This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/live/2016/jul/27/uk-gdp-economy-growth-brexit-referendum-pound-markets-live

The article has changed 18 times. There is an RSS feed of changes available.

Version 13 Version 14
Chancellor Hammond claims UK economic fundamentals are strong despite Brexit fears – live updates Chancellor Hammond claims UK economic fundamentals are strong despite Brexit fears – live updates
(about 1 hour later)
4.35pm BST
16:35
Here’s Reuters on the rise in US crude oil stocks:
Oil prices tumbled more than 2 percent on Wednesday, hitting a two-month low, after the U.S. government reported a surprise build in crude and gasoline inventories during the peak summer driving season.
The U.S. Energy Information Administration said domestic crude stockpiles rose 1.7 million barrels, against analysts’ forecasts for a drawdown of 2.3 million barrels.
“A drop in refinery runs at the peak of summer driving season indicate refiners are dialing back amid faltering profit margins,” said Matt Smith, analyst at New York-based oil cargoes tracker Clipperdata.
Refinery crude runs fell 277,000 barrels per day last week as utilization rates fell 0.8 percentage point to 92.4 percent of capacity, EIA data showed.
3.39pm BST3.39pm BST
15:3915:39
Surprise rise in US crude oil stocks
Oil prices are under pressure again after new figures showing a surprise increase in US crude stocks.Oil prices are under pressure again after new figures showing a surprise increase in US crude stocks.
The Energy Information Administration said crude oil stocks rose by 1.67m barrels last week to 521.1m, rather than the 2m fall which had been expected.The Energy Information Administration said crude oil stocks rose by 1.67m barrels last week to 521.1m, rather than the 2m fall which had been expected.
#DOE Report (in mbbls) for Week Ending July 22, 2016 pic.twitter.com/P7I350KKrD#DOE Report (in mbbls) for Week Ending July 22, 2016 pic.twitter.com/P7I350KKrD
Oil under significant pressure post DoE data. Not only surprising headline build (+1.67mln) but US production up for 3rd straight week #OOTTOil under significant pressure post DoE data. Not only surprising headline build (+1.67mln) but US production up for 3rd straight week #OOTT
#Brent oil inventories build - oops pic.twitter.com/URLVwSyWTs#Brent oil inventories build - oops pic.twitter.com/URLVwSyWTs
UpdatedUpdated
at 3.40pm BST at 4.30pm BST
2.59pm BST2.59pm BST
14:5914:59
Wall Street opens higherWall Street opens higher
US markets are off to a positive start, lifted by better than expected results from Apple and ahead of the Federal Reserve meeting.US markets are off to a positive start, lifted by better than expected results from Apple and ahead of the Federal Reserve meeting.
The Dow Jones Industrial Average is currently up 56 points or 0.3%, while the S&P 500 is up 0.16% and Nasdaq is 0.63% better.The Dow Jones Industrial Average is currently up 56 points or 0.3%, while the S&P 500 is up 0.16% and Nasdaq is 0.63% better.
2.29pm BST2.29pm BST
14:2914:29
Earlier in the US came some evidence of economic weakness, ahead of the Federal Reserve interest rate decision.Earlier in the US came some evidence of economic weakness, ahead of the Federal Reserve interest rate decision.
Orders for durable goods - long lasting items ranging from toasters to aircraft - fell 4% month on month in June, the biggest drop since August 2014. May’s initial reading of a 2.3% drop was revised downwards to a 2.8% fall.Orders for durable goods - long lasting items ranging from toasters to aircraft - fell 4% month on month in June, the biggest drop since August 2014. May’s initial reading of a 2.3% drop was revised downwards to a 2.8% fall.
