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Pound jumps as Mark Carney says rate hike debate is building - business live Pound jumps as Mark Carney says rate hike debate is building - business live
(35 minutes later)
3.55pm BST
15:55
Mark Carney’s comments are the clearest signal yet that the Bank of England is “minded to tighten” monetary policy, says Neil Wilson of ETX Capital.
But they come just hours after deputy governor Jon Cunliffe argued that there was no rush to unwind last autumn’s rate cut, to just 0.25%.
So there’s quite a lot of head-scratching going on.
Wilson says:
There does appear to be a decided tilt towards a tightening bias, should economic conditions improve. It’s a case of justifying why they shouldn’t tighten rather than why they should, which appears to be a material shift from first few months of the year.
But the picture is now pretty muddy. Only last week Mr Carney said ‘now is not the time’ to tighten. Deputy governor John Cunliffe said only today that there is no rush to raise rates. So we are left guessing – the MPC does not seem to know where it’s at and the debate is taking place in public. This ought to play out in more vote splits over the summer before a move to ‘correct’ its policy mis-step perhaps by the autumn, assuming economic growth and wage growth holds.”
3.37pm BST3.37pm BST
15:3715:37
Here’s more reaction, from Philip Shaw of Investec...Here’s more reaction, from Philip Shaw of Investec...
BoE's Carney reminds markets MPC actively debating raising rates, though he himself prefers to wait. Lights blue touch paper under sterling… pic.twitter.com/cxEgvTNmYlBoE's Carney reminds markets MPC actively debating raising rates, though he himself prefers to wait. Lights blue touch paper under sterling… pic.twitter.com/cxEgvTNmYl
Economics blogger Jerome Blokland points out that UK government bond yields have jumped too:Economics blogger Jerome Blokland points out that UK government bond yields have jumped too:
It's happening people! Central Banks are heading for the exit! #BoE UK 10-year bond #yield spikes after #Carney comments. pic.twitter.com/O8pqXhQPoJIt's happening people! Central Banks are heading for the exit! #BoE UK 10-year bond #yield spikes after #Carney comments. pic.twitter.com/O8pqXhQPoJ
3.29pm BST3.29pm BST
15:2915:29
This chart shows how the pound bounced as Carney’s comments hit the wires.This chart shows how the pound bounced as Carney’s comments hit the wires.
#Cable soars as #Carney suggests #BankofEngland may need to start removing stimulus joining a hawkish shift among #MPC members #GBP #forex pic.twitter.com/IpCMSwrXQ8#Cable soars as #Carney suggests #BankofEngland may need to start removing stimulus joining a hawkish shift among #MPC members #GBP #forex pic.twitter.com/IpCMSwrXQ8
3.23pm BST3.23pm BST
15:2315:23
The FT’s Chris Giles agrees that Mark Carney’s comments are significant.The FT’s Chris Giles agrees that Mark Carney’s comments are significant.
He writes:He writes:
Mark Carney sought to clarify his position on interest rates on Wednesday, setting out his view that he would vote to tighten monetary policy if business investment begins to rise offsetting weaker consumption.Mark Carney sought to clarify his position on interest rates on Wednesday, setting out his view that he would vote to tighten monetary policy if business investment begins to rise offsetting weaker consumption.
The Bank of England governor has come under pressure to say when he would vote for an increase, having previously said it was “not yet the time” for higher rates and after the close June 5 to 3 vote to keep rates on hold.The Bank of England governor has come under pressure to say when he would vote for an increase, having previously said it was “not yet the time” for higher rates and after the close June 5 to 3 vote to keep rates on hold.
His views are important on the committee because he has never voted with the minority on the MPC, unlike his predecessor, since coming to the bank in 2013.His views are important on the committee because he has never voted with the minority on the MPC, unlike his predecessor, since coming to the bank in 2013.
Speaking at a European Central Bank forum in Sintra, Portugal, Mr Carney reiterated the common view on the MPC that any overshoot of inflation compared with the BoE’s 2 per cent targets “can only be temporary in nature and limited in scope”.Speaking at a European Central Bank forum in Sintra, Portugal, Mr Carney reiterated the common view on the MPC that any overshoot of inflation compared with the BoE’s 2 per cent targets “can only be temporary in nature and limited in scope”.
