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CBI signals strong end to the year for UK manufacturers - business live CBI signals strong end to the year for UK manufacturers - business live
(35 minutes later)
4.44pm GMT
16:44
More on S&P maintaining its Triple A rating on Germany. The agency said:
We think Germany’s highly diversified and competitive economy will continue to sustain its current growth momentum, backed by strong domestic demand and resilient exports against an increasingly challenging international backdrop.
Germany’s surpluses on its external and fiscal balance sheet will enable the country to weather external shocks, while ultralow interest rates and strong tax revenue growth continue to benefit its public-sector balance sheet.
We are affirming our ‘AAA’ long-term and ‘A-1+’ short-term sovereign credit ratings on Germany.
The stable outlook reflects our view that over the next two years Germany’s public finances and strong external balance sheet will continue to withstand potential financial and economic shocks.
4.37pm GMT
16:37
S&P affirms Germany AAA, Outlook Stable
4.06pm GMT4.06pm GMT
16:0616:06
Markets remain in positive territory, although they are off their best levels. But the recent rally could continue next week, analysts believe. Chris Beauchamp, chief market analyst at IG, said:Markets remain in positive territory, although they are off their best levels. But the recent rally could continue next week, analysts believe. Chris Beauchamp, chief market analyst at IG, said:
The week ends with gains across the board, although the Dow Jones remains tantalisingly short of the 20,000 target. Still, a good performance from the Russell 2000 this afternoon bodes well for the week ahead. Santa definitely arrived early this year, but perhaps we’ll get another rally next week. The FTSE seems happy enough to move above 7000, and it is entirely plausible that the index will touch new all-time highs before everyone sets off for Christmas. It will just require a little sprinkling of festive spirit, and hopefully a good performance from miners, which have been a little under pressure since the Fed announced its plan to raise rates three times next year.The week ends with gains across the board, although the Dow Jones remains tantalisingly short of the 20,000 target. Still, a good performance from the Russell 2000 this afternoon bodes well for the week ahead. Santa definitely arrived early this year, but perhaps we’ll get another rally next week. The FTSE seems happy enough to move above 7000, and it is entirely plausible that the index will touch new all-time highs before everyone sets off for Christmas. It will just require a little sprinkling of festive spirit, and hopefully a good performance from miners, which have been a little under pressure since the Fed announced its plan to raise rates three times next year.
The coming week is not exactly busy, as might be expected, but one area of interest will be the Bank of Japan. The yen has taken a hammering since the election, which has done wonders for the Japanese stock market, but we should not rule out a statement that gives the currency a breathing space. Everyone seems to be long the US dollar, so it wouldn’t take much of a change to spark some interesting moves in the week ahead.The coming week is not exactly busy, as might be expected, but one area of interest will be the Bank of Japan. The yen has taken a hammering since the election, which has done wonders for the Japanese stock market, but we should not rule out a statement that gives the currency a breathing space. Everyone seems to be long the US dollar, so it wouldn’t take much of a change to spark some interesting moves in the week ahead.
3.36pm GMT3.36pm GMT
15:3615:36
Oil is moving higher on hopes that producers will stick to their deal to cut output.Oil is moving higher on hopes that producers will stick to their deal to cut output.
Ahead of the latest Baker Hughes survey of US rigs, Brent crude has climbed 1.7% to $54.94 a barrel and West Texas Intermediate is up 1.57% to $51.70 as Russia said all of its oil companies had agreed to reduce output.Ahead of the latest Baker Hughes survey of US rigs, Brent crude has climbed 1.7% to $54.94 a barrel and West Texas Intermediate is up 1.57% to $51.70 as Russia said all of its oil companies had agreed to reduce output.
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at 3.37pm GMTat 3.37pm GMT
3.05pm GMT3.05pm GMT
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Helena SmithHelena Smith
Back with Greece, and ahead of the Merkel-Tsipras meeting, the German finance ministry has said an assessment report on Tsipras’ surprise relief package is not going to make for rosy reading, reports Helena Smith:Back with Greece, and ahead of the Merkel-Tsipras meeting, the German finance ministry has said an assessment report on Tsipras’ surprise relief package is not going to make for rosy reading, reports Helena Smith:
Athens’ lender institutions have assembled a report into whether the Greek prime minister’s unilateral measures violate his country’s bailout obligations and while preliminary “it is quite critical,” a German finance ministry announced today.Athens’ lender institutions have assembled a report into whether the Greek prime minister’s unilateral measures violate his country’s bailout obligations and while preliminary “it is quite critical,” a German finance ministry announced today.