Rob Carnell, chief international economist at ING Bank, said:Rob Carnell, chief international economist at ING Bank, said:
The volatile durable goods orders data fell again in June by 4.0% month on month, following a 2.8% decline in May. This matters because goods orders are one of the ways we can track business investment over the quarter. With the quarter now complete, the picture for business investment in the second quarter of 2016, following 2 previous quarters of decline, remains poor.The volatile durable goods orders data fell again in June by 4.0% month on month, following a 2.8% decline in May. This matters because goods orders are one of the ways we can track business investment over the quarter. With the quarter now complete, the picture for business investment in the second quarter of 2016, following 2 previous quarters of decline, remains poor.
More accurate yardsticks for business investment than the headline orders series, are the trend series for core orders and shipments. Core (ex defence and aircraft) orders accelerated their decline on a 3-month annualised basis in June. But the equivalent figure for shipments fell at a slower pace, though remained negative.More accurate yardsticks for business investment than the headline orders series, are the trend series for core orders and shipments. Core (ex defence and aircraft) orders accelerated their decline on a 3-month annualised basis in June. But the equivalent figure for shipments fell at a slower pace, though remained negative.
We think this suggests a flat business investment figure in the second quarter of 2016 - or something close to flat - and this would be a slight improvement on the fourth quarter of 2015 and the first quarter of 2016.We think this suggests a flat business investment figure in the second quarter of 2016 - or something close to flat - and this would be a slight improvement on the fourth quarter of 2015 and the first quarter of 2016.
We had not expected much more than this, but nonetheless, our 2.8% quarter on quarter forecast for second quarter GDP growth might now be a couple of tenths too high, assuming we have all our other subcomponents correct.We had not expected much more than this, but nonetheless, our 2.8% quarter on quarter forecast for second quarter GDP growth might now be a couple of tenths too high, assuming we have all our other subcomponents correct.
This would still leave second quarter 2016 GDP at about 2.5% - a marked improvement on 1.1% in the first quarter, and will help hawkish Fed members argue that the Fed should not hold its fire for too much longer before hiking rates again. The domestic economy does seem to have recovered some of its momentum since late 2015 / early 2016, and international political developments and market uncertainty are now the main deterrents to further fed tightening.This would still leave second quarter 2016 GDP at about 2.5% - a marked improvement on 1.1% in the first quarter, and will help hawkish Fed members argue that the Fed should not hold its fire for too much longer before hiking rates again. The domestic economy does seem to have recovered some of its momentum since late 2015 / early 2016, and international political developments and market uncertainty are now the main deterrents to further fed tightening.
2.21pm BST2.21pm BST
14:2114:21
FTSE 250 regains all post-Brexit vote lossesFTSE 250 regains all post-Brexit vote losses
The FTSE 100 is not the only index to be boosted by the news of better than expected UK GDP figures and, perhaps more pertinently, an interest rate cut from the Bank of England next week to try and stall a post-Brexit downturn.The FTSE 100 is not the only index to be boosted by the news of better than expected UK GDP figures and, perhaps more pertinently, an interest rate cut from the Bank of England next week to try and stall a post-Brexit downturn.
The leading index is now at its highest level for more than a year - the best since 20 July 2015.The leading index is now at its highest level for more than a year - the best since 20 July 2015.
Meanwhile the FTSE 250, which is more focused on the UK domestic economy than the 100 index, has regained all the losses it suffered since the Brexit result.Meanwhile the FTSE 250, which is more focused on the UK domestic economy than the 100 index, has regained all the losses it suffered since the Brexit result.
The mid-cap index is up 1.6% at 17,354, compared to the 17,333 level it reached on the day of the referendum.The mid-cap index is up 1.6% at 17,354, compared to the 17,333 level it reached on the day of the referendum.
2.13pm BST2.13pm BST
14:1314:13
Lunchtime summary: Growth beats forecasts, but....Lunchtime summary: Growth beats forecasts, but....
A quick recap.A quick recap.
Fears that Britain’s economy stalled in the run-up to the EU referendum have eased a little, after growth in the second quarter of 2016 beat forecasts.Fears that Britain’s economy stalled in the run-up to the EU referendum have eased a little, after growth in the second quarter of 2016 beat forecasts.
