
| French consumer spending on goods disappointingly fell back 1.1% m/m in Nov in blow for Q4 growth hopes. We currently expect 0.2% q/q growth | French consumer spending on goods disappointingly fell back 1.1% m/m in Nov in blow for Q4 growth hopes. We currently expect 0.2% q/q growth |
| 7.52am GMT07:52 | 7.52am GMT07:52 |
| Game Digital profit warning | Game Digital profit warning |
| And an early Christmas profit warning. Computer games retailer Game Digital said it had seen challenging trading conditions and disappointing sales since the start of the festive school holidays. | And an early Christmas profit warning. Computer games retailer Game Digital said it had seen challenging trading conditions and disappointing sales since the start of the festive school holidays. |
| So it expected half year profits to come in at £30m. Analysts at Liberum said: | So it expected half year profits to come in at £30m. Analysts at Liberum said: |
| UK sales have fallen off sharply in the past few weeks at the most critical time of year for Game. General weakness has been exacerbated by very rapidly slowing sales in old format content, down 57% in the UK, and while sales of new generation content remained strong these were not enough to offset the decline. The Spanish market remains strong with sales up 8%. | UK sales have fallen off sharply in the past few weeks at the most critical time of year for Game. General weakness has been exacerbated by very rapidly slowing sales in old format content, down 57% in the UK, and while sales of new generation content remained strong these were not enough to offset the decline. The Spanish market remains strong with sales up 8%. |
| While a decline in old format sales was expected the scale has surprised the company while the importance of Christmas trading has hugely magnified the issue. We cut our full year earnings per share forecasts by 60%, 2017 estimates by 42% and 2018 by 30%. There is no updated guidance on the dividend, but we note that current year cover is just 0.5 times. | While a decline in old format sales was expected the scale has surprised the company while the importance of Christmas trading has hugely magnified the issue. We cut our full year earnings per share forecasts by 60%, 2017 estimates by 42% and 2018 by 30%. There is no updated guidance on the dividend, but we note that current year cover is just 0.5 times. |
| Updated at 7.54am GMT | Updated at 7.54am GMT |
| 7.47am GMT07:47 | 7.47am GMT07:47 |
| Brent crude and West Texas trade at same level | Brent crude and West Texas trade at same level |
| Meanwhile oil prices have edged higher, with Brent crude up 1% to $36.48 a barrel. | Meanwhile oil prices have edged higher, with Brent crude up 1% to $36.48 a barrel. |
| But on Tuesday, for the first time in 10 years, Brent had traded below the level of US West Texas Intermediate. | But on Tuesday, for the first time in 10 years, Brent had traded below the level of US West Texas Intermediate. |
| Part of that was that was Brent coming under pressure on oversupply fears, dropping below its 11 year low, but partly it was data from the American Petroleum Industry showing an unexpected drop in stockpiles. | Part of that was that was Brent coming under pressure on oversupply fears, dropping below its 11 year low, but partly it was data from the American Petroleum Industry showing an unexpected drop in stockpiles. |
| At the moment the two measures - Brent and WTI - are trading at exactly the same level. | At the moment the two measures - Brent and WTI - are trading at exactly the same level. |
| Here - from last night - is the comparison: | Here - from last night - is the comparison: |
| Brent and WTI move back to parity. $CL_F $BRENT pic.twitter.com/tGHnhbA2mf | Brent and WTI move back to parity. $CL_F $BRENT pic.twitter.com/tGHnhbA2mf |
| There could be further volatilty when OPEC releases the crude oil outlook for 2016 at 10am GMT. | There could be further volatilty when OPEC releases the crude oil outlook for 2016 at 10am GMT. |
| Updated at 8.10am GMT | Updated at 8.10am GMT |
| 7.44am GMT07:44 | 7.44am GMT07:44 |
| European markets are expected to open higher after a fairly mixed day on Tuesday: | European markets are expected to open higher after a fairly mixed day on Tuesday: |
| Our European opening calls: $FTSE 6130 up 47 $DAX 10574 up 85 $CAC 4605 up 37 $IBEX 9486 up 71 $MIB 21190 up 129 | Our European opening calls: $FTSE 6130 up 47 $DAX 10574 up 85 $CAC 4605 up 37 $IBEX 9486 up 71 $MIB 21190 up 129 |
| 7.41am GMT07:41 | 7.41am GMT07:41 |
| Agenda: UK GDP growth expected at 0.5% | Agenda: UK GDP growth expected at 0.5% |
| Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business. |