Breaking news: Mark Carney just said he would consider voting for a rise in UK interest rates https://t.co/MfjR67PuIA pic.twitter.com/lnK7R5xA0NBreaking news: Mark Carney just said he would consider voting for a rise in UK interest rates https://t.co/MfjR67PuIA pic.twitter.com/lnK7R5xA0N
3.18pm BST3.18pm BST
15:1815:18
Connor Campbell, analyst at Spreadex, says Carney’s comments prompted a “serious shift” in currency markets but traders failed to focus on the detail of what he said...Connor Campbell, analyst at Spreadex, says Carney’s comments prompted a “serious shift” in currency markets but traders failed to focus on the detail of what he said...
A caveat-laden statement from Mark Carney – speaking at the ECB Forum in Portugal – caused a super-surge from sterling.A caveat-laden statement from Mark Carney – speaking at the ECB Forum in Portugal – caused a super-surge from sterling.
Investors were uninterested in the nuances of what Carney was actually saying, focusing on the fact that the BoE chief said ‘some removal of monetary stimulus is likely to become necessary’ but ignoring that the central banker made it clear A LOT of things, like UK wage growth and business investment (not to mention Brexit), need to move in the right direction for that to happen.Investors were uninterested in the nuances of what Carney was actually saying, focusing on the fact that the BoE chief said ‘some removal of monetary stimulus is likely to become necessary’ but ignoring that the central banker made it clear A LOT of things, like UK wage growth and business investment (not to mention Brexit), need to move in the right direction for that to happen.
3.17pm BST3.17pm BST
15:1715:17
Here’s some innovative reaction to Mark Carney’s unexpected hint that the Bank of England could raise interest rates in the coming months....Here’s some innovative reaction to Mark Carney’s unexpected hint that the Bank of England could raise interest rates in the coming months....
Carney says some removal of BoE stimulus may be necessary.Stars (read Central Banks) are aligned, synchronized tapering around the corner? pic.twitter.com/259E50A7EmCarney says some removal of BoE stimulus may be necessary.Stars (read Central Banks) are aligned, synchronized tapering around the corner? pic.twitter.com/259E50A7Em
2.44pm BST2.44pm BST
14:4414:44
Carney says that globally, there are signs of a pickup in investment, which should in turn support productivity growth, stronger wages and higher welfare for all.Carney says that globally, there are signs of a pickup in investment, which should in turn support productivity growth, stronger wages and higher welfare for all.
But in the UK, not so much:But in the UK, not so much:
Globally, there are signs that such a rotation may be beginning. Although some UK–specific uncertainties might limit the UK’s participation in that pickup, the Bank of England will make its contribution by pursuing determined policies within well-established frameworks in order to maintain monetary and financial stability.Globally, there are signs that such a rotation may be beginning. Although some UK–specific uncertainties might limit the UK’s participation in that pickup, the Bank of England will make its contribution by pursuing determined policies within well-established frameworks in order to maintain monetary and financial stability.
He points out some of the specific challenges facing the UK (BREXIT):He points out some of the specific challenges facing the UK (BREXIT):
The main issues facing UK companies are uncertainties – about how consumers will adjust to a period of weaker real income growth; about market access post-Brexit; about the potential risks in the transition to new arrangements with the EU and the rest of the world.The main issues facing UK companies are uncertainties – about how consumers will adjust to a period of weaker real income growth; about market access post-Brexit; about the potential risks in the transition to new arrangements with the EU and the rest of the world.
Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. But it can influence how this hit to incomes is distributed between job losses and price rises. And it can support households and businesses as they adjust to such profound change.Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. But it can influence how this hit to incomes is distributed between job losses and price rises. And it can support households and businesses as they adjust to such profound change.
Carney says that while the most productive UK companies have continued to innovate, others have been slower to adopt these innovations.Carney says that while the most productive UK companies have continued to innovate, others have been slower to adopt these innovations.
That has stalled diffusion of productivity gains through the economy. This shortfall in investment could reflect deeper causes such as inadequate competition, barriers to investment in knowledge-based capital and sub-optimal managerial practices.That has stalled diffusion of productivity gains through the economy. This shortfall in investment could reflect deeper causes such as inadequate competition, barriers to investment in knowledge-based capital and sub-optimal managerial practices.
2.41pm BST2.41pm BST
14:4114:41
Carney: removal of monetary stimulus could become necessaryCarney: removal of monetary stimulus could become necessary
Bank of England governor Mark Carney is appearing on a panel in Sintra, Portugal, at the European Central Bank’s annual forum.Bank of England governor Mark Carney is appearing on a panel in Sintra, Portugal, at the European Central Bank’s annual forum.