UK GDO rose by 0.6% in April-June, the ONS reported, thanks to the biggest jump in industrial output since 1999.UK GDO rose by 0.6% in April-June, the ONS reported, thanks to the biggest jump in industrial output since 1999.
That beats forecasts of 0.4% growth, and means Britain’s economy is 7.7% larger than before the 2008 crash.That beats forecasts of 0.4% growth, and means Britain’s economy is 7.7% larger than before the 2008 crash.
Details:Details:
Chancellor Philip Hammond has declared that the figures show Britain’s economic fundamentals are robust, as it enters a world of Brexit uncertainty. He can also point to plans to invest more than £300m in London City Airport.Chancellor Philip Hammond has declared that the figures show Britain’s economic fundamentals are robust, as it enters a world of Brexit uncertainty. He can also point to plans to invest more than £300m in London City Airport.
But many economists have warned that the economy is probably now shrinking. It could even fall into recession, if Britain gets a serious bout of Brexit blues.But many economists have warned that the economy is probably now shrinking. It could even fall into recession, if Britain gets a serious bout of Brexit blues.
There’s also concern that most of the growth occurred in April, before dropping off in May. The report has little detail on how the economy fared in the immediate run-up to the June 23 referendum either.There’s also concern that most of the growth occurred in April, before dropping off in May. The report has little detail on how the economy fared in the immediate run-up to the June 23 referendum either.
Worryingly, UK retail sales have tumbled at the fastest rate since January 2012 this month.Worryingly, UK retail sales have tumbled at the fastest rate since January 2012 this month.
And Ireland’s central bank has cut its growth forecasts for 2016 and 2017, due to the impact caused by the EU referendum vote.And Ireland’s central bank has cut its growth forecasts for 2016 and 2017, due to the impact caused by the EU referendum vote.
But City traders are in upbeat move, sending the FTSE up by 49 points to 6773 -- a new 11-month high. They’re expecting a fresh bout of stimulus from the Bank of Japan soon, followed by a UK interest rate cut next week.But City traders are in upbeat move, sending the FTSE up by 49 points to 6773 -- a new 11-month high. They’re expecting a fresh bout of stimulus from the Bank of Japan soon, followed by a UK interest rate cut next week.
Markets are now pricing in a 100% probability of a BoE August rate cut https://t.co/fEkhOOf6Hk pic.twitter.com/38FKBRykdCMarkets are now pricing in a 100% probability of a BoE August rate cut https://t.co/fEkhOOf6Hk pic.twitter.com/38FKBRykdC
2.02pm BST2.02pm BST
14:0214:02
Fast food chain McDonalds has just announced plans to hire thousands more workers in the UK; suggesting it is also confident about future prospects.Fast food chain McDonalds has just announced plans to hire thousands more workers in the UK; suggesting it is also confident about future prospects.
#McDonald's has announced it will create over 5,000 UK jobs by the end of 2017 taking the workforce to over 110,000#McDonald's has announced it will create over 5,000 UK jobs by the end of 2017 taking the workforce to over 110,000
We were told Brexit would lead to sharp rise in unemployment. @McDonaldsUK is recruiting. https://t.co/6XvaLlLYdAWe were told Brexit would lead to sharp rise in unemployment. @McDonaldsUK is recruiting. https://t.co/6XvaLlLYdA
UpdatedUpdated
at 2.04pm BSTat 2.04pm BST
1.34pm BST1.34pm BST
13:3413:34
Our economics editor, Larry Elliott, reckons that Philip Hammond knows full well that Britain’s economy is entering turbulent times:Our economics editor, Larry Elliott, reckons that Philip Hammond knows full well that Britain’s economy is entering turbulent times:
He writes:He writes:
The Brexit result was unexpected and has, judging by the surveys since, affected the outlook for both the services and manufacturing sectors. Construction was the one sector that was already struggling in the buildup to the vote and is likely to face an even tougher winter than the rest of the economy.The Brexit result was unexpected and has, judging by the surveys since, affected the outlook for both the services and manufacturing sectors. Construction was the one sector that was already struggling in the buildup to the vote and is likely to face an even tougher winter than the rest of the economy.