The report, requested by Berlin, will be evaluated in full next week. Particular focus will be paid to Tsipras’ surprise bonanza for low-income pensioners in the form of a pre-Christmas bonus, in effect a 13th payment.The report, requested by Berlin, will be evaluated in full next week. Particular focus will be paid to Tsipras’ surprise bonanza for low-income pensioners in the form of a pre-Christmas bonus, in effect a 13th payment.
Germany’s hardline stance – at least from it’s uncompromising finance minister Wolfgang Schäuble - has triggered mounting speculation that the politician is now bent on ousting the leftist leader and replacing him with the head of the main opposition centre right New Democracy party, Kyriakos Mitsotakis.Germany’s hardline stance – at least from it’s uncompromising finance minister Wolfgang Schäuble - has triggered mounting speculation that the politician is now bent on ousting the leftist leader and replacing him with the head of the main opposition centre right New Democracy party, Kyriakos Mitsotakis.
“It is obvious that [he] wants to overturn the government and replace it with one that has New Democracy at its core,” said Stelios Kouloglou, a Euro MP representing Greece’s governing Syriza party. “After [French president] Hollande … and [Italian PM] Renzi he wants to be done with whatever trace of the left has remained in Europe.”“It is obvious that [he] wants to overturn the government and replace it with one that has New Democracy at its core,” said Stelios Kouloglou, a Euro MP representing Greece’s governing Syriza party. “After [French president] Hollande … and [Italian PM] Renzi he wants to be done with whatever trace of the left has remained in Europe.”
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at 3.17pm GMTat 3.17pm GMT
2.47pm GMT2.47pm GMT
14:4714:47
Wall Street opens higherWall Street opens higher
US markets are heading higher as the expectation of stimulus measures from the new President continues to provide support.US markets are heading higher as the expectation of stimulus measures from the new President continues to provide support.
The three main indices are on track for weekly rises and are all near record highs, even as the Federal Reserve raised interest rates and hinted at three more to come in 2017. The Dow Jones Industrial Average, currently up 42 points at 19,894, is close to breaching the 20,000 barrier for the first time. Meanwhile the S&P 500 has opened up 0.2% while the Nasdaq Composite is 0.26% higher. Michael Hewson, chief market analyst at CMC Markets UK, said:The three main indices are on track for weekly rises and are all near record highs, even as the Federal Reserve raised interest rates and hinted at three more to come in 2017. The Dow Jones Industrial Average, currently up 42 points at 19,894, is close to breaching the 20,000 barrier for the first time. Meanwhile the S&P 500 has opened up 0.2% while the Nasdaq Composite is 0.26% higher. Michael Hewson, chief market analyst at CMC Markets UK, said:
The big question on most people’s lips at the moment is whether the Dow can manage to nibble away at the 20,000 level that it has been flirting with this week. Thus far it has fallen short and the likelihood is that the opportunity to do it this week has passed.The big question on most people’s lips at the moment is whether the Dow can manage to nibble away at the 20,000 level that it has been flirting with this week. Thus far it has fallen short and the likelihood is that the opportunity to do it this week has passed.
Even if we fall short we’ve still seen a decent week for US equities, trading as they continue to do at record levels. The big question is how a strong US dollar and a strong US equity market can co-exist at a time when all we have had at the moment is promises of fiscal action, and higher rates.Even if we fall short we’ve still seen a decent week for US equities, trading as they continue to do at record levels. The big question is how a strong US dollar and a strong US equity market can co-exist at a time when all we have had at the moment is promises of fiscal action, and higher rates.
Since the 8th November the Dow has rallied 9%, the S&P 00 over 6% and the Russell 2000 has gained over 14%; how much of market expectations of what President elect Trump can deliver are now priced in?Since the 8th November the Dow has rallied 9%, the S&P 00 over 6% and the Russell 2000 has gained over 14%; how much of market expectations of what President elect Trump can deliver are now priced in?
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at 2.49pm GMTat 2.49pm GMT
2.33pm GMT2.33pm GMT
14:3314:33
The typical UK household spends more than £2,000 a month, but in December - in the run-up to Christmas - it spends an extra £500, according to the Bank of England.The typical UK household spends more than £2,000 a month, but in December - in the run-up to Christmas - it spends an extra £500, according to the Bank of England.
And the biggest increase is not, as you might expect, on alcohol but on books, the Bank says.And the biggest increase is not, as you might expect, on alcohol but on books, the Bank says.