The pound jumped more than half a cent against the dollar, to $1.2915, after the Bank published his remarks:The pound jumped more than half a cent against the dollar, to $1.2915, after the Bank published his remarks:
When the MPC last met earlier this month, my view was that given the mixed signals on consumer spending and business investment, it was too early to judge with confidence how large and persistent the slowdown in growth would prove. Moreover, with domestic inflationary pressures, particularly wages and unit labour costs, still subdued, it was appropriate to leave the policy stance unchanged at that time.When the MPC last met earlier this month, my view was that given the mixed signals on consumer spending and business investment, it was too early to judge with confidence how large and persistent the slowdown in growth would prove. Moreover, with domestic inflationary pressures, particularly wages and unit labour costs, still subdued, it was appropriate to leave the policy stance unchanged at that time.
Some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly becomes more conventional.Some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly becomes more conventional.
The extent to which the trade-off moves in that direction will depend on the extent to which weaker consumption growth is offset by other components of demand including business investment, whether wages and unit labour costs begin to firm, and more generally, how the economy reacts to both tighter financial conditions and the reality of Brexit negotiations. These are some of the issues that the MPC will debate in the coming months.The extent to which the trade-off moves in that direction will depend on the extent to which weaker consumption growth is offset by other components of demand including business investment, whether wages and unit labour costs begin to firm, and more generally, how the economy reacts to both tighter financial conditions and the reality of Brexit negotiations. These are some of the issues that the MPC will debate in the coming months.
1.48pm BST1.48pm BST
13:4813:48
Euro slides as ECB sources get to workEuro slides as ECB sources get to work
Ha! The European Central Bank have been quietly briefing that investors got the wrong end of the stick about Mario Draghi’s speech yesterday.Ha! The European Central Bank have been quietly briefing that investors got the wrong end of the stick about Mario Draghi’s speech yesterday.
It’s an attempt to calm speculation that the ECB might tighten monetary policy soon.It’s an attempt to calm speculation that the ECB might tighten monetary policy soon.
Reuters have the details:Reuters have the details:
European Central Bank President Mario Draghi intended to signal tolerance for a period of weaker inflation, not an imminent policy tightening, when his comments sent the euro higher this week, sources familiar with Draghi’s thinking said.European Central Bank President Mario Draghi intended to signal tolerance for a period of weaker inflation, not an imminent policy tightening, when his comments sent the euro higher this week, sources familiar with Draghi’s thinking said.
The ECB declined to comment.The ECB declined to comment.
But the markets don’t need an official ECB quote... they’ve already sold the euro, sending it down sharply....But the markets don’t need an official ECB quote... they’ve already sold the euro, sending it down sharply....
Euro dips as the ECB reportedly sees the market as misjudging Draghi's speech https://t.co/FmcPPzqKeZ pic.twitter.com/u4IpDC4kKxEuro dips as the ECB reportedly sees the market as misjudging Draghi's speech https://t.co/FmcPPzqKeZ pic.twitter.com/u4IpDC4kKx
You’d almost think that the ECB weren’t happy to see the euro at a one-year high against the US dollar.....You’d almost think that the ECB weren’t happy to see the euro at a one-year high against the US dollar.....
Those ECB sources do have a point, though -- yesterday, Draghi spoke about the need for “persistence and prudence”, but traders mainly focused on his upbeat assessment of the eurozone economy, and hints that it might adjust its stimulus programme.Those ECB sources do have a point, though -- yesterday, Draghi spoke about the need for “persistence and prudence”, but traders mainly focused on his upbeat assessment of the eurozone economy, and hints that it might adjust its stimulus programme.
Those who stopped reading #Draghi after the "reflationary" line are being taught a lesson: every word counts in central bank communication.Those who stopped reading #Draghi after the "reflationary" line are being taught a lesson: every word counts in central bank communication.
1.29pm BST1.29pm BST
13:2913:29
Lunchtime summaryLunchtime summary
Time for a quick recapTime for a quick recap
The split at the Bank of England over when to start raising interest rates has deepened, after deputy governor Sir Jon Cunliffe declared his hand. Cunliffe is firmly in the ‘not yet’ camp, putting him alongside boss Mark Carney, but in opposition to at least two other policymakers.The split at the Bank of England over when to start raising interest rates has deepened, after deputy governor Sir Jon Cunliffe declared his hand. Cunliffe is firmly in the ‘not yet’ camp, putting him alongside boss Mark Carney, but in opposition to at least two other policymakers.