Growth is going to slow down markedly from now on. The length and depth of that slowdown will depend on how quickly businesses regain their equilibrium. The Bank of England knows that, which is why a big package of measures designed to boost confidence will be announced next week.Growth is going to slow down markedly from now on. The length and depth of that slowdown will depend on how quickly businesses regain their equilibrium. The Bank of England knows that, which is why a big package of measures designed to boost confidence will be announced next week.
More here:More here:
Related: UK growth will slow down markedly, despite upbeat GDP figuresRelated: UK growth will slow down markedly, despite upbeat GDP figures
12.46pm BST12.46pm BST
12:4612:46
Here’s more City reaction to the growth figures.Here’s more City reaction to the growth figures.
U.K. Q2 GDP 0.6% showed economy doing ok upto ref, as lead indicators suggested. Same leading ind now going south, so watch closely @afneilU.K. Q2 GDP 0.6% showed economy doing ok upto ref, as lead indicators suggested. Same leading ind now going south, so watch closely @afneil
Useful chart from Capital Economics underlines that basically all the net GDP growth in Q2 happened in April pic.twitter.com/sJDwgjQQoQUseful chart from Capital Economics underlines that basically all the net GDP growth in Q2 happened in April pic.twitter.com/sJDwgjQQoQ
UK economy picks up speed in second quarter but signs of slowdown appear. More here: https://t.co/n98va2k9WM pic.twitter.com/g9h7qVdph4UK economy picks up speed in second quarter but signs of slowdown appear. More here: https://t.co/n98va2k9WM pic.twitter.com/g9h7qVdph4
12.31pm BST12.31pm BST
12:3112:31
Retail sales take a tumbleRetail sales take a tumble
Bad news: UK retail sales have fallen at the fastest pace in over four years in July this month.Bad news: UK retail sales have fallen at the fastest pace in over four years in July this month.
The latest survey, from the CBI, bolsters concerns that the economy is weakening fast - unravelling the solid growth in the last quarter.The latest survey, from the CBI, bolsters concerns that the economy is weakening fast - unravelling the solid growth in the last quarter.
Some 24% of retailers said that sales volumes were up in July compared with a year earlier, while 38% said they were down, giving a rounded balance of -14%. That’s the weakest reading since January 2012.Some 24% of retailers said that sales volumes were up in July compared with a year earlier, while 38% said they were down, giving a rounded balance of -14%. That’s the weakest reading since January 2012.
The CBI says:The CBI says:
Within retail, sales by grocers, and furniture and carpets stores were the main drivers of the drop in overall volumes. But some sectors bucked the trend, with non-specialised department stores and retailers of footwear and leather goods reporting higher volumes.Within retail, sales by grocers, and furniture and carpets stores were the main drivers of the drop in overall volumes. But some sectors bucked the trend, with non-specialised department stores and retailers of footwear and leather goods reporting higher volumes.
Sam Tombs of Pantheon Economics says it’s worrying news:Sam Tombs of Pantheon Economics says it’s worrying news:
First retail survey solely covering the post-ref period and guess what? It's collapsed. CBI reported sales bal. at lowest level since Jan 12First retail survey solely covering the post-ref period and guess what? It's collapsed. CBI reported sales bal. at lowest level since Jan 12
12.03pm BST12.03pm BST
12:0312:03
Ireland slashes growth forecasts after Brexit voteIreland slashes growth forecasts after Brexit vote
Lisa O'CarrollLisa O'Carroll
Ireland’s Central Bank has downgraded its forecasts for GDP growth for 2016 and 2017 citing the adverse affect of Brexit on the economy.Ireland’s Central Bank has downgraded its forecasts for GDP growth for 2016 and 2017 citing the adverse affect of Brexit on the economy.