And over the past three years, the value of online shopping has doubled, and now accounts for £1 in every £8 spent.And over the past three years, the value of online shopping has doubled, and now accounts for £1 in every £8 spent.
How much more do we spend at #Christmas? https://t.co/M57brEOCzf #BoEknowledgebank pic.twitter.com/yLlYHMQWJlHow much more do we spend at #Christmas? https://t.co/M57brEOCzf #BoEknowledgebank pic.twitter.com/yLlYHMQWJl
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at 2.37pm GMTat 2.37pm GMT
2.03pm GMT2.03pm GMT
14:0314:03
Weak US housing figuresWeak US housing figures
US housing starts fell by more than expected in November, falling from a nine year high.US housing starts fell by more than expected in November, falling from a nine year high.
They dropped 18.7% to a seasonally adjusted annual rate of 1.09m units, below expectations of a figure of 1.23m. October’s number was revised up from 1.32m to 1.34m, the highest since July 2007.They dropped 18.7% to a seasonally adjusted annual rate of 1.09m units, below expectations of a figure of 1.23m. October’s number was revised up from 1.32m to 1.34m, the highest since July 2007.
1.50pm GMT1.50pm GMT
13:5013:50
More on Greece, and some comments from Greek prime minister Alexis Tsipras and German chancellor Angela Merkel ahead of their talks.More on Greece, and some comments from Greek prime minister Alexis Tsipras and German chancellor Angela Merkel ahead of their talks.
Tsipras has said he would tell the chancellor about the positive momentum in the Greek economy and the “spectacular overachievement of revenue targets.”Tsipras has said he would tell the chancellor about the positive momentum in the Greek economy and the “spectacular overachievement of revenue targets.”
Greek PM Tsipras: Growth in Greece must heal wounds from previous austerity, we can't allow Greece to go back to uncertainty -RtrsGreek PM Tsipras: Growth in Greece must heal wounds from previous austerity, we can't allow Greece to go back to uncertainty -Rtrs
Merkel expects no decisions on Greek bailout at talks with Tsipras https://t.co/ReeNpl2dnvMerkel expects no decisions on Greek bailout at talks with Tsipras https://t.co/ReeNpl2dnv
Meanwhile, another possible hurdle for Greece to overcome:Meanwhile, another possible hurdle for Greece to overcome:
Der Spiegel reporting that #IMF wll delay #Greece bailout decision til spring, allowing time for Trump to get lay of the land. ~@AlexRPigmanDer Spiegel reporting that #IMF wll delay #Greece bailout decision til spring, allowing time for Trump to get lay of the land. ~@AlexRPigman
Heavy bombshell from #IMF, if @DerSpiegel report true. Will create major repercussions both on economic and political level for #Greece.Heavy bombshell from #IMF, if @DerSpiegel report true. Will create major repercussions both on economic and political level for #Greece.
1.00pm GMT1.00pm GMT
13:0013:00
European markets are at 11-month highs, partly on the back of a weaker euro and expectations for stronger growth in the US next year.European markets are at 11-month highs, partly on the back of a weaker euro and expectations for stronger growth in the US next year.
Reuters quotes Markus Huber, trader at City of London Markets:Reuters quotes Markus Huber, trader at City of London Markets:
Stocks are continuing to get a boost from a weaker euro and the notion that the United States, the world’s largest economy, will experience an uptick in growth once President-elect Donald Trump has started implementing his new policies.Stocks are continuing to get a boost from a weaker euro and the notion that the United States, the world’s largest economy, will experience an uptick in growth once President-elect Donald Trump has started implementing his new policies.
12.31pm GMT12.31pm GMT
12:3112:31
Europe’s main markets are up across the board:Europe’s main markets are up across the board:
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at 2.07pm GMTat 2.07pm GMT
12.05pm GMT12.05pm GMT
12:0512:05
Bank of Greece calls for an end to the standoff with creditorsBank of Greece calls for an end to the standoff with creditors
Greece’s central bank has appealed for an end to the standoff between the government and the country’s creditors.Greece’s central bank has appealed for an end to the standoff between the government and the country’s creditors.
If follows the decision by prime minister Alexis Tsipras to award low income pensioners with a pre-Christmas bonus - a move which angered Greece’s international lenders.If follows the decision by prime minister Alexis Tsipras to award low income pensioners with a pre-Christmas bonus - a move which angered Greece’s international lenders.