City economists are expecting some tense meeting at the Bank of England in the months ahead, as the central bank tries to juggle high inflation and slowing consumer spending.City economists are expecting some tense meeting at the Bank of England in the months ahead, as the central bank tries to juggle high inflation and slowing consumer spending.
Marc Ostwald of ADM Investor Services says:Marc Ostwald of ADM Investor Services says:
The Bank of England is clearly very divided, with deputy governor Cunliffe this morning sending rather mixed signals, ostensibly backing Carney by saying this was not the time to raise interest rates, but also noting “(We) do have to look at what’s happening to domestic inflation pressure, and I think that on the data we have at the moment, gives us a bit of time to see how this evolves” - ‘a bit of time’ being the key observation.The Bank of England is clearly very divided, with deputy governor Cunliffe this morning sending rather mixed signals, ostensibly backing Carney by saying this was not the time to raise interest rates, but also noting “(We) do have to look at what’s happening to domestic inflation pressure, and I think that on the data we have at the moment, gives us a bit of time to see how this evolves” - ‘a bit of time’ being the key observation.
UK house prices have reversed three months of falls, by rising 1.1% in June. Housing experts say that a lack of supply is supporting prices (Britain’s record low interest rates must be helping, too!)UK house prices have reversed three months of falls, by rising 1.1% in June. Housing experts say that a lack of supply is supporting prices (Britain’s record low interest rates must be helping, too!)
However, price rises in London have slowed to the lowest rate since 2012.However, price rises in London have slowed to the lowest rate since 2012.
It’s been a bad morning for Tesco workers; one in four of its head office staff are being axed under a cost-cutting drive.It’s been a bad morning for Tesco workers; one in four of its head office staff are being axed under a cost-cutting drive.
Britain’s Co-operative Group will be left with just a 1% stake in the Co-op Bank after a deal was clinched with hedge funds and other investors to pump £700m into the loss-making lender.Britain’s Co-operative Group will be left with just a 1% stake in the Co-op Bank after a deal was clinched with hedge funds and other investors to pump £700m into the loss-making lender.
In the markets, the euro has hit a one-year high against the US dollar following confident noises from the European Central Bank this week.In the markets, the euro has hit a one-year high against the US dollar following confident noises from the European Central Bank this week.
Some experts, though, think the markets have got carried away - and that Mario Draghi wasn’t as hawkish as reported.Some experts, though, think the markets have got carried away - and that Mario Draghi wasn’t as hawkish as reported.
Still getting lots of questions re Draghi’s speech in Sintra. Hawkish market reaction largely unjustified imo. 1/nhttps://t.co/guYqjfEdCWStill getting lots of questions re Draghi’s speech in Sintra. Hawkish market reaction largely unjustified imo. 1/nhttps://t.co/guYqjfEdCW
The FTSE 100 is failing to provide any drama, though; it’s currently up one solitary point at 7436.The FTSE 100 is failing to provide any drama, though; it’s currently up one solitary point at 7436.
1.25pm BST1.25pm BST
13:2513:25
Helena SmithHelena Smith
Meanwhile, in what amounts to the first public sign that light is finally at the end of the seemingly never-ending Greek crisis tunnel, creditors have announced that the country could tap international capital markets by the end of the year.Meanwhile, in what amounts to the first public sign that light is finally at the end of the seemingly never-ending Greek crisis tunnel, creditors have announced that the country could tap international capital markets by the end of the year.
Helena Smith reportsHelena Smith reports
“Greece is entering the final year of the program with a real opportunity to regain market access and actually end the program on schedule in August next year,” the EU Commission’s Greek mission chief Declan Costello told a conference outside Athens.“Greece is entering the final year of the program with a real opportunity to regain market access and actually end the program on schedule in August next year,” the EU Commission’s Greek mission chief Declan Costello told a conference outside Athens.
But there were also warnings:But there were also warnings:
Nicola Giammarioli, who is Greece mission chief for the euro zone’s rescue fund, the European Stability Mechanism, cautioned that reforms weren’t enough. After legislating them, Athens had to implement them, she said.Nicola Giammarioli, who is Greece mission chief for the euro zone’s rescue fund, the European Stability Mechanism, cautioned that reforms weren’t enough. After legislating them, Athens had to implement them, she said.
