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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/aug/30/markets-recover-after-korea-shock-and-ahead-of-us-gdp-business-live
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| Pound and shares recover after Korea shock and ahead of US GDP - business live | Pound and shares recover after Korea shock and ahead of US GDP - business live |
| (35 minutes later) | |
| 1.12pm BST | |
| 13:12 | |
| Here is a breakdown of the German inflation figure, from the Federal Statistics Office: | |
| 1.05pm BST | |
| 13:05 | |
| German inflation higher than expected | |
| Inflation figures just out from Germany show a higher than expected figure for August. | |
| The harmonised consumer price index - using the same methodology across the European Union - came in at 1.8% year on year compared to forecasts of 1.7 which was also the July figure. The month on month figure was also higher than expected at 0.2% rather than 0.1%. | |
| Updated | |
| at 1.05pm BST | |
| 12.30pm BST | 12.30pm BST |
| 12:30 | 12:30 |
| Richard Partington | Richard Partington |
| Here’s our report on the UK consumer credit figures: | Here’s our report on the UK consumer credit figures: |
| The rapid growth in borrowing by consumers appears to be slowing amid a squeeze on households, despite remaining at levels unseen since the financial crisis. | The rapid growth in borrowing by consumers appears to be slowing amid a squeeze on households, despite remaining at levels unseen since the financial crisis. |
| The annual rate of growth for consumer borrowing through credit cards, overdrafts and personal loans slowed to 9.8% in July, the lowest rate of expansion since April 2016, according to the Bank of England. The growth rate was a little weaker than in recent months, when the pace of expansion was above 10%. | The annual rate of growth for consumer borrowing through credit cards, overdrafts and personal loans slowed to 9.8% in July, the lowest rate of expansion since April 2016, according to the Bank of England. The growth rate was a little weaker than in recent months, when the pace of expansion was above 10%. |
| Spending by British consumers is growing at the weakest rate in almost three years, as households come under pressure to tighten their belts from higher prices fuelled by a drop in the value of the pound since the EU referendum. Wages rose by 2.1% in June, while inflation stood at 2.6% in July, leading to negative earnings growth. | Spending by British consumers is growing at the weakest rate in almost three years, as households come under pressure to tighten their belts from higher prices fuelled by a drop in the value of the pound since the EU referendum. Wages rose by 2.1% in June, while inflation stood at 2.6% in July, leading to negative earnings growth. |
| The figures come as research from Citizens Advice suggests credit card lenders may be targeting people struggling with unaffordable levels of debt, a practice that it said Britain’s financial watchdog should ban. | The figures come as research from Citizens Advice suggests credit card lenders may be targeting people struggling with unaffordable levels of debt, a practice that it said Britain’s financial watchdog should ban. |
| Weaker levels of growth in consumer credit could relieve pressure on the Bank to raise interest rates to slow the rapid expansion in the supply of money. Sluggish GDP growth and inflation coming close to its peak could put off a rate rise until late 2018, or even early 2019. | Weaker levels of growth in consumer credit could relieve pressure on the Bank to raise interest rates to slow the rapid expansion in the supply of money. Sluggish GDP growth and inflation coming close to its peak could put off a rate rise until late 2018, or even early 2019. |
| The full story is here: | The full story is here: |
| 12.16pm BST | 12.16pm BST |
| 12:16 | 12:16 |
| The pound is holding steady against both the dollar and euro after its recent Brexit-induced weakness. It is up 0.027% at $1.2927 and 0.3% to €1.0821. | The pound is holding steady against both the dollar and euro after its recent Brexit-induced weakness. It is up 0.027% at $1.2927 and 0.3% to €1.0821. |
| 11.52am BST | 11.52am BST |
| 11:52 | 11:52 |
| Economic sentiment in the eurozone may be holding up, but the same cannot be said for the UK, judging from the European Commission’s figures. | Economic sentiment in the eurozone may be holding up, but the same cannot be said for the UK, judging from the European Commission’s figures. |
| The overall index for the UK fell from 113.2 to 109.6, with construction and consumer sentiment particularly weak. | The overall index for the UK fell from 113.2 to 109.6, with construction and consumer sentiment particularly weak. |
