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London Stock Exchange in merger talks with Deutsche Börse - business live London Stock Exchange in merger talks with Deutsche Börse - business live
(35 minutes later)
2.38pm GMT
14:38
It was not always so friendly between the LSE and Deutsche Börse:
Ah deja vu. And here's the note accidentally sent by LSE in 2000. Blame "german intransigence" if merger aborted. pic.twitter.com/lLq15hsWA7
And here’s the BBC’s story from the time.
2.31pm GMT
14:31
Sean Farrell
Here’s our first take on the LSE-Deutsche Börse merger plan:
The London Stock Exchange is in talks to merge with Germany’s Deutsche Börse in a deal that would seal an alliance first discussed at the turn of the millennium.
The LSE confirmed on Tuesday it was in detailed discussions with its German rival about an all-share merger. Under the proposed structure, Deutsche Börse shareholders would own 54.4% of the combined company and LSE shareholders would hold 45.6%.
The UK exchange said: “The boards believe that the potential merger would represent a compelling opportunity for both companies to strengthen each other in an industry-defining combination, creating a leading European-based global markets infrastructure group.”
The exchanges have considered combining forces before. They agreed to merge in 2000 before a rival bid for the LSE from Sweden’s OM Gruppen scuppered the deal, but was then rejected. The LSE then rejected a formal £1.3bn offer from Deutsche Börse in January 2005.
The full story is here:
Related: London Stock Exchange in merger talks with Deutsche Börse
2.22pm GMT
14:22
David Cheetham of City trading firm XTB.com says a merger between the LSE and Deutsche Borse would create one of the world’s biggest financial trading platforms.
“Shares in London Stock Exchange Group have soared by over 17% in the past hour as news that they’re in talks with Deutsche Boerse have been confirmed. If the deal were to go ahead it would create a clear market leader for European and one of the largest exchanges in the world for trading and risk managing derivatives.
The timing of this development appears coincidental as the possibility of a Brexit has become increased in recent days now that a referendum date has been set and Boris has joined the Out campaign.”
2.18pm GMT
14:18
The news that Britain’s stock exchange could soon merge with its German rival has startled the City, especially given the upcoming EU vote.
Mike van Dulken, head of research at Accendo Markets, tweets:
Interesting timing for #LSE #Deutsche Boerse merger talks given how close #Brexit referendum is
1.56pm GMT1.56pm GMT
13:5613:56
LSE confirms merger talks!LSE confirms merger talks!
It’s official! The London Stock Exchange has just confirmed that it is talking to Deutsche Börse about a merger deal.It’s official! The London Stock Exchange has just confirmed that it is talking to Deutsche Börse about a merger deal.
It says:It says:
Further to the recent movement in LSE’s share price, the Board of LSE and the Management Board of Deutsche Börse confirm that they are in detailed discussions about a potential merger of equals of the two businesses.Further to the recent movement in LSE’s share price, the Board of LSE and the Management Board of Deutsche Börse confirm that they are in detailed discussions about a potential merger of equals of the two businesses.
This would create “a leading European-based global markets infrastructure group”, it claims, adding:This would create “a leading European-based global markets infrastructure group”, it claims, adding:
The combination of LSE and Deutsche Boerse’s complementary growth strategies, products, services and geographic footprint would be expected to deliver an enhanced ability to provide a full service offering to customers on a global basis.The combination of LSE and Deutsche Boerse’s complementary growth strategies, products, services and geographic footprint would be expected to deliver an enhanced ability to provide a full service offering to customers on a global basis.
Under the plan, Deutsche Börse shareholders would hold 54.4% of the new companym, while LSE shareholders would hold 45.6%. Under the plan, Deutsche Börse shareholders would hold 54.4% of the new company, while LSE shareholders would hold 45.6%.
The LSE’s shares are now up 17%, valuing the group at almost £9.5bn.The LSE’s shares are now up 17%, valuing the group at almost £9.5bn.
Updated
at 2.24pm GMT
1.41pm GMT1.41pm GMT
13:4113:41
Deutsche Börse shares have also jumped, by around 3%, following the reports of merger talks with Britain’s LSE.Deutsche Börse shares have also jumped, by around 3%, following the reports of merger talks with Britain’s LSE.
And Euronext, another stock market operator, has seen its shares rally by 4%. Investors may be anticipating a bidding war.And Euronext, another stock market operator, has seen its shares rally by 4%. Investors may be anticipating a bidding war.
Here’s the Reuters story that sparked the move:Here’s the Reuters story that sparked the move:
Deutsche Boerse, LSE in merger talks - sources (via @Reuters) pic.twitter.com/sbdCv3q1eNDeutsche Boerse, LSE in merger talks - sources (via @Reuters) pic.twitter.com/sbdCv3q1eN
1.21pm GMT1.21pm GMT
13:2113:21
LSE shares soar on takeover talks reportLSE shares soar on takeover talks report
BREAKING: Takeover speculation has just driven shares in the London Stock Exchange up by 9%, to the top of the FTSE 100 leaderboard.BREAKING: Takeover speculation has just driven shares in the London Stock Exchange up by 9%, to the top of the FTSE 100 leaderboard.