“We are half-way. We have a good framework for (non-performing loan) management. Now its time for NPLs [non-performing loans] to be reduced. Greece has created an independent tax authority. Now it’s time to collect taxes … A privatisation and asset fund has been set up.“We are half-way. We have a good framework for (non-performing loan) management. Now its time for NPLs [non-performing loans] to be reduced. Greece has created an independent tax authority. Now it’s time to collect taxes … A privatisation and asset fund has been set up.
Now it’s time to privatize and generate value.”Now it’s time to privatize and generate value.”
Greek bonds have already been rallying recently, on hopes that the country could return to the financial markets. Earlier this week its benchmark 10-year debt hit its highest levels since the debt crisis began.Greek bonds have already been rallying recently, on hopes that the country could return to the financial markets. Earlier this week its benchmark 10-year debt hit its highest levels since the debt crisis began.
UpdatedUpdated
at 1.39pm BSTat 1.39pm BST
12.52pm BST12.52pm BST
12:5212:52
Greek businesses create a stink over rubbish workers' strikeGreek businesses create a stink over rubbish workers' strike
Helena SmithHelena Smith
Ouch! Over in a sweltering Athens it’s not only the temperature that is rising.Ouch! Over in a sweltering Athens it’s not only the temperature that is rising.
Greek businessmen are now sounding the alarm after striking refuse workers decided to continue their walkout last night.Greek businessmen are now sounding the alarm after striking refuse workers decided to continue their walkout last night.
With rubbish continuing to pile up at an alarming rate on the sweltering streets, will Greece’s tourist industry take a hit?With rubbish continuing to pile up at an alarming rate on the sweltering streets, will Greece’s tourist industry take a hit?
Helena Smith reports from the Greek capitalHelena Smith reports from the Greek capital
With mounds of rubbish now turning into mountains of rubbish across the capital, the Athens Chamber of Tradesman has waded in with an appeal to all sides to make the concessions needed to end the strike.With mounds of rubbish now turning into mountains of rubbish across the capital, the Athens Chamber of Tradesman has waded in with an appeal to all sides to make the concessions needed to end the strike.
The 11-day walk-out was prolonged last night after municipal workers rejected prime minister Alexis Tsipras’ proposed compromise of improved work conditions, including permanent jobs and thousands of new hirings, as insufficient.The 11-day walk-out was prolonged last night after municipal workers rejected prime minister Alexis Tsipras’ proposed compromise of improved work conditions, including permanent jobs and thousands of new hirings, as insufficient.
In a sharply-worded statement the Chamber warned of the growing risk of the rubbish becoming a public health “bomb” and accused strikers of holding millions of citizens, tourists and tradesman hostage to their demands.In a sharply-worded statement the Chamber warned of the growing risk of the rubbish becoming a public health “bomb” and accused strikers of holding millions of citizens, tourists and tradesman hostage to their demands.
“The images are disheartening. The tons of rubbish now on the roads conjure a third world country, definitely not a European Union state. Tourists, who have chosen Greece as their holiday destination, walk amid mountains of rubbish while the combination of the heat wave and rubbish is a direct threat to public health.“The images are disheartening. The tons of rubbish now on the roads conjure a third world country, definitely not a European Union state. Tourists, who have chosen Greece as their holiday destination, walk amid mountains of rubbish while the combination of the heat wave and rubbish is a direct threat to public health.
The economic damage for thousands of professional restaurateurs and tourist enterprises is huge.”The economic damage for thousands of professional restaurateurs and tourist enterprises is huge.”
Athens mayor Giorgos Kaminis has also intervened calling the unionists’ demands “excessive” and saying a government amendment legislating labour reforms more than met what they had been hoping for.Athens mayor Giorgos Kaminis has also intervened calling the unionists’ demands “excessive” and saying a government amendment legislating labour reforms more than met what they had been hoping for.
With debt-stricken Greece dependent on international bailout funds, Tsipras told unionists he could not openly defy creditors who have demanded strict streamlining of government-controlled bodies.With debt-stricken Greece dependent on international bailout funds, Tsipras told unionists he could not openly defy creditors who have demanded strict streamlining of government-controlled bodies.
The striking workers have vowed to continue the strike until Thursday when rallies are also expected. In northern Thessaloniki, Greece’s second biggest city, local authorities announced that they would outsource garbage collection to the private sector.The striking workers have vowed to continue the strike until Thursday when rallies are also expected. In northern Thessaloniki, Greece’s second biggest city, local authorities announced that they would outsource garbage collection to the private sector.
