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You can find the current article at its original source at https://www.theguardian.com/business/live/2016/jul/07/pound-dollar-brexit-politicians-city-stock-markets-retail-live
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| Pound could 'hit parity with dollar' unless politicians get a grip on Brexit – business live | Pound could 'hit parity with dollar' unless politicians get a grip on Brexit – business live |
| (35 minutes later) | |
| 10.35am BST | |
| 10:35 | |
| Here’s more reaction to Andrea Leadsom’s claims that Britain has a bright economic future after Brexit, and that a weak pound isn’t a problem.... | |
| “I want to speak to the markets,” says Andrea Leadsom, with the air of someone who imagines you can negotiate with gravity. | |
| Leadsom banging on about FTSE 100 as evidence of good news is yet more proof that she doesn't understand finance https://t.co/5mNNfzqz30 | |
| Remind yourselves of this folks when you fill up your car with (more expensive) petrol this weekend pic.twitter.com/aw7PMJ12i2 | |
| 10.06am BST | |
| 10:06 | |
| Leadsom: We need a good trade deal | |
| Andrea Leadsom, one of the contenders to be Britain’s next prime minister, has heeded Mohamed El-Erian’s warning that the UK needs to arrange a workable trade deal with Europe. | |
| A free trade deal with the EU is vital, Leadsom says, as she outlines her economic platform. | |
| She told supporters that “no-one needs to fear” Britain’s decision to leave the European Union, as the government will move carefully. | |
| Trade must be the top priority, she says, adding: | |
| Britain must get continued tariff-free trade with the EU and continued free trade with other countries as at present, plus agreements with other fast-growing economies. | |
| However, she doesn’t give any details about how she’ll negotiate this happy outcome. | |
| Our Politics liveblog has all the details: | |
| Related: Tony Blair says he was right to 'stand by America' in run-up to Iraq war – live | |
| Leadsom was also remarkably upbeat about the financial consequences of the Brexit vote. | |
| She claims that the slump in the pound is partly because the markets called the result wrong – ignoring the fact that economists - correctly - predicted sterling would tumble to current levels. | |
| Leadsom: "Fcasts for a disaster for sterling have not been proven correct" < Market prices suggested £ would fall below $1.30. And it did. | |
| She also argues that lower sterling is good for exports, makes inward investment more attractive, and means Britons will import less and buy more at home. | |
| Yes, but it also means goods are going to cost more.... | |
| Yes as Leadsom says weaker pound boosts exports. It also pushes up inflation & squeezes real incomes. Good for business, worse for consumers | |
| Leadsom also loses marks for declaring that the FTSE 100 is now higher than two weeks ago, without explaining it’s mainly due to the weak pound. | |
| Leadsom say FTSE up (but this is only cos £ at 30 year low against the $) FTSE 250 (more domestically-focused companies) DOWN | |
| Updated | |
| at 10.14am BST | |
| 9.51am BST | 9.51am BST |
| 09:51 | 09:51 |
| Analysts at Deutsche Bank have predicted that the pound will keep falling, and hit $1.15 by the end of 2016. Or worse.... | Analysts at Deutsche Bank have predicted that the pound will keep falling, and hit $1.15 by the end of 2016. Or worse.... |
| Deutsche Bank on their end-2016 $1.15 forecast for £ - "our aggressive forecasts may still be under-stating the level of weakness required." | Deutsche Bank on their end-2016 $1.15 forecast for £ - "our aggressive forecasts may still be under-stating the level of weakness required." |
| 9.49am BST | 9.49am BST |
| 09:49 | 09:49 |
| It feels like ancient history now... but new figures show that British industry was growing at its fastest pace in six-years before the EU referendum. | It feels like ancient history now... but new figures show that British industry was growing at its fastest pace in six-years before the EU referendum. |
| UK industrial output jumped by 1.9% in the three months to May compared with the previous three months, which is the strongest increase since May 2010. | UK industrial output jumped by 1.9% in the three months to May compared with the previous three months, which is the strongest increase since May 2010. |
| Output did drop by 0.5% in May, but that’s less than the 1% economists expected. | Output did drop by 0.5% in May, but that’s less than the 1% economists expected. |
| So, broadly encouraging -- but we don’t know what impact the referendum result, or the weaker pound, has had yet.... | So, broadly encouraging -- but we don’t know what impact the referendum result, or the weaker pound, has had yet.... |