Britain is Ireland’s biggest export partner while Ireland is Britain’s fifth biggest trading partner with €1.5bn in transactions a week.Britain is Ireland’s biggest export partner while Ireland is Britain’s fifth biggest trading partner with €1.5bn in transactions a week.
The Central Bank said it believed the Irish economy, which is one of the fastest growing in Europe, would continue to grow but that Brexit was negative for the economy.The Central Bank said it believed the Irish economy, which is one of the fastest growing in Europe, would continue to grow but that Brexit was negative for the economy.
It said it expected a prolonged period of uncertainty while the UK was negotiating its Brexit package which would damage investor confidence.It said it expected a prolonged period of uncertainty while the UK was negotiating its Brexit package which would damage investor confidence.
In a statement Ireland’s Central Bank chief economist, Gabriel Fagan, said while the economy’s reliance on the British export market had weakened over recent decades.In a statement Ireland’s Central Bank chief economist, Gabriel Fagan, said while the economy’s reliance on the British export market had weakened over recent decades.
However...However...
“Some sectors, including agri-food, clothing, footwear and tourism continue to have a relatively high dependency on exports to the UK and, consequently, could be affected disproportionately”.“Some sectors, including agri-food, clothing, footwear and tourism continue to have a relatively high dependency on exports to the UK and, consequently, could be affected disproportionately”.
Tourism is expected to take a particular hit because of the weakened pound.Tourism is expected to take a particular hit because of the weakened pound.
Among Ireland’s top 10 exports to Britain are food and drink and packaged medicines while the UK’s exports to Britain including gas, cars and pharmaceuticals.Among Ireland’s top 10 exports to Britain are food and drink and packaged medicines while the UK’s exports to Britain including gas, cars and pharmaceuticals.
Edgar Morganrath, associate research professor at Dublin’s Economic and Social Research Institute has said that custom paperwork could add three to four per cent on costs for exporters to the UK, in line with additional costs of exporting to non-EU territories including US and Canada.Edgar Morganrath, associate research professor at Dublin’s Economic and Social Research Institute has said that custom paperwork could add three to four per cent on costs for exporters to the UK, in line with additional costs of exporting to non-EU territories including US and Canada.
Here’s the full reportHere’s the full report
UpdatedUpdated
at 12.25pm BSTat 12.25pm BST
11.53am BST11.53am BST
11:5311:53
Britain’s growth since the crisis is less impressive once you adjust for the increase in population:Britain’s growth since the crisis is less impressive once you adjust for the increase in population:
On a per-capita basis, the economy is only 1.3% bigger than in 2008, not the 7.7% headline increase report today.On a per-capita basis, the economy is only 1.3% bigger than in 2008, not the 7.7% headline increase report today.
Matthew Whittaker of the Resolution Foundation shows how this is much worse than in previous recessions:Matthew Whittaker of the Resolution Foundation shows how this is much worse than in previous recessions:
Q2 2016 @ONS data shows GDP per head 1.3% above Q407 peak. Much lower than at the same point post-80 & 90 recessions pic.twitter.com/Wkz5YjRuKyQ2 2016 @ONS data shows GDP per head 1.3% above Q407 peak. Much lower than at the same point post-80 & 90 recessions pic.twitter.com/Wkz5YjRuKy
UpdatedUpdated
at 11.59am BSTat 11.59am BST
11.36am BST11.36am BST
11:3611:36
Andy Bruce of Reuters has highlighted how April provided the bulk of the growth in the last quarter:Andy Bruce of Reuters has highlighted how April provided the bulk of the growth in the last quarter:
Strong Q2 UK #GDP? Actually it's really just an April surge followed by... not a lot else. pic.twitter.com/hofSo9kEx7Strong Q2 UK #GDP? Actually it's really just an April surge followed by... not a lot else. pic.twitter.com/hofSo9kEx7
11.22am BST11.22am BST
11:2211:22
If you’re just tuning in, here’s our news story on today’s growth figures:If you’re just tuning in, here’s our news story on today’s growth figures:
Related: UK economy grew by 0.6% before Brexit voteRelated: UK economy grew by 0.6% before Brexit vote
11.13am BST11.13am BST
11:1311:13
Andrew Sentance, senior economic adviser at PwC, fears that Britain’s economy is entering a period of weak growth, despite the forecast-beating performance in the last quarter:Andrew Sentance, senior economic adviser at PwC, fears that Britain’s economy is entering a period of weak growth, despite the forecast-beating performance in the last quarter:
“The pick up in growth in the UK in the second quarter is consistent with other data - for employment, retail sales and yesterday’s CBI survey of manufacturers.“The pick up in growth in the UK in the second quarter is consistent with other data - for employment, retail sales and yesterday’s CBI survey of manufacturers.