It has been trigger by a Reuters report, that the LSE is in talks over a possible merger with German rival Deutsche Börse.It has been trigger by a Reuters report, that the LSE is in talks over a possible merger with German rival Deutsche Börse.
Nothing official yet, though.Nothing official yet, though.
More than a decade ago, the LSE rejected Deutsche Börse’s advances....More than a decade ago, the LSE rejected Deutsche Börse’s advances....
The timing of these talks is quite intriguing, given the uncertainty which the EU referendum is casting over the City....The timing of these talks is quite intriguing, given the uncertainty which the EU referendum is casting over the City....
1.07pm GMT1.07pm GMT
13:0713:07
Analysts at Scotia Bank have predicted that the UK pound could slump to just $1.30 if the Out campaign win June’s vote.Analysts at Scotia Bank have predicted that the UK pound could slump to just $1.30 if the Out campaign win June’s vote.
That would be its lowest level in around 30 years, worse than the selloff after the 2008 financial crisis.That would be its lowest level in around 30 years, worse than the selloff after the 2008 financial crisis.
They have also suggested that consumer confidence would be badly hit, as economic growth slowed sharply..They have also suggested that consumer confidence would be badly hit, as economic growth slowed sharply..
Brexit vote would cut UK growth to zero this yr, £ to $1.30 & hit assets. But no bloodbath says Alan Clarke, Scotia pic.twitter.com/Fi5JJa7lkIBrexit vote would cut UK growth to zero this yr, £ to $1.30 & hit assets. But no bloodbath says Alan Clarke, Scotia pic.twitter.com/Fi5JJa7lkI
12.32pm GMT12.32pm GMT
12:3212:32
The pound is down again....The pound is down again....
Sterling is dropping back towards the seven year low it struck on Monday.Sterling is dropping back towards the seven year low it struck on Monday.
The pound has lost half a cent against the US dollar, dipping below the $1.41 mark. Yesterday, it weakened to $1.4057, before a late revival.The pound has lost half a cent against the US dollar, dipping below the $1.41 mark. Yesterday, it weakened to $1.4057, before a late revival.
Mark Carney’s warning that investors are protecting themselves against future sterling weakness (details here) may have reminded traders that we face months of uncertainty.Mark Carney’s warning that investors are protecting themselves against future sterling weakness (details here) may have reminded traders that we face months of uncertainty.
Dominic Stewart, sales trader at ETX Capital, says:Dominic Stewart, sales trader at ETX Capital, says:
Sterling has remained vulnerable after falling nearly 2% yesterday - its biggest one day drop in almost six years - amidst fears that Britain may leave the European Union.Sterling has remained vulnerable after falling nearly 2% yesterday - its biggest one day drop in almost six years - amidst fears that Britain may leave the European Union.
12.14pm GMT12.14pm GMT
12:1412:14
The Treasury Committee session is now over, and Mark Carney and colleagues have been released back into the wild.The Treasury Committee session is now over, and Mark Carney and colleagues have been released back into the wild.
But if you want more EU referendum action, check out our Politics Live blog.But if you want more EU referendum action, check out our Politics Live blog.
Andy Sparrow is on deck, covering a speech from David Cameron right now:Andy Sparrow is on deck, covering a speech from David Cameron right now:
Cameron: EU referendum is a ‘once in a generation’ decision - Politics liveCameron: EU referendum is a ‘once in a generation’ decision - Politics live
UpdatedUpdated
at 12.15pm GMTat 12.15pm GMT
12.00pm GMT12.00pm GMT
12:0012:00
Guardian readers have known for a while that the Bank of England was working on contingency plans for the EU referendum.Guardian readers have known for a while that the Bank of England was working on contingency plans for the EU referendum.
Back in May 2015, the Bank of England accidentally emailed us the details of Project Bookend, including how to deny it existed. #oopsBack in May 2015, the Bank of England accidentally emailed us the details of Project Bookend, including how to deny it existed. #oops
Related: Secret Bank of England taskforce investigates financial fallout of BrexitRelated: Secret Bank of England taskforce investigates financial fallout of Brexit
We wrote at the time that:We wrote at the time that:
The email indicates that a small group of senior staff are to examine the effect of a Brexit under the authority of Sir Jon Cunliffe, who as deputy director for financial stability has responsibility for monitoring the risk of another market crash.The email indicates that a small group of senior staff are to examine the effect of a Brexit under the authority of Sir Jon Cunliffe, who as deputy director for financial stability has responsibility for monitoring the risk of another market crash.
