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/oct/04/pound-dollar-low-construction-imf-brexit-business-live
The article has changed 16 times. There is an RSS feed of changes available.
| Version 10 | Version 11 |
|---|---|
| Pound hits 31-year low against US dollar, but shares soar – Business Live | Pound hits 31-year low against US dollar, but shares soar – Business Live |
| (35 minutes later) | |
| 4.15pm BST | |
| 16:15 | |
| Some investors who bought shares after the Brexit vote will be cashing in their | |
| hard-earned gains | |
| winnings this afternoon. | |
| So says Michelle McGrade, chief investment officer at online dealing group TD Direct Investing. | |
| “With the FTSE peaking 7,100 this afternoon, our customers are predominantly selling today - demonstrating their savviness. Experienced investors have been buying up since Brexit and seemingly now enjoying the profits. The important thing for the markets is that it holds 7,000 overnight – this will be impacted by how the S&P 500 behaves. | |
| She also urges small investors to be cautious... | |
| “From a broader perspective, we hope that those less experienced investors aren’t getting too excited by the excitement and piling in, for the first time, while it’s high – this isn’t the best investment strategy and they will lose their confidence yet again.” | |
| 4.08pm BST | |
| 16:08 | |
| Ben Chu, the economics editor of the Independent, has done a nice piece about the causes of the pound’s weakness. | |
| He says: | |
| This week’s renewed downward lurch has coincided with Theresa May saying she will trigger Article 50 before next March and making it clear that she will not compromise on curbing EU immigration to the UK, something that strongly implies Britain will be out of the single market by 2019. | |
| The fundamental reason for sterling’s descent is that traders believe there will be lower demand for sterling assets as a result of Brexit – that we will ultimately do less trade with the rest of the world and that we will be poorer as a result. Argue the markets are wrong if you want to – but recognise what they are saying. | |
| The economic reasons the pound is falling. My @IndyVoices column: https://t.co/17GAnZ6Y8C pic.twitter.com/nZGw7SnmTi | |
| 3.57pm BST | |
| 15:57 | |
| Financial reporters are squinting at their terminals, desperate to see if the Footsie hits a record high today (we’re easily amused, to be honest) | |
| Nerves kicking in as #FTSE100 stands 2 points away from all-time high. pic.twitter.com/YBBI8g5HmD | |
| 3.52pm BST | |
| 15:52 | |
| Ooooh the FTSE 100 is pushing even higher as the clock ticks down to 4.30pm. | |
| It just hit 7121 points, a whisker away from the record intraday high of 7122 (set in April 2015). | |
| Oh, and I made a mistake before. The all-time record closing high is 7104. And that record is ON.... | |
| Updated | |
| at 3.52pm BST | |
| 3.41pm BST | 3.41pm BST |
| 15:41 | 15:41 |
| With one hour to go, the FTSE 100 index is just three points away from its record closing high, at 7009 points. | |
| Richard Stone, chief executive at The Share Centre, explains why the weak pound has pushed shares up: | Richard Stone, chief executive at The Share Centre, explains why the weak pound has pushed shares up: |
| For companies in the FTSE100, some three quarters of their revenues are not earned in Sterling so are now worth more in Sterling terms. This makes their profits higher in Sterling and therefore their value in Sterling terms also increases. | For companies in the FTSE100, some three quarters of their revenues are not earned in Sterling so are now worth more in Sterling terms. This makes their profits higher in Sterling and therefore their value in Sterling terms also increases. |
| Updated | |
| at 3.51pm BST | |
| 3.40pm BST | 3.40pm BST |
| 15:40 | 15:40 |
| The IMF’s new report hasn’t helped the pound; it’s still wallowing at the 31-year low of $1.275. | The IMF’s new report hasn’t helped the pound; it’s still wallowing at the 31-year low of $1.275. |
| Betway, the gambling firm, are offering odds on it falling further, and even hitting parity, before the end of the year. | Betway, the gambling firm, are offering odds on it falling further, and even hitting parity, before the end of the year. |
| Lowest GBP/USD rate in 2016: | Lowest GBP/USD rate in 2016: |
| 3.15pm BST | 3.15pm BST |
| 15:15 | 15:15 |
| This won’t please Donald Trump. The IMF thinks the US Federal Reserve was right not to raise interest rates last month. | This won’t please Donald Trump. The IMF thinks the US Federal Reserve was right not to raise interest rates last month. |
| Maurice Obstfeld has told reporters that there’s no sign that the American economy needs to be reined in. | Maurice Obstfeld has told reporters that there’s no sign that the American economy needs to be reined in. |