“However, we also know that the EU Referendum result has sent a shockwave through the business world and we should expect much slower growth this quarter - the main scenario in our latest PwC Economic Outlook suggests growth slowing to around 1.6% this year. 2017 is likely to see even more sluggish growth - our central view is for GDP to increase by just 0.6% next year.“However, we also know that the EU Referendum result has sent a shockwave through the business world and we should expect much slower growth this quarter - the main scenario in our latest PwC Economic Outlook suggests growth slowing to around 1.6% this year. 2017 is likely to see even more sluggish growth - our central view is for GDP to increase by just 0.6% next year.
11.03am BST11.03am BST
11:0311:03
Once upon a time, Britain’s chancellor would have celebrated today’s growth figures by donning a florescent jacket and building a wall.Once upon a time, Britain’s chancellor would have celebrated today’s growth figures by donning a florescent jacket and building a wall.
But Philip Hammond doesn’t shares George Osborne’s love of hard hats; so he’s decamped to London City Airport this morning.But Philip Hammond doesn’t shares George Osborne’s love of hard hats; so he’s decamped to London City Airport this morning.
He’s there to announce a £344m expansion programme for the airport, meaning more space for planes and an enlarged terminal to house extra passengers.He’s there to announce a £344m expansion programme for the airport, meaning more space for planes and an enlarged terminal to house extra passengers.
10.39am BST10.39am BST
10:3910:39
Today’s report shows that “dire predictions” that the economy would grind to a halt before the EU referendum were false, says Peter Rosenstreich of Swissquote Bank.Today’s report shows that “dire predictions” that the economy would grind to a halt before the EU referendum were false, says Peter Rosenstreich of Swissquote Bank.
In actuality, growth accelerated as business raced ahead of the uncertain vote (lead by industrial output). This unexpected read indicates that the UK economy was in stronger position ahead of the vote then originally forecasted.In actuality, growth accelerated as business raced ahead of the uncertain vote (lead by industrial output). This unexpected read indicates that the UK economy was in stronger position ahead of the vote then originally forecasted.
But Rosenstreich also fears Britain could now fall into recession:But Rosenstreich also fears Britain could now fall into recession:
However, this preliminary estimate does not capture the post referendum fallout, which is likely to drive Q3 lower, possibly into recession. We remain bearish on the British pound as the UK economy will clearly go through a period of economic adjustment and likely BoE interest rate cuts.”However, this preliminary estimate does not capture the post referendum fallout, which is likely to drive Q3 lower, possibly into recession. We remain bearish on the British pound as the UK economy will clearly go through a period of economic adjustment and likely BoE interest rate cuts.”
UpdatedUpdated
at 10.39am BSTat 10.39am BST
10.38am BST10.38am BST
10:3810:38
One decent quarter doesn’t mean Britain’s industrial sector has roared back, points out Ben Chu of the Independent:One decent quarter doesn’t mean Britain’s industrial sector has roared back, points out Ben Chu of the Independent:
Here's that Q2 surge in manufacturing and industrial production in a post 2008 levels context: pic.twitter.com/zHVCZECEgeHere's that Q2 surge in manufacturing and industrial production in a post 2008 levels context: pic.twitter.com/zHVCZECEge