“We have documents from the department of health and Kelpno (the Hellenic centre for disease control and prevention) saying that there is a serious danger for public health. Today we will start spraying,” said Thomas Psarras in charge of public cleanliness for the municipality.“We have documents from the department of health and Kelpno (the Hellenic centre for disease control and prevention) saying that there is a serious danger for public health. Today we will start spraying,” said Thomas Psarras in charge of public cleanliness for the municipality.
Temperatures are expected to rise to 43 degrees Celsius by Friday as Greece swlters under its first summer heatwave.Temperatures are expected to rise to 43 degrees Celsius by Friday as Greece swlters under its first summer heatwave.
Greek journalist Omaira Gill reports that life goes on, but the situation is hardly ideal:Greek journalist Omaira Gill reports that life goes on, but the situation is hardly ideal:
Last Saturday I had the 1st date of the whole year with my husband amid the sultry summer evening breeze & stinking garbage #romance https://t.co/fpRPhX8TdPLast Saturday I had the 1st date of the whole year with my husband amid the sultry summer evening breeze & stinking garbage #romance https://t.co/fpRPhX8TdP
In the last few minutes, there is now chatter that the government could forcibly mobilising municipal workers to collect rubbish.In the last few minutes, there is now chatter that the government could forcibly mobilising municipal workers to collect rubbish.
Spokesman Dimitris Tzanakopoulos has just ruled out but said while “the government will not allow the endangering of public health,” it won’t agree to “private interests” replacing the strikers.Spokesman Dimitris Tzanakopoulos has just ruled out but said while “the government will not allow the endangering of public health,” it won’t agree to “private interests” replacing the strikers.
UpdatedUpdated
at 1.05pm BSTat 1.05pm BST
12.08pm BST12.08pm BST
12:0812:08
Here’s some speedy reaction to Tesco’s job cuts plans, from Hannah Maundrell, Editor in Chief of money.co.uk :Here’s some speedy reaction to Tesco’s job cuts plans, from Hannah Maundrell, Editor in Chief of money.co.uk :
“It’s sad but not surprising that Tesco are making job cuts at its head office. Last week Tesco said they needed to remain “sustainable and cost effective” and this is evidently their way of streamlining the business.“It’s sad but not surprising that Tesco are making job cuts at its head office. Last week Tesco said they needed to remain “sustainable and cost effective” and this is evidently their way of streamlining the business.
“It’s undoubtedly distressing news for employees of Tesco and their families. Now is the time to check what redundancy rights you have and dig out any income or mortgage protection policies you hold just in case.“It’s undoubtedly distressing news for employees of Tesco and their families. Now is the time to check what redundancy rights you have and dig out any income or mortgage protection policies you hold just in case.
“It’s also worth checking what support from the government you’d be entitled to if you’ve been left out of work and do a bit of an overhaul of your finances so you know how your budget will cope if you’re faced with a temporary gap in employment.”“It’s also worth checking what support from the government you’d be entitled to if you’ve been left out of work and do a bit of an overhaul of your finances so you know how your budget will cope if you’re faced with a temporary gap in employment.”
Money.co.uk have also published this guide to redundancy rights in the UK.Money.co.uk have also published this guide to redundancy rights in the UK.
Here’s our story on the job cuts:Here’s our story on the job cuts:
Tesco to cut 1,200 head office jobs https://t.co/XgPvl9aEVKTesco to cut 1,200 head office jobs https://t.co/XgPvl9aEVK
12.01pm BST12.01pm BST
12:0112:01
Tesco cuts 1,200 head office jobsTesco cuts 1,200 head office jobs
Another newsflash: Tesco is reportedly axing 1,200 jobs at its head office.Another newsflash: Tesco is reportedly axing 1,200 jobs at its head office.
That’s a big blow to the supermarket chain’s workforce, as bosses press on with efforts to cut costs.That’s a big blow to the supermarket chain’s workforce, as bosses press on with efforts to cut costs.
This means that one in four staff at Tesco’s offices at Welwyn Garden City and Hatfield would go, according to the Press Association.This means that one in four staff at Tesco’s offices at Welwyn Garden City and Hatfield would go, according to the Press Association.
This comes hot on the heels of the planned closure of Tesco’s Cardiff call centre, which could eliminate 1,100 jobs.This comes hot on the heels of the planned closure of Tesco’s Cardiff call centre, which could eliminate 1,100 jobs.