| He says: | He says: |
| At the moment, inflation is below their target levels,wage pressures are moderate, and so there doesn’t seem to be a great danger of overheating. | At the moment, inflation is below their target levels,wage pressures are moderate, and so there doesn’t seem to be a great danger of overheating. |
| Trump has accused the Fed of keeping rates too low, to help Hillary Clinton win the presidential election. | Trump has accused the Fed of keeping rates too low, to help Hillary Clinton win the presidential election. |
| 2.58pm BST | 2.58pm BST |
| 14:58 | 14:58 |
| Quite a lively press conference.... | Quite a lively press conference.... |
| Asked about the effect of a Trump presidency, IMF chief economist says policy uncertainty not great for investors, employment | Asked about the effect of a Trump presidency, IMF chief economist says policy uncertainty not great for investors, employment |
| Guardian's Larry Elliot asks IMF chief economist on Brexit: "if you're wrong on the short term, why should we trust you on the long run"? | Guardian's Larry Elliot asks IMF chief economist on Brexit: "if you're wrong on the short term, why should we trust you on the long run"? |
| IMF defends Brexit warnings, says UK heading for ‘soft landing’ https://t.co/TamOU3QR0v | IMF defends Brexit warnings, says UK heading for ‘soft landing’ https://t.co/TamOU3QR0v |
| 2.57pm BST | 2.57pm BST |
| 14:57 | 14:57 |
| IMF chief economist Maurice Obstfeld has defended the Fund’s bleak predictions about Brexit. | IMF chief economist Maurice Obstfeld has defended the Fund’s bleak predictions about Brexit. |
| Quizzed by journalists in Washington, Obstfeld says Britain is enjoying a “soft landing”. | Quizzed by journalists in Washington, Obstfeld says Britain is enjoying a “soft landing”. |
| This, he claims, was: | This, he claims, was: |
| “one of our scenarios, and the one we are happier to have seen than the alternative worst scenarios”. | “one of our scenarios, and the one we are happier to have seen than the alternative worst scenarios”. |
| Obstfeld says the weaker pound has provided some support to the economy, by helping exporters. | Obstfeld says the weaker pound has provided some support to the economy, by helping exporters. |
| He also credits the Bank of England with acting quickly to shore up confidence after the referendum result came in. | He also credits the Bank of England with acting quickly to shore up confidence after the referendum result came in. |
| Updated | Updated |
| at 3.06pm BST | at 3.06pm BST |
| 2.55pm BST | 2.55pm BST |
| 14:55 | 14:55 |
| If the IMF are right, Britain’s economy is going to slow pretty sharply next year: | If the IMF are right, Britain’s economy is going to slow pretty sharply next year: |
| Britain will be fastest growing G7 economy this year but good news may not last, says IMF https://t.co/hGkH1t0bJL pic.twitter.com/EfQJWiEDlO | Britain will be fastest growing G7 economy this year but good news may not last, says IMF https://t.co/hGkH1t0bJL pic.twitter.com/EfQJWiEDlO |
| 2.52pm BST | 2.52pm BST |
| 14:52 | 14:52 |
| Chancellor Philip Hammond has opined: | Chancellor Philip Hammond has opined: |
| Here’s my reaction to the IMF World Economic Outlook, published today. pic.twitter.com/ZT461SzyOU | Here’s my reaction to the IMF World Economic Outlook, published today. pic.twitter.com/ZT461SzyOU |
| 2.45pm BST | 2.45pm BST |
| 14:45 | 14:45 |
| Today’s forecasts show that the IMF should be embarrassed about its hand-wringing before June’s referendum, writes Larry Elliott from Washington. | Today’s forecasts show that the IMF should be embarrassed about its hand-wringing before June’s referendum, writes Larry Elliott from Washington. |
| Everybody makes duff forecasts. Everybody gets it wrong from time to time. Only the inveterate fence sitters are spared having egg on their face. | Everybody makes duff forecasts. Everybody gets it wrong from time to time. Only the inveterate fence sitters are spared having egg on their face. |
| The International Monetary Fund certainly knows what it is like to make a mistake. In the run-up to the EU referendum, the IMF made a series of interventions warning voters of the dire consequences that would follow a vote to leave. | The International Monetary Fund certainly knows what it is like to make a mistake. In the run-up to the EU referendum, the IMF made a series of interventions warning voters of the dire consequences that would follow a vote to leave. |