| UK industrial and manufacturing production was fairly solid in May but of course that was May....... #GDP #BoE | UK industrial and manufacturing production was fairly solid in May but of course that was May....... #GDP #BoE |
| In April UK pharmaceutical production surged and in May some of it was lost. Thats why indy and manufacturing fell in May #BoE | In April UK pharmaceutical production surged and in May some of it was lost. Thats why indy and manufacturing fell in May #BoE |
| 9.33am BST | 9.33am BST |
| 09:33 | 09:33 |
| Chinese computer maker Lenovo has warned that it will probably hike its prices following the Brexit vote. | Chinese computer maker Lenovo has warned that it will probably hike its prices following the Brexit vote. |
| The recent slump in the pound’s value means that Lenovo’s UK earnings are now worth around 10% less than before the referendum. | The recent slump in the pound’s value means that Lenovo’s UK earnings are now worth around 10% less than before the referendum. |
| Chief financial officer Wai Ming Wong told reporters earlier today price increases are one option being considered, saying: | Chief financial officer Wai Ming Wong told reporters earlier today price increases are one option being considered, saying: |
| “To the extent that we need to pass things on to the customer, we will” | “To the extent that we need to pass things on to the customer, we will” |
| More here. | More here. |
| Personal-computer giant Lenovo considers raising prices to maintain #Brexit profitability https://t.co/GEmE6nBt03 pic.twitter.com/xSUIyM6T6L | Personal-computer giant Lenovo considers raising prices to maintain #Brexit profitability https://t.co/GEmE6nBt03 pic.twitter.com/xSUIyM6T6L |
| 9.24am BST | 9.24am BST |
| 09:24 | 09:24 |
| Mohamed El-Erian’s warning about the pound isn’t causing much angst in the City yet. | Mohamed El-Erian’s warning about the pound isn’t causing much angst in the City yet. |
| Most shares on the FTSE 100 are up this morning, led by financial stocks and builders such as Persimmon and Taylor Wimpey. | Most shares on the FTSE 100 are up this morning, led by financial stocks and builders such as Persimmon and Taylor Wimpey. |
| Conner Campbell of trading firm SpreadEx says: | Conner Campbell of trading firm SpreadEx says: |
| Strong recoveries from the previously battered banking and property stocks provided the thrust of the early growth, helping cable steady itself around $1.295. | Strong recoveries from the previously battered banking and property stocks provided the thrust of the early growth, helping cable steady itself around $1.295. |
| Construction firms need some relief; they’ve been badly hit by the fallout from the EU vote, losing around a third of the value due to fears of a UK recession. | Construction firms need some relief; they’ve been badly hit by the fallout from the EU vote, losing around a third of the value due to fears of a UK recession. |
| U.K. Home Builders since #Brexit vote:Taylor Wimpey -36.5%Persimmon -35%Berkeley Group -29.1%Barratt Developments -39.9%Bovis -38.4% | U.K. Home Builders since #Brexit vote:Taylor Wimpey -36.5%Persimmon -35%Berkeley Group -29.1%Barratt Developments -39.9%Bovis -38.4% |
| 9.13am BST | 9.13am BST |
| 09:13 | 09:13 |
| Sports Direct warns about Brexit uncertainty | Sports Direct warns about Brexit uncertainty |
| Brexit uncertainty is also casting shadows over Sports Direct, the retail chain that has faced criticism over its working practices. | Brexit uncertainty is also casting shadows over Sports Direct, the retail chain that has faced criticism over its working practices. |
| Sports Direct buys many of its products overseas, so the slump in the pound since the Brexit vote is having an immediate impact on current profitability. | Sports Direct buys many of its products overseas, so the slump in the pound since the Brexit vote is having an immediate impact on current profitability. |
| It also reported this morning that pre-tax earnings fell by 8.4% in the last financial year; meaning the staff bonus scheme won’t pay out. | It also reported this morning that pre-tax earnings fell by 8.4% in the last financial year; meaning the staff bonus scheme won’t pay out. |
| And CEO Dave Forsey warned that consumer confidence will be hit by the “current political uncertainty”. Shares are up 11% this morning, though, suggesting it has done better than the City expected. | And CEO Dave Forsey warned that consumer confidence will be hit by the “current political uncertainty”. Shares are up 11% this morning, though, suggesting it has done better than the City expected. |
| Related: Sports Direct sees fall in profits after Brexit, says Mike Ashley | Related: Sports Direct sees fall in profits after Brexit, says Mike Ashley |
| 8.47am BST | 8.47am BST |
| 08:47 | 08:47 |
| Shares in Marks & Spencer have fallen by 1.7% after the high street chain reported its biggest slump in clothing sales in a decade. | Shares in Marks & Spencer have fallen by 1.7% after the high street chain reported its biggest slump in clothing sales in a decade. |