PA reporting Tesco is axing 1,200 head office jobs. After the 1,100 call centre jobs hit last week. Just as things were looking up for themPA reporting Tesco is axing 1,200 head office jobs. After the 1,100 call centre jobs hit last week. Just as things were looking up for them
11.56am BST11.56am BST
11:5611:56
Co-op rescue deal finally agreed.Co-op rescue deal finally agreed.
Jill TreanorJill Treanor
Newsflash: At long last, Britain’s troubled Co-operative Bank has finally agreed a capital raising plan.Newsflash: At long last, Britain’s troubled Co-operative Bank has finally agreed a capital raising plan.
After months of negotiations, Co-Op Bank will receive £700m of fresh capital, and the Co-operative Group’s stake the company will fall to just 1%.After months of negotiations, Co-Op Bank will receive £700m of fresh capital, and the Co-operative Group’s stake the company will fall to just 1%.
My colleague Jill Treanor has the details:My colleague Jill Treanor has the details:
A rescue deal for the Co-operative Bank has been clinched under which hedge funds and other investors will pump £700m into the loss-making operation.A rescue deal for the Co-operative Bank has been clinched under which hedge funds and other investors will pump £700m into the loss-making operation.
The capital injection by means that the bank, which has 4m customers, will continue as a standalone entity after it abandoned efforts to find a buyer.The capital injection by means that the bank, which has 4m customers, will continue as a standalone entity after it abandoned efforts to find a buyer.
However, the structure of deal means that the Co-operative Group of supermarkets and funeral homes that used to own the bank will be left with a 1% stake in the bank. The mutual’s stake had already fallen to 20% after previous rescue operations, the first of which was in 2013 when the scale of the problems in the bank were uncovered, and it refused to put more money in this time.However, the structure of deal means that the Co-operative Group of supermarkets and funeral homes that used to own the bank will be left with a 1% stake in the bank. The mutual’s stake had already fallen to 20% after previous rescue operations, the first of which was in 2013 when the scale of the problems in the bank were uncovered, and it refused to put more money in this time.
The bank - which put itself up for sale in February - said that despite the tiny stake owed by the Group, its “name, brand and commitment to co-operative values, set out in its ethical policy, will continue unaffected”.The bank - which put itself up for sale in February - said that despite the tiny stake owed by the Group, its “name, brand and commitment to co-operative values, set out in its ethical policy, will continue unaffected”.
Dennis Holt, chairman said: “The board is pleased to confirm this proposal for a recapitalisation which will mean that the Co-operative Bank can continue as a viable stand-alone entity, with values and ethics at its heart. It is a great outcome for our customers. Our investors share our commitment to building our distinctive ethical franchise and see strong future growth potential for The Co-operative Bank.”Dennis Holt, chairman said: “The board is pleased to confirm this proposal for a recapitalisation which will mean that the Co-operative Bank can continue as a viable stand-alone entity, with values and ethics at its heart. It is a great outcome for our customers. Our investors share our commitment to building our distinctive ethical franchise and see strong future growth potential for The Co-operative Bank.”
The deal follows a failed attempt to sell Co-op Bank, which has suffered years of losses and ran up a £1.5bn capital blackhole following a flawed merger with Britannia Building Society in 2009.The deal follows a failed attempt to sell Co-op Bank, which has suffered years of losses and ran up a £1.5bn capital blackhole following a flawed merger with Britannia Building Society in 2009.
11.49am BST11.49am BST
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Euro hits one-year high as Deutsche tears up its forecastsEuro hits one-year high as Deutsche tears up its forecasts
Deutsche Bank’s foreign exchange strategist have been forced into a screeching u-turn this morning.Deutsche Bank’s foreign exchange strategist have been forced into a screeching u-turn this morning.
They have abandoned their forecast that the euro would end the year close to parity with the US dollar, at just $1.03. They now expect it to have strengthened to $1.16 by the end of 2017.They have abandoned their forecast that the euro would end the year close to parity with the US dollar, at just $1.03. They now expect it to have strengthened to $1.16 by the end of 2017.
Deutsche threw in the towel after hearing ECB president Mario Draghi give an optimistic assessment of the eurozone yesterday, saying that growth was broadening amid moew reflationary pressures.Deutsche threw in the towel after hearing ECB president Mario Draghi give an optimistic assessment of the eurozone yesterday, saying that growth was broadening amid moew reflationary pressures.