The Guardian’s Helena Smith reports from Athens:The Guardian’s Helena Smith reports from Athens:
Hours after the Greek parliament approved Tsipras’ package of relief measures, the country’s central bank has stepped in, urging an end to the dispute and appealing for differences to be “worked out at the negotiations table in a genuine spirit of co-operation with the institutions and our partners.”Hours after the Greek parliament approved Tsipras’ package of relief measures, the country’s central bank has stepped in, urging an end to the dispute and appealing for differences to be “worked out at the negotiations table in a genuine spirit of co-operation with the institutions and our partners.”
Predicting the economy will expand by 2.5% next year – a jump from just 0.1 % this year - the Bank of Greece called for “pragmatism and flexibility” in its interim monetary policy report released today.Predicting the economy will expand by 2.5% next year – a jump from just 0.1 % this year - the Bank of Greece called for “pragmatism and flexibility” in its interim monetary policy report released today.
This emerging positive momentum in the economy needs to be supported and consolidated through adherence to the programme targets and an accelerated implementation of the reforms and privatisations agreed on.This emerging positive momentum in the economy needs to be supported and consolidated through adherence to the programme targets and an accelerated implementation of the reforms and privatisations agreed on.
Specifically, the Bank of Greece expects GDP to grow by a marginal 0.1% in 2016, before picking up to 2.5 % in 2017 and further to 3% in 2018 and 2019, supported by investment, consumption and exports.Specifically, the Bank of Greece expects GDP to grow by a marginal 0.1% in 2016, before picking up to 2.5 % in 2017 and further to 3% in 2018 and 2019, supported by investment, consumption and exports.
But an ongoing review of the debt-stricken country’s creditor-mandated reforms would have to be wrapped up quickly, the bank said, so that Greece could take the next step towards inclusion in the European Central Bank’s QE bond-buying programme.But an ongoing review of the debt-stricken country’s creditor-mandated reforms would have to be wrapped up quickly, the bank said, so that Greece could take the next step towards inclusion in the European Central Bank’s QE bond-buying programme.
There is not much time left, in the light of upcoming national elections in a number of euro area countries.There is not much time left, in the light of upcoming national elections in a number of euro area countries.
Progress, it added, would be easier if lenders also agreed to lower expectations of Athens achieving a primary budget surplus of 3.5 % by 2018.Progress, it added, would be easier if lenders also agreed to lower expectations of Athens achieving a primary budget surplus of 3.5 % by 2018.
Tsipras is expected to raise this issue – and the decision by the euro zone’s bailout agency, or ESM, to put short-term debt relief measures for Athens on hold - when he holds talks with German chancellor Angela Merkel in Berlin this evening.Tsipras is expected to raise this issue – and the decision by the euro zone’s bailout agency, or ESM, to put short-term debt relief measures for Athens on hold - when he holds talks with German chancellor Angela Merkel in Berlin this evening.
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at 1.36pm GMTat 1.36pm GMT
11.35am GMT11.35am GMT
11:3511:35
Paul Hollingsworth, UK economist at Capital Economics, says the CBI surveys suggests the weaker official manufacturing data for October will prove to be a blip.Paul Hollingsworth, UK economist at Capital Economics, says the CBI surveys suggests the weaker official manufacturing data for October will prove to be a blip.
[It] suggests that the 1% monthly fall in manufacturing output in October, as revealed by the ONS figures earlier this month, was just a temporary blip. Accordingly, we continue to think that GDP growth will become better balanced over the coming quarters.[It] suggests that the 1% monthly fall in manufacturing output in October, as revealed by the ONS figures earlier this month, was just a temporary blip. Accordingly, we continue to think that GDP growth will become better balanced over the coming quarters.
Howard Archer, chief UK economist at IHS Markit, says 2017 could be a tougher year for manufacturers.Howard Archer, chief UK economist at IHS Markit, says 2017 could be a tougher year for manufacturers.
Despite the decent December CBI industrial trends survey, there are significant potential problems for the manufacturing sector that look likely to build up in 2017.Despite the decent December CBI industrial trends survey, there are significant potential problems for the manufacturing sector that look likely to build up in 2017.
In particular, business confidence is likely to be hampered by mounting uncertainty over the Brexit process, constraining investment plans and limiting demand for capital goods.In particular, business confidence is likely to be hampered by mounting uncertainty over the Brexit process, constraining investment plans and limiting demand for capital goods.
It also looks inevitable that consumers will become markedly less able (due to diminishing purchasing power) and likely more reluctant to buy big ticket consumer durable items over the coming months.It also looks inevitable that consumers will become markedly less able (due to diminishing purchasing power) and likely more reluctant to buy big ticket consumer durable items over the coming months.