| Clothing sales at M&S slumped by almost 9% in the last quarter, a jaw-dropping decline, | Clothing sales at M&S slumped by almost 9% in the last quarter, a jaw-dropping decline, |
| Newish CEO Steve Rose isn’t panicking, saying it’s all part of his plan to cut promotions and offer cheaper prices. | Newish CEO Steve Rose isn’t panicking, saying it’s all part of his plan to cut promotions and offer cheaper prices. |
| But he also admitted that consumer confidence did take a hit in the run-up to the EU referendum. | But he also admitted that consumer confidence did take a hit in the run-up to the EU referendum. |
| Related: Marks & Spencer suffers biggest clothing sales fall in 10 years | Related: Marks & Spencer suffers biggest clothing sales fall in 10 years |
| 8.40am BST | 8.40am BST |
| 08:40 | 08:40 |
| Just in: UK house prices rose by 1.3% in June, according to the Halifax building society. | Just in: UK house prices rose by 1.3% in June, according to the Halifax building society. |
| That means the prices grew by 8.4%, year-on-year, in the last quarter. That’s a slight slowdown, but higher than the 7.7% which the City expected. | That means the prices grew by 8.4%, year-on-year, in the last quarter. That’s a slight slowdown, but higher than the 7.7% which the City expected. |
| #Halifax surprisingly reports #house #prices up 1.3% m/m in June, but annual growth rate slows to 8.4% in 3 months to June (9.2% previously) | #Halifax surprisingly reports #house #prices up 1.3% m/m in June, but annual growth rate slows to 8.4% in 3 months to June (9.2% previously) |
| It’s probably too early to see the impact of the Brexit vote on the property market, but July’s figures could be interesting.... | It’s probably too early to see the impact of the Brexit vote on the property market, but July’s figures could be interesting.... |
| Halifax records pre-Brexit house prices up 1.3% in June. Wait to see official @ONS numbers before acting on this pic.twitter.com/i2qwnk05AQ | Halifax records pre-Brexit house prices up 1.3% in June. Wait to see official @ONS numbers before acting on this pic.twitter.com/i2qwnk05AQ |
| Updated | Updated |
| at 8.48am BST | at 8.48am BST |
| 8.31am BST | 8.31am BST |
| 08:31 | 08:31 |
| The pound is actually quite calm this morning. | The pound is actually quite calm this morning. |
| It’s hovering near 31-year lows against the US dollar and three-year lows against the euro. | It’s hovering near 31-year lows against the US dollar and three-year lows against the euro. |
| A more stable start today for the UK Pound £ in the mid US $1.29s and just below 1.17 versus the Euro | A more stable start today for the UK Pound £ in the mid US $1.29s and just below 1.17 versus the Euro |
| 8.28am BST | 8.28am BST |
| 08:28 | 08:28 |
| Analyst: Don't slash rates to zero, Mr Carney | Analyst: Don't slash rates to zero, Mr Carney |
| The pound could fall closer to parity with the US dollar if the Bank of England cuts interest rates closer to zero. | The pound could fall closer to parity with the US dollar if the Bank of England cuts interest rates closer to zero. |
| Banking analyst Sandy Chen of Cenkos Securities believes the BoE should resist slashing borrowing costs from 0.5% to zero. He argues it would send sterling slumping to new 31-year lows. | Banking analyst Sandy Chen of Cenkos Securities believes the BoE should resist slashing borrowing costs from 0.5% to zero. He argues it would send sterling slumping to new 31-year lows. |
| He writes: | He writes: |
| There is talk of a 50 basis point rate cut next week. Note to Mark Carney: Please don’t. | There is talk of a 50 basis point rate cut next week. Note to Mark Carney: Please don’t. |
| A 50bp cut won’t boost borrowing, but it will almost certainly lead to another drop in cable (the pound/US dollar exchange rate). | A 50bp cut won’t boost borrowing, but it will almost certainly lead to another drop in cable (the pound/US dollar exchange rate). |
| In our opinion, if rates were kept on hold, then investors (including those overseas UK commercial property investors who are now on the sidelines according the BOE’s own Financial Stability Report) might be tempted to do some bottom-fishing. | In our opinion, if rates were kept on hold, then investors (including those overseas UK commercial property investors who are now on the sidelines according the BOE’s own Financial Stability Report) might be tempted to do some bottom-fishing. |
| 8.22am BST | 8.22am BST |
| 08:22 | 08:22 |
| The London stock market has opened higher this morning, after yesterday’s selloff. | The London stock market has opened higher this morning, after yesterday’s selloff. |