| #EUCommission #business & #consumer survey: #UK sentiment indicator back to 109.6 in Aug after spike to 113.2 in Jul (June:109.2; May: 108.2 | #EUCommission #business & #consumer survey: #UK sentiment indicator back to 109.6 in Aug after spike to 113.2 in Jul (June:109.2; May: 108.2 |
| 11.31am BST | 11.31am BST |
| 11:31 | 11:31 |
| European markets have lost some of their earlier gains but remain in positive territory. Connor Campbell, financial analyst at Spreadex, said: | European markets have lost some of their earlier gains but remain in positive territory. Connor Campbell, financial analyst at Spreadex, said: |
| Europe’s Wednesday rebound lost some of its shine as the day went on, with investors perhaps struggling to justify their initial cheeriness. | Europe’s Wednesday rebound lost some of its shine as the day went on, with investors perhaps struggling to justify their initial cheeriness. |
| The FTSE saw its gains shrink from 0.6% to 0.2%, in large part due to a reversal from Brent Crude, which is once again threatening to fall below $51.50 per barrel. This in turn erased BP’s early growth and sent Shell lower by half a percent, explaining the UK index’s own slowing. The FTSE also wasn’t helped by the pound’s latest attempt at a comeback against the euro, sterling climbing above €1.08 with a 0.4% increase. | The FTSE saw its gains shrink from 0.6% to 0.2%, in large part due to a reversal from Brent Crude, which is once again threatening to fall below $51.50 per barrel. This in turn erased BP’s early growth and sent Shell lower by half a percent, explaining the UK index’s own slowing. The FTSE also wasn’t helped by the pound’s latest attempt at a comeback against the euro, sterling climbing above €1.08 with a 0.4% increase. |
| Like the FTSE, the DAX and CAC fell from their morning peak, and are now up 0.4% apiece. This despite the euro dropping 0.4% against both the dollar and the pound – though in the grand scheme of the currency’s summer that kind of pull back is a hill of beans compared to its mountainous climb. | Like the FTSE, the DAX and CAC fell from their morning peak, and are now up 0.4% apiece. This despite the euro dropping 0.4% against both the dollar and the pound – though in the grand scheme of the currency’s summer that kind of pull back is a hill of beans compared to its mountainous climb. |
| 11.11am BST | 11.11am BST |
| 11:11 | 11:11 |
| Not everyone believes the pound’s recent weakness may not last. Peter Rosenstreich at Swissquote Bank says: | Not everyone believes the pound’s recent weakness may not last. Peter Rosenstreich at Swissquote Bank says: |
| Although the pound has recovered slightly against the US dollar and the Euro, it is not a sustainable course. The Bank of England remains dovish: the central bank will not tighten money until there is clear political direction around Brexit. | Although the pound has recovered slightly against the US dollar and the Euro, it is not a sustainable course. The Bank of England remains dovish: the central bank will not tighten money until there is clear political direction around Brexit. |
| One key indicator will come in October, as the major parties hold their conferences. Investors will also be watching German elections. A decisive victory by Chancellor Merkel’s Christian Democrats will boost the Euro. She and France’s President Emmanuel Macron intend to cooperate in advancing the European Union’s financial integration. | One key indicator will come in October, as the major parties hold their conferences. Investors will also be watching German elections. A decisive victory by Chancellor Merkel’s Christian Democrats will boost the Euro. She and France’s President Emmanuel Macron intend to cooperate in advancing the European Union’s financial integration. |
| GBP/USD is consolidating around 1.30, while EUR/GBP has no real resistance till 0.9415. EUR/USD should top 1.20, and favourable European economic/political conditions suggest further upside for the pair. | GBP/USD is consolidating around 1.30, while EUR/GBP has no real resistance till 0.9415. EUR/USD should top 1.20, and favourable European economic/political conditions suggest further upside for the pair. |
| 11.09am BST | 11.09am BST |
| 11:09 | 11:09 |
| After the latest eurozone sentiment survey and ahead of next week’s meeting of the European Central Bank, economist Bert Colijn at ING Bank said: | After the latest eurozone sentiment survey and ahead of next week’s meeting of the European Central Bank, economist Bert Colijn at ING Bank said: |