| At first, the IMF stuck to long-term forecasts, saying investment and trade would eventually be weaker if the UK divorced from the other 27 members of the EU. But as the referendum neared and the vote was on a knife-edge, the warnings became more lurid. The UK would immediately start sliding into recession. House prices would crumble. Shares would crash. | At first, the IMF stuck to long-term forecasts, saying investment and trade would eventually be weaker if the UK divorced from the other 27 members of the EU. But as the referendum neared and the vote was on a knife-edge, the warnings became more lurid. The UK would immediately start sliding into recession. House prices would crumble. Shares would crash. |
| So what do you do if your forecasts turn out to be a little wide of the mark? Either you put your hands up and admit you were wrong. Or you brazen it out. You say that it is too early to say. You say that eventually you will come right. | So what do you do if your forecasts turn out to be a little wide of the mark? Either you put your hands up and admit you were wrong. Or you brazen it out. You say that it is too early to say. You say that eventually you will come right. |
| No prizes for guessing which option the IMF has taken. Its half-yearly world economic outlook (WEO) report says the UK will do fine in 2016 but is going to find the going a lot tougher in 2017. | No prizes for guessing which option the IMF has taken. Its half-yearly world economic outlook (WEO) report says the UK will do fine in 2016 but is going to find the going a lot tougher in 2017. |
| This is a perfectly respectable view, and one held by a host of academic, business and City economists. Had the IMF stuck to this sort of assessment throughout the referendum campaign, it would have saved itself embarrassment now. As it is, it will get some stick from those who thought the Washington-based fund had overstepped the mark in its support for the remain camp. | This is a perfectly respectable view, and one held by a host of academic, business and City economists. Had the IMF stuck to this sort of assessment throughout the referendum campaign, it would have saved itself embarrassment now. As it is, it will get some stick from those who thought the Washington-based fund had overstepped the mark in its support for the remain camp. |
| 2.21pm BST | 2.21pm BST |
| 14:21 | 14:21 |
| The IMF singles out the UK’s referendum as a key factor hurting global growth, saying: | The IMF singles out the UK’s referendum as a key factor hurting global growth, saying: |
| “There is a more subdued outlook for advanced economies following the June U.K. vote in favour of leaving the European Union (Brexit) and weaker-than-expected growth in the United States. | “There is a more subdued outlook for advanced economies following the June U.K. vote in favour of leaving the European Union (Brexit) and weaker-than-expected growth in the United States. |
| These developments have put further downward pressure on global interest rates, as monetary policy is now expected to remain accommodative for longer. | These developments have put further downward pressure on global interest rates, as monetary policy is now expected to remain accommodative for longer. |
| It also cites China’s economic rebalancing, and a general slowdown in trade growth since 2012. It blames a “waning pace of trade liberalization and the recent uptick in protectionism”. | It also cites China’s economic rebalancing, and a general slowdown in trade growth since 2012. It blames a “waning pace of trade liberalization and the recent uptick in protectionism”. |
| The full report is online here. | The full report is online here. |
| 2.14pm BST | 2.14pm BST |
| 14:14 | 14:14 |
| Our news story about the IMF’s latest forecasts is here: | Our news story about the IMF’s latest forecasts is here: |
| 2.13pm BST | 2.13pm BST |
| 14:13 | 14:13 |
| The IMF has left its overall global growth forecasts unchanged (compared to July), at 3.1% this year and 3.4% in 2017. | The IMF has left its overall global growth forecasts unchanged (compared to July), at 3.1% this year and 3.4% in 2017. |
| That’s pretty lacklustre in historic terms. | That’s pretty lacklustre in historic terms. |
| Updated | Updated |
| at 2.18pm BST | at 2.18pm BST |
| 2.10pm BST | 2.10pm BST |
| 14:10 | 14:10 |
| The IMF has also taken the scalpel to its forecast for US economic growth. | The IMF has also taken the scalpel to its forecast for US economic growth. |
| It now expects the world’s largest economy to only expand by 1.6% the year, down from 2.2% back in July. | It now expects the world’s largest economy to only expand by 1.6% the year, down from 2.2% back in July. |
| Real story from IMF WEO not so much Brexit as the cut in US growth forecast. I *think* that 0.6% might be the biggest single cut since 2008 | Real story from IMF WEO not so much Brexit as the cut in US growth forecast. I *think* that 0.6% might be the biggest single cut since 2008 |