| The FTSE 100 index, which benefits from a weak pound, has by 80 points or 1.2% to 6543. Commercial property companies are leading the rally, reversing some of their heavy losses this week. | The FTSE 100 index, which benefits from a weak pound, has by 80 points or 1.2% to 6543. Commercial property companies are leading the rally, reversing some of their heavy losses this week. |
| The UK-focused FTSE 250 index is also up, gaining 1.1% or 175 points to 15844. | The UK-focused FTSE 250 index is also up, gaining 1.1% or 175 points to 15844. |
| Investors are in cheery mood, because Amercia’s central bank released some surprisingly dovish minute last night. That means US interest rates are expected to remain unchanged for many months. | Investors are in cheery mood, because Amercia’s central bank released some surprisingly dovish minute last night. That means US interest rates are expected to remain unchanged for many months. |
| 8.11am BST | 8.11am BST |
| 08:11 | 08:11 |
| George Magnus, senior economic adviser to UBS, also believes that the pound could easily hit parity with the US dollar “if the economy really shudders” | George Magnus, senior economic adviser to UBS, also believes that the pound could easily hit parity with the US dollar “if the economy really shudders” |
| He also disputes the idea a weak pound is a great boost for UK exporters | He also disputes the idea a weak pound is a great boost for UK exporters |
| In a blog post, Magnus argues that a weak currency is only really useful when there is solid overseas demand for a country’s goods. Today, though, world trade is stagnating and emerging markets growth is slowing.... | In a blog post, Magnus argues that a weak currency is only really useful when there is solid overseas demand for a country’s goods. Today, though, world trade is stagnating and emerging markets growth is slowing.... |
| You should note that the Pound has been falling since it reached $1.71 in July 2014, and yet the UK’s trade and external payments position has gotten steadily worse. In the first quarter of 2016, the UK’s trade deficit was the biggest recorded since 2008. | You should note that the Pound has been falling since it reached $1.71 in July 2014, and yet the UK’s trade and external payments position has gotten steadily worse. In the first quarter of 2016, the UK’s trade deficit was the biggest recorded since 2008. |
| So don’t let anybody tell you that a cheaper currency, plain and simple, is a good thing for the economy. It depends. | So don’t let anybody tell you that a cheaper currency, plain and simple, is a good thing for the economy. It depends. |
| FTSE not telling us too much about post Brexit economy, £ says more. Now up on website https://t.co/U2CB2beIBk | FTSE not telling us too much about post Brexit economy, £ says more. Now up on website https://t.co/U2CB2beIBk |
| Updated | Updated |
| at 8.41am BST | at 8.41am BST |
| 7.42am BST | 7.42am BST |
| 07:42 | 07:42 |
| El-Erian: Brexit could drive pound down to parity with dollar | El-Erian: Brexit could drive pound down to parity with dollar |
| The British pound could slump to parity with the US dollar unless UK politicians get their act together over the Brexit vote, a top financial figure has warned. | The British pound could slump to parity with the US dollar unless UK politicians get their act together over the Brexit vote, a top financial figure has warned. |
| Mohamed El-Erian, chief economic adviser to investment giant Allianz, says the UK government urgently needs to start developing a credible “Plan B” to European Union membership, that gives British firms a free trade agreement with the bloc. | Mohamed El-Erian, chief economic adviser to investment giant Allianz, says the UK government urgently needs to start developing a credible “Plan B” to European Union membership, that gives British firms a free trade agreement with the bloc. |
| Speaking to Reuters, El-Erian warned that sterling is very vulnerable, as: | Speaking to Reuters, El-Erian warned that sterling is very vulnerable, as: |
| “After the Brexit referendum, the UK has to urgently get its political act together, including a new Prime Minister who can negotiate effectively with the EU. | “After the Brexit referendum, the UK has to urgently get its political act together, including a new Prime Minister who can negotiate effectively with the EU. |
| Plan B depends on the politicians in London and across the Channel, but so far they have not stepped up to their economic governance responsibilities.” | Plan B depends on the politicians in London and across the Channel, but so far they have not stepped up to their economic governance responsibilities.” |
| UK negotiations with Brussels are effectively in limbo now, while the Conservative Party choose a new leader to replace prime minister David Cameron. | UK negotiations with Brussels are effectively in limbo now, while the Conservative Party choose a new leader to replace prime minister David Cameron. |