| The August survey indicators all point to some modest improvements compared to July, but the main message is that the economy maintains a healthy cruising speed. Economic growth in the Eurozone seems to be stable at around 2% year-on-year for the moment, well above trend growth. The Economic Sentiment Indicator showed improvements in both services and industry, showing the current economic strength is widespread. Production and employment expectations both improved in the industry sector, but a drop off in employment expectations in services shows there could be some levelling off regarding job market recovery in the months ahead. | The August survey indicators all point to some modest improvements compared to July, but the main message is that the economy maintains a healthy cruising speed. Economic growth in the Eurozone seems to be stable at around 2% year-on-year for the moment, well above trend growth. The Economic Sentiment Indicator showed improvements in both services and industry, showing the current economic strength is widespread. Production and employment expectations both improved in the industry sector, but a drop off in employment expectations in services shows there could be some levelling off regarding job market recovery in the months ahead. |
| The key takeaway for monetary policy is inflation expectations did not show an uptick. The current weak inflation environment is likely to have continued in August as we expect the inflation rate to have ticked up marginally to 1.4% and core inflation to have remained stable at 1.2%. In fact, it is unlikely that inflation will increase much above 1.5% for the rest of the year and the ESI inflation expectations confirm that. Consumer inflation expectations decreased marginally from 11.7 to 11.6 in August, and industrial selling price expectations were stable but below the March reading. In the service sector, selling price expectations improved marginally, but they are also still below levels seen earlier in the year. | The key takeaway for monetary policy is inflation expectations did not show an uptick. The current weak inflation environment is likely to have continued in August as we expect the inflation rate to have ticked up marginally to 1.4% and core inflation to have remained stable at 1.2%. In fact, it is unlikely that inflation will increase much above 1.5% for the rest of the year and the ESI inflation expectations confirm that. Consumer inflation expectations decreased marginally from 11.7 to 11.6 in August, and industrial selling price expectations were stable but below the March reading. In the service sector, selling price expectations improved marginally, but they are also still below levels seen earlier in the year. |
| The difficult situation of healthy growth and weak inflation continues to trouble the ECB ahead of next week’s governing council meeting. Although we do expect at least a game plan from the ECB next week and probably a tasking of the relevant committees to investigate tapering options, ongoing weakness in inflation expectations will not make Draghi’s life easier. | The difficult situation of healthy growth and weak inflation continues to trouble the ECB ahead of next week’s governing council meeting. Although we do expect at least a game plan from the ECB next week and probably a tasking of the relevant committees to investigate tapering options, ongoing weakness in inflation expectations will not make Draghi’s life easier. |
| 10.44am BST | 10.44am BST |
| 10:44 | 10:44 |
| For those curious about what Moody’s did with its UK growth forecasts in its Global Macroeconomic outlook, it kept them unchanged. Here are the full forecasts: | For those curious about what Moody’s did with its UK growth forecasts in its Global Macroeconomic outlook, it kept them unchanged. Here are the full forecasts: |
| 10.15am BST | 10.15am BST |
| 10:15 | 10:15 |
| Eurozone confidence at ten year high | Eurozone confidence at ten year high |
| Eurozone economic sentiment came in higher than forecast in August, thanks to optimism in the industrial and service sectors, and among consumers. | Eurozone economic sentiment came in higher than forecast in August, thanks to optimism in the industrial and service sectors, and among consumers. |
| The European Commission’s sentiment index rose from 111.3 in July to 111.9, better than the 111.3 expected and hitting a ten year high. | The European Commission’s sentiment index rose from 111.3 in July to 111.9, better than the 111.3 expected and hitting a ten year high. |
| The figures for the EU as a whole was more or less static (-0.3 points to 111.9), just below its 10-year high of July. | The figures for the EU as a whole was more or less static (-0.3 points to 111.9), just below its 10-year high of July. |
| 10.10am BST | 10.10am BST |
| 10:10 | 10:10 |
| And more from the Bank’s lending figures: | And more from the Bank’s lending figures: |
| Corporate borrowing surged again in July. Might signal ↑capex. But timing hints could just reflect rate hike fears stoked by June's MPC meet pic.twitter.com/OAJcvEcQUo | Corporate borrowing surged again in July. Might signal ↑capex. But timing hints could just reflect rate hike fears stoked by June's MPC meet pic.twitter.com/OAJcvEcQUo |
| Updated | Updated |
| at 10.41am BST | at 10.41am BST |