Cunliffe also sits on the board of the City regulator, the Prudential Regulatory Authority.Cunliffe also sits on the board of the City regulator, the Prudential Regulatory Authority.
James Talbot, the head of the monetary assessment and strategy division, is involved in Project Bookend, drawing on his past work as an adviser on European economic policy.James Talbot, the head of the monetary assessment and strategy division, is involved in Project Bookend, drawing on his past work as an adviser on European economic policy.
UpdatedUpdated
at 12.19pm GMTat 12.19pm GMT
11.52am GMT11.52am GMT
11:5211:52
Carney: Brexit contingency planning is underwayCarney: Brexit contingency planning is underway
The Bank of England is engaged in contingency planning for the EU referendum, Mark Carney tells the Treasury committee.The Bank of England is engaged in contingency planning for the EU referendum, Mark Carney tells the Treasury committee.
He also reveals that the Prudential Regulation Authority is keeping abreast of the contingency plans that UK banks are making ahead of the June 23 vote.He also reveals that the Prudential Regulation Authority is keeping abreast of the contingency plans that UK banks are making ahead of the June 23 vote.
Further details will discussed on March 8, when the governor testifies to the committee specifically about the referendum.Further details will discussed on March 8, when the governor testifies to the committee specifically about the referendum.
[The PRA supervises Britain’s financial sector, to ensure they are “safe and sound”, so they will be keen to avoid any firms being caught out by the referendum].[The PRA supervises Britain’s financial sector, to ensure they are “safe and sound”, so they will be keen to avoid any firms being caught out by the referendum].
Mark Carney says BofE has a done "contingency planning" in case there is a BrexitMark Carney says BofE has a done "contingency planning" in case there is a Brexit
UpdatedUpdated
at 11.53am GMTat 11.53am GMT
11.48am GMT11.48am GMT
11:4811:48
Rachel Reeves MP asks Mark Carney whether he expects the recent falls in sterling to continue.Rachel Reeves MP asks Mark Carney whether he expects the recent falls in sterling to continue.
The governor reiterates that investors have been buying downside protection to protect themselves against falls against the pound, especially against the US dollar [rather than the euro, because it could also suffer if Britain leaves the EU].The governor reiterates that investors have been buying downside protection to protect themselves against falls against the pound, especially against the US dollar [rather than the euro, because it could also suffer if Britain leaves the EU].
Governor Carney concludes:Governor Carney concludes:
It is safe to say that an element of referendum premium has come into sterling.It is safe to say that an element of referendum premium has come into sterling.
UpdatedUpdated
at 12.10pm GMTat 12.10pm GMT
11.42am GMT11.42am GMT
11:4211:42
Rachel Reeves MP reminds Carney that the latest Inflation Report states that interest rates are likely to rise, not fall. How can he can so confident?Rachel Reeves MP reminds Carney that the latest Inflation Report states that interest rates are likely to rise, not fall. How can he can so confident?
Mark Carney gives a rather dovish answer, says the Bank expects interest rates to rise, gradually, over the forecast horizon.Mark Carney gives a rather dovish answer, says the Bank expects interest rates to rise, gradually, over the forecast horizon.
But of course, if risks increased and the global economy deteriorated, that would have implications.But of course, if risks increased and the global economy deteriorated, that would have implications.
So do you expect the next move to be up, not down?So do you expect the next move to be up, not down?
Carney replies that the UK domestic economy is positive, but that must be balanced with disappointing signs from abroad. We must weigh the two up, and we’re not taking a policy decision today.Carney replies that the UK domestic economy is positive, but that must be balanced with disappointing signs from abroad. We must weigh the two up, and we’re not taking a policy decision today.
Fascinating. At TSC Rachel Reeves asks Carney whether he still thinks next move will be up rather than down. He stonewalls. Big shift... 1/2Fascinating. At TSC Rachel Reeves asks Carney whether he still thinks next move will be up rather than down. He stonewalls. Big shift... 1/2
11.38am GMT11.38am GMT
11:3811:38
Carney: No intention of imposing negative rates.Carney: No intention of imposing negative rates.
Mark Carney moves swiftly to crush speculation that the Bank of England could hit UK banks with negative interest rates.Mark Carney moves swiftly to crush speculation that the Bank of England could hit UK banks with negative interest rates.
We have absolutely no intention, no interest, in doing that [imposing negative rates].We have absolutely no intention, no interest, in doing that [imposing negative rates].
He adds that mortgage rates in Switzerland have actually gone up, even though the Swiss central bank have imposed negative borrowing costs.He adds that mortgage rates in Switzerland have actually gone up, even though the Swiss central bank have imposed negative borrowing costs.
NEVER BELIEVE ANYTHING UNTIL IT IS OFFICIALLY DENIED! Jim Hacker https://t.co/RpNdCAUig5NEVER BELIEVE ANYTHING UNTIL IT IS OFFICIALLY DENIED! Jim Hacker https://t.co/RpNdCAUig5