| Related: Gove and Leadsom under pressure as leadership vote picks final two – live | Related: Gove and Leadsom under pressure as leadership vote picks final two – live |
| Yesterday, the pound hit a 31-year low of $1.2798 against the US dollar. Traders around the globe are watching nervously to see how Britain’s relationship with the EU changes following last month’s referendum. | Yesterday, the pound hit a 31-year low of $1.2798 against the US dollar. Traders around the globe are watching nervously to see how Britain’s relationship with the EU changes following last month’s referendum. |
| As El-Erian puts it to Reuters’ Guy Faulconbridge: | As El-Erian puts it to Reuters’ Guy Faulconbridge: |
| The future value of sterling is a function of how and how quickly the structural uncertainty is resolved – if Plan B is delayed and/or it doesn’t involve much of a free trade setup with the EU, it is not inconceivable for sterling to head to parity with the US dollar. | The future value of sterling is a function of how and how quickly the structural uncertainty is resolved – if Plan B is delayed and/or it doesn’t involve much of a free trade setup with the EU, it is not inconceivable for sterling to head to parity with the US dollar. |
| The pound’s record low was $1.05, in late February 1985. | The pound’s record low was $1.05, in late February 1985. |
| There you go…*EL-ERIAN SAYS STERLING MAY FALL TO PARITY W/ USD DOLLAR: RTRS | There you go…*EL-ERIAN SAYS STERLING MAY FALL TO PARITY W/ USD DOLLAR: RTRS |
| However, if a deal is reached to give access to the EU single market, the pound could rally back to pre-vote levels. | However, if a deal is reached to give access to the EU single market, the pound could rally back to pre-vote levels. |
| Many EU leaders have warned that access to the single market means accepting the four freedoms of movement - for goods, services, capital and people. Some Leave campaigners, though, argue that Britain could get access and also impose some restrictions on migration. | Many EU leaders have warned that access to the single market means accepting the four freedoms of movement - for goods, services, capital and people. Some Leave campaigners, though, argue that Britain could get access and also impose some restrictions on migration. |
| More here: Allianz’s El-Erian says UK must urgently get its act together or dollar parity could beckon | More here: Allianz’s El-Erian says UK must urgently get its act together or dollar parity could beckon |
| Updated | Updated |
| at 7.59am BST | at 7.59am BST |
| 7.15am BST | 7.15am BST |
| 07:15 | 07:15 |
| Introduction: More Brexit worries | Introduction: More Brexit worries |
| 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. |
| Coming up today... we’ll be looking at the impact that Britain’s Brexit vote is having on the UK’s economy, and beyond. | Coming up today... we’ll be looking at the impact that Britain’s Brexit vote is having on the UK’s economy, and beyond. |
| Last night, Aberdeen Fund Managers sent a shiver through the City by cutting the value of a property fund by 17% percent and briefly halting redemptions. That came after six commercial property funds froze trading, to prevent a stampede of nervous investors. | Last night, Aberdeen Fund Managers sent a shiver through the City by cutting the value of a property fund by 17% percent and briefly halting redemptions. That came after six commercial property funds froze trading, to prevent a stampede of nervous investors. |
| Could more funds follow today? | Could more funds follow today? |
| Related: More property funds suspended as Brexit tremors continue in the City | Related: More property funds suspended as Brexit tremors continue in the City |
| Financial jitters have hit Australia too, with Standard & Poor’s lowering the country’s credit rating outlook overnight: | Financial jitters have hit Australia too, with Standard & Poor’s lowering the country’s credit rating outlook overnight: |
| Related: Scorn for Morrison's numbers triggers Standard and Poor's negative outlook | Related: Scorn for Morrison's numbers triggers Standard and Poor's negative outlook |
| There’s a flurry of corporate news this morning, including UK retailer Sports Direct and Marks & Spencer. They may be seeing the impact of the EU referendum on their results. | There’s a flurry of corporate news this morning, including UK retailer Sports Direct and Marks & Spencer. They may be seeing the impact of the EU referendum on their results. |
| UK companies posting numbers today - AB Foods, M&S, Sports Direct, Bovis Homes, Great Portland Estates - US - Costco & PepsiCo | UK companies posting numbers today - AB Foods, M&S, Sports Direct, Bovis Homes, Great Portland Estates - US - Costco & PepsiCo |
| Also coming up. | Also coming up. |
| Updated | Updated |
| at 7.22am BST | at 7.22am BST |