| The UK economy is expected to have grown more slowly in the third quarter, as we get the final snapshot of the latest GDP figures, and then to improve again in the final three months. But the data will not be strong enough to prompt the Bank of England to consider an interest rate rise until well until 2016. | The UK economy is expected to have grown more slowly in the third quarter, as we get the final snapshot of the latest GDP figures, and then to improve again in the final three months. But the data will not be strong enough to prompt the Bank of England to consider an interest rate rise until well until 2016. |
| Most analysts are forecasting the initial reading of 0.5% growth will be confirmed, showing a slowdown from 0.7% in the previous three months. Howard Archer, chief UK and European economist at IHS Global Insight said: | Most analysts are forecasting the initial reading of 0.5% growth will be confirmed, showing a slowdown from 0.7% in the previous three months. Howard Archer, chief UK and European economist at IHS Global Insight said: |
| We expect GDP growth in the third quarter to be confirmed at 0.5% quarter-on-quarter and 2.3% year-on-year. We expect GDP growth to improve to 0.6% quarter-on-quarter in the fourth quarter, resulting in overall GDP growth of 2.4% in 2015. The 1.7%month-on-month jump in retail sales volumes in November suggests that consumer spending will be strong in the fourth quarter, which increases the possibility that growth could surprise on the upside and come in at 0.7% quarter-on-quarter. | We expect GDP growth in the third quarter to be confirmed at 0.5% quarter-on-quarter and 2.3% year-on-year. We expect GDP growth to improve to 0.6% quarter-on-quarter in the fourth quarter, resulting in overall GDP growth of 2.4% in 2015. The 1.7%month-on-month jump in retail sales volumes in November suggests that consumer spending will be strong in the fourth quarter, which increases the possibility that growth could surprise on the upside and come in at 0.7% quarter-on-quarter. |
| Michael Hewson, chief market analyst at CMC Markets UK, also expects a figure of 0.5%: | Michael Hewson, chief market analyst at CMC Markets UK, also expects a figure of 0.5%: |
| [UK GDP growth] to some extent has been slightly disappointing in the readings seen thus far in that it has only shown growth of 0.5%. There is an outside expectation that we could see an upward revision to 0.6% as a result of a strong September due to the Rugby World Cup and a buoyant services sector, which in turn should offer some optimism that the fourth quarter will be similarly positive. | [UK GDP growth] to some extent has been slightly disappointing in the readings seen thus far in that it has only shown growth of 0.5%. There is an outside expectation that we could see an upward revision to 0.6% as a result of a strong September due to the Rugby World Cup and a buoyant services sector, which in turn should offer some optimism that the fourth quarter will be similarly positive. |
| As far as rate rise expectations are concerned, it probably won’t move the dial that much in that a UK rate rise still seems some way off into 2016, after further policymaker comments in the last few days regarding the benign inflation outlook, and which has served to push the pound to eight month lows against the US dollar, a rather strange state of affairs for one of the best performing economies in the G7 this year. | As far as rate rise expectations are concerned, it probably won’t move the dial that much in that a UK rate rise still seems some way off into 2016, after further policymaker comments in the last few days regarding the benign inflation outlook, and which has served to push the pound to eight month lows against the US dollar, a rather strange state of affairs for one of the best performing economies in the G7 this year. |
| External MPC member Martin Weale, who at the end of 2014 had favoured a modest rise in rates, rather surprisingly suggested earlier this week that he was in no rush to nudge borrowing costs up, which for an economy that looks likely to set 12 successive quarters of economic expansion if the fourth quarter is as positive as the rest of 2015, came across as a little bit of a surprise for someone who has always seemed to be more of a hawkish disposition. | External MPC member Martin Weale, who at the end of 2014 had favoured a modest rise in rates, rather surprisingly suggested earlier this week that he was in no rush to nudge borrowing costs up, which for an economy that looks likely to set 12 successive quarters of economic expansion if the fourth quarter is as positive as the rest of 2015, came across as a little bit of a surprise for someone who has always seemed to be more of a hawkish disposition. |
| Later come US orders for durable goods - higher priced and longer lasting items such as cars, manufacturing equipment and aeroplanes. | Later come US orders for durable goods - higher priced and longer lasting items such as cars, manufacturing equipment and aeroplanes. |
| Updated at 7.56am GMT | Updated at 7.56am GMT |