The bank says:The bank says:
We are completely revising our euro outlook for the rest of the year. The speech is not the fundamental driver behind the change in view, but it aptly marks the culmination of a number of developments that have caused us to change our forecasts.We are completely revising our euro outlook for the rest of the year. The speech is not the fundamental driver behind the change in view, but it aptly marks the culmination of a number of developments that have caused us to change our forecasts.
Arguably Deutsche are a little late to the non-parity party; the euro has been climbing steadily against the US dollar this year, and indeed hit a one-year high of $1.136 this morning.Arguably Deutsche are a little late to the non-parity party; the euro has been climbing steadily against the US dollar this year, and indeed hit a one-year high of $1.136 this morning.
Jamie McGeever of Reuters tweets:Jamie McGeever of Reuters tweets:
A turning point? The biggest euro bear throws in the towel. Deutsche Bank sees $1.16 or higher by year end. That forecast was once $0.85.A turning point? The biggest euro bear throws in the towel. Deutsche Bank sees $1.16 or higher by year end. That forecast was once $0.85.
Deutsche Bank's "euroglut" theory looks shot to pieces. In 2015 the bank forecast euro at $0.85 by end-2017. They now see $1.16 or higher.Deutsche Bank's "euroglut" theory looks shot to pieces. In 2015 the bank forecast euro at $0.85 by end-2017. They now see $1.16 or higher.
10.52am BST10.52am BST
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Sir Jon Cunliffe’s reluctance to vote for an early interest rate rise is keeping the pound at its highest level against the US dollar since the general election.Sir Jon Cunliffe’s reluctance to vote for an early interest rate rise is keeping the pound at its highest level against the US dollar since the general election.
Sterling jumped over $1.283 this morning, it highest point since the shock exit polls showed Britain had voted for a hung parliament.Sterling jumped over $1.283 this morning, it highest point since the shock exit polls showed Britain had voted for a hung parliament.
There’s not much other drama in the City, though. Distribution firm Bunzl is the biggest riser on the FTSE 100, up almost 4%, but the wider FSTE 100 is now flat.There’s not much other drama in the City, though. Distribution firm Bunzl is the biggest riser on the FTSE 100, up almost 4%, but the wider FSTE 100 is now flat.
Joshua Mahony, market analyst at IG, says:Joshua Mahony, market analyst at IG, says:
The FTSE has been moving lower once more this morning, with a dovish comment from BoE deputy governor Jon Cunliffe helping recover much of the initial selling at the openThe FTSE has been moving lower once more this morning, with a dovish comment from BoE deputy governor Jon Cunliffe helping recover much of the initial selling at the open
10.34am BST10.34am BST
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The news that UK house prices rose by 1.1% this month (but not in London!) has caused plenty of chatter in the City.The news that UK house prices rose by 1.1% this month (but not in London!) has caused plenty of chatter in the City.
Caroline Simmons, Deputy Head of the UK Investment Office at UBS Wealth Management, predicts that prices will only rise modestly over the next year.Caroline Simmons, Deputy Head of the UK Investment Office at UBS Wealth Management, predicts that prices will only rise modestly over the next year.
“Whilst house price growth bounced back in June the figures still point to a slowing picture overall with annual house price growth now at just 3%. Going forward, recent political uncertainty from Theresa May’s minority government and Brexit negotiations is likely to weigh on consumer confidence, denting UK house sales in the near term. There was a notable decline in new buyer enquiries following the General Election, which we expect to persist over the short term.“Whilst house price growth bounced back in June the figures still point to a slowing picture overall with annual house price growth now at just 3%. Going forward, recent political uncertainty from Theresa May’s minority government and Brexit negotiations is likely to weigh on consumer confidence, denting UK house sales in the near term. There was a notable decline in new buyer enquiries following the General Election, which we expect to persist over the short term.
“Over the medium-term the picture looks slightly rosier. Structural demand remains supportive given household formation rates and credit conditions remain supportive for house prices. The banks’ increased capital strength and ability to lend, alongside persistently low interest rates aiding home owners’ ability to service mortgages, should continue to support house price growth.“Over the medium-term the picture looks slightly rosier. Structural demand remains supportive given household formation rates and credit conditions remain supportive for house prices. The banks’ increased capital strength and ability to lend, alongside persistently low interest rates aiding home owners’ ability to service mortgages, should continue to support house price growth.
“We are forecasting 2-3% house price growth over the next 12 months.“We are forecasting 2-3% house price growth over the next 12 months.
This chart from Nationwide shows how London is now the second-slowest region for house price growth:This chart from Nationwide shows how London is now the second-slowest region for house price growth: