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/2017/oct/26/brexit-fears-uk-car-industry-european-central-bank-qe-stimulus-draghi-business-live
The article has changed 15 times. There is an RSS feed of changes available.
| Version 2 | Version 3 |
|---|---|
| Brexit fears grip UK car industry as production tumbles – business live | Brexit fears grip UK car industry as production tumbles – business live |
| (35 minutes later) | |
| 10.08am BST | |
| 10:08 | |
| Why carmakers fear a no-deal Brexit | |
| Brexit is a particular worry to the UK auto industry because components typically cross the channel several times before a car finally rolls off the production line. | |
| The Financial Times did a good piece on this last year, pointing out that the bumper for a new Bentley could be made in Europe, checked in Crewe, painted in Germany, and then assembled in Britain. | |
| A fuel injector built by US component maker Delphi, used in diesel lorries, takes a similarly long trip.... | |
| A very good illustration by @FT how integrated for instance the car industry is with the single market. #Brexit. https://t.co/9MnOhSgq8b pic.twitter.com/mTWmB05DMX | |
| The FT’s Peter Campbell explained: | |
| This part uses steel from Europe which is machined in the UK before going to Germany for special heat treatment. The injector is then assembled at Delphi’s UK plant in Stonehouse, Gloucestershire, before being sold on to truckmakers based in Sweden, France or Germany. | |
| If the resulting truck is sold into the UK market, the component or materials used in it will have crossed the Channel five times before the lorry is ever driven by the customer. If tariffs are applied at each stage, the cost could be substantial. | |
| Updated | |
| at 10.08am BST | |
| 9.45am BST | |
| 09:45 | |
| Getting back to cars, here’s a table showing how Britain’s factories churned out 4% fewer vehicles in September. | |
| UK car manufacturing falls in September, as output declines -4.1% to 153,224 units https://t.co/2ae1hSqNbb pic.twitter.com/Kazl02gtcl | |
| 9.41am BST | |
| 09:41 | |
| Barclays CEO Jes Staley won’t enjoy today’s share price fall.... and he won’t get much relief from browsing through today’s analyst notes either. | |
| Investment bank Keefe, Bruyette & Woods are particularly cutting, following the drop in Barclay’s investment bank income. | |
| 'we had thought #Barclays would struggle to disappoint low Q3 expectations. It looks like they have succeeded' punchy from KBW | |
| Laith Khalaf of Hargreaves Lansdown agrees that Q3 ‘wasn’t a pretty quarter’ for Barclays International, adding: | |
| Litigation still remains a risk for Barclays, with more than 20 separate investigations ongoing, not least one relating to CEO Jes Staley’s attempt to uncover a whisteblower in his own ranks..... | |
| After making some good progress, Barclays appears to be stalling somewhat and it’s now touch and go whether the bank will break even in 2017. With the bank’s restructuring complete, Jes Staley will want to recover some momentum as we move forward into next year.’ | |
| Markets revenues down 30% yoy for Barclays. Only 5.1% ROE - hardly encouraging figures for investors https://t.co/XtDcAuIq2b | |
| 9.33am BST | 9.33am BST |
| 09:33 | 09:33 |
| Every weekday morning, our Business Today email will deliver the biggest stories, smartest analysis and hottest topics, direct to your inbox. | Every weekday morning, our Business Today email will deliver the biggest stories, smartest analysis and hottest topics, direct to your inbox. |
| Besides the key news headlines that you’d expect, there’ll be an at-a-glance agenda of the day’s main events, insightful opinion pieces and a quality feature to sink your teeth into each day. You can sign up here. | Besides the key news headlines that you’d expect, there’ll be an at-a-glance agenda of the day’s main events, insightful opinion pieces and a quality feature to sink your teeth into each day. You can sign up here. |
| 9.26am BST | 9.26am BST |
| 09:26 | 09:26 |
| Shares in Barclays have slumped to the bottom of the FTSE 100 this morning, after its latest financial results disappointed traders. | Shares in Barclays have slumped to the bottom of the FTSE 100 this morning, after its latest financial results disappointed traders. |
| Barclays have fallen by 7%, on track for their worst daily fall since the EU referendum in June 2016. | Barclays have fallen by 7%, on track for their worst daily fall since the EU referendum in June 2016. |
| Barclay’s investment bank is going through a bad time - income from trading bonds, foreign exchange and commodities shrank by 14%, partly down to the decline in market volatility. | Barclay’s investment bank is going through a bad time - income from trading bonds, foreign exchange and commodities shrank by 14%, partly down to the decline in market volatility. |
| CEO Jes Staley says: | CEO Jes Staley says: |
| The third quarter was clearly a difficult one for our Markets business within Barclays International. A lack of volume and volatility in FICC [Fixed Income, Currencies and Commodities] hit Markets revenues hard across the industry, and we were no exception to this trend. | The third quarter was clearly a difficult one for our Markets business within Barclays International. A lack of volume and volatility in FICC [Fixed Income, Currencies and Commodities] hit Markets revenues hard across the industry, and we were no exception to this trend. |
| Overall, Barclays grew its pre-tax profits by 19% over the last nine months, to £3.44bn. | Overall, Barclays grew its pre-tax profits by 19% over the last nine months, to £3.44bn. |
| Staley says he has now turned Barclays into a “Transatlantic Consumer and Wholesale Bank”. It’s made up of Barclays UK and Barclays International (mainly the investment bank), following the sale of various international assets including Barclay’s Africa division. | Staley says he has now turned Barclays into a “Transatlantic Consumer and Wholesale Bank”. It’s made up of Barclays UK and Barclays International (mainly the investment bank), following the sale of various international assets including Barclay’s Africa division. |
| The City, though, doesn’t seem impressed.... | The City, though, doesn’t seem impressed.... |
| Barclays share price set for biggest fall since Brexit after Q3 profit hit by weak markets business https://t.co/x1px00lhZa pic.twitter.com/x1HytkdkqC | Barclays share price set for biggest fall since Brexit after Q3 profit hit by weak markets business https://t.co/x1px00lhZa pic.twitter.com/x1HytkdkqC |
| 8.49am BST | 8.49am BST |
| 08:49 | 08:49 |
| Today’s drop in UK car production is the fourth blow to the auto industry in recent weeks. | Today’s drop in UK car production is the fourth blow to the auto industry in recent weeks. |
| We’ve also seen that: | We’ve also seen that: |
| Car sales have fallen for six months running, including a 9% drop in September | Car sales have fallen for six months running, including a 9% drop in September |
| Vauxhall is cutting 400 jobs at its Ellesmere Port plant, after seeing falling demand for the Astra | Vauxhall is cutting 400 jobs at its Ellesmere Port plant, after seeing falling demand for the Astra |
| Pendragon, the leading car dealership group, issued a profits warning after suffering a sharp fall in demand and falling prices. | Pendragon, the leading car dealership group, issued a profits warning after suffering a sharp fall in demand and falling prices. |
| 8.31am BST | 8.31am BST |
| 08:31 | 08:31 |
| Inchcape, the new and used car dealer, has also warned that Britain’s car sector is deteriorating. | Inchcape, the new and used car dealer, has also warned that Britain’s car sector is deteriorating. |
| In its latest financial results, released this morning, it says: | In its latest financial results, released this morning, it says: |
| UK market slowing, as expected, resulting in continuing margin pressure on vehicles. | UK market slowing, as expected, resulting in continuing margin pressure on vehicles. |
| In other words, we’re buying fewer cars, forcing dealers to cut prices to get a sale. | In other words, we’re buying fewer cars, forcing dealers to cut prices to get a sale. |
| 8.15am BST | 8.15am BST |
| 08:15 | 08:15 |
| UK car production falls as Brexit fears mount | UK car production falls as Brexit fears mount |
| The storm clouds gathering over Britain’s car industry have darkened this morning, after manufacturers suffered a sharp fall in production. | The storm clouds gathering over Britain’s car industry have darkened this morning, after manufacturers suffered a sharp fall in production. |
| Output shrank by 4.1% in September, new figures from the motor industry show. | Output shrank by 4.1% in September, new figures from the motor industry show. |
| Alarmingly, domestic demand tumbled by 14.2%, while there was also a 1.1% decline in production for exports. | Alarmingly, domestic demand tumbled by 14.2%, while there was also a 1.1% decline in production for exports. |
| In total, 6,500 fewer cars were produced last month than in September 2016. That has helped to drag production during 2017 down by 2.2%: | In total, 6,500 fewer cars were produced last month than in September 2016. That has helped to drag production during 2017 down by 2.2%: |
| Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, says the industry is suffering from falling confidence - and a government clampdown on diesel cars. | Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, says the industry is suffering from falling confidence - and a government clampdown on diesel cars. |
| Hawes says the industry’s big fear is that Britain leaves the EU without a deal, which would disrupt the car industry’s ability to buy and sell cars and components across the channel. | Hawes says the industry’s big fear is that Britain leaves the EU without a deal, which would disrupt the car industry’s ability to buy and sell cars and components across the channel. |
| “With UK car manufacturing falling for a fifth month this year, it’s clear that declining consumer and business confidence is affecting domestic demand and hence production volumes. Uncertainty regarding the national air quality plans also didn’t help the domestic market for diesel cars, despite the fact that these new vehicles will face no extra charges or restrictions across theUK. | “With UK car manufacturing falling for a fifth month this year, it’s clear that declining consumer and business confidence is affecting domestic demand and hence production volumes. Uncertainty regarding the national air quality plans also didn’t help the domestic market for diesel cars, despite the fact that these new vehicles will face no extra charges or restrictions across theUK. |
| Brexit is the greatest challenge of our times and yet we still don’t have any clarity on what our future relationship with our biggest trading partner will look like, nor detail of the transitional deal being sought. Leaving the EU with no deal would be the worst outcome for our sector so we urge government to deliver on its commitments and safeguard the competitiveness of the industry.” | Brexit is the greatest challenge of our times and yet we still don’t have any clarity on what our future relationship with our biggest trading partner will look like, nor detail of the transitional deal being sought. Leaving the EU with no deal would be the worst outcome for our sector so we urge government to deliver on its commitments and safeguard the competitiveness of the industry.” |
| These disappointing figures come a day after Japanese manufacturer Toyota urged the government to raise the ‘fog’ of Brexit uncertainty. | These disappointing figures come a day after Japanese manufacturer Toyota urged the government to raise the ‘fog’ of Brexit uncertainty. |
| City analyst Simon French of Panmure Gordon points out that car production has gone into reverse in other countries too...... | City analyst Simon French of Panmure Gordon points out that car production has gone into reverse in other countries too...... |
| Worth noting this morning that fall in UK car production mirrors global inflection in trend. Far from clear from the data that fall is #Brexit-related pic.twitter.com/I7sYGLSkMm | Worth noting this morning that fall in UK car production mirrors global inflection in trend. Far from clear from the data that fall is #Brexit-related pic.twitter.com/I7sYGLSkMm |
| Updated | Updated |
| at 8.26am BST | at 8.26am BST |
| 7.57am BST | 7.57am BST |
| 07:57 | 07:57 |
| The agenda: IT'S ECB DAY! | The agenda: IT'S ECB DAY! |
| Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business. |
| All eyes will be on the European Central Bank today, as the eurozone’s top central bankers meet to set monetary policy. And it could be a red letter day, with the ECB likely to turn down the gas on its money-printing programme. | All eyes will be on the European Central Bank today, as the eurozone’s top central bankers meet to set monetary policy. And it could be a red letter day, with the ECB likely to turn down the gas on its money-printing programme. |
| With Europe’s economy firing on all cylinders, the ECB is likely to decide to cut the pace of its bond-buying stimulus scheme, which is currently creating €60bn of new money each month. | With Europe’s economy firing on all cylinders, the ECB is likely to decide to cut the pace of its bond-buying stimulus scheme, which is currently creating €60bn of new money each month. |
| But, inflation is still below target, so the ECB won’t feel under pressure to slam the brakes. Instead, it will probably cut the pace of quantitative easing...but by how much? | But, inflation is still below target, so the ECB won’t feel under pressure to slam the brakes. Instead, it will probably cut the pace of quantitative easing...but by how much? |
| No-one’s really sure, so prepare for drama when ECB chief Mario Draghi reveals how he plans to slow, or ‘taper’, the stimulus plan. | No-one’s really sure, so prepare for drama when ECB chief Mario Draghi reveals how he plans to slow, or ‘taper’, the stimulus plan. |
| Good Taper Day morning from Frankfurt. #ECB | Good Taper Day morning from Frankfurt. #ECB |
| Financial group PNC predicts that the ECB will lop €15bn off its QE programme, and keep buying government and corporate bonds until next autumn. | Financial group PNC predicts that the ECB will lop €15bn off its QE programme, and keep buying government and corporate bonds until next autumn. |
| They say: | They say: |
| We expect a reduction in monthly asset purchases to perhaps €45 billion euros in January from the current €60 billion. The ECB will probably refrain from a firm commitment to an end-date for its program at tomorrow’s decision; we expect purchases to continue until at least the third quarter of 2018. | We expect a reduction in monthly asset purchases to perhaps €45 billion euros in January from the current €60 billion. The ECB will probably refrain from a firm commitment to an end-date for its program at tomorrow’s decision; we expect purchases to continue until at least the third quarter of 2018. |
| Draghi’s challenge is to avoid alarming the markets, sparking a crash in bond prices or a surge in the euro. | Draghi’s challenge is to avoid alarming the markets, sparking a crash in bond prices or a surge in the euro. |
| Capital Economics say he must strike a delicate balance: | Capital Economics say he must strike a delicate balance: |
| Following the numerous signals from President Draghi and colleagues over recent months, the market is well primed for some form of taper announcement. But there is still a delicate balance to strike. | Following the numerous signals from President Draghi and colleagues over recent months, the market is well primed for some form of taper announcement. But there is still a delicate balance to strike. |
| Taper too quickly and the markets might worry that the ECB’s historically hawkish instincts – typified by the premature (and subsequently reversed) interest rate hikes of 2011 – may be resurfacing. One obvious consequence could be an undesirable rise in the euro. But too tentative a move could fuel concerns that the ECB has little confidence in the economic outlook and the effectiveness of its previous policy measures. | Taper too quickly and the markets might worry that the ECB’s historically hawkish instincts – typified by the premature (and subsequently reversed) interest rate hikes of 2011 – may be resurfacing. One obvious consequence could be an undesirable rise in the euro. But too tentative a move could fuel concerns that the ECB has little confidence in the economic outlook and the effectiveness of its previous policy measures. |
| European stock markets are expected to rise a little, while traders wait for the ECB’s announcement at lunchtime. | European stock markets are expected to rise a little, while traders wait for the ECB’s announcement at lunchtime. |
| European Opening Calls:#FTSE 7462 +0.19%#DAX 12972 +0.14%#CAC 5382 +0.13%#MIB 22483 +0.16%#IBEX 10146 -0.07% | European Opening Calls:#FTSE 7462 +0.19%#DAX 12972 +0.14%#CAC 5382 +0.13%#MIB 22483 +0.16%#IBEX 10146 -0.07% |
| Also today.... Barclays Bank and high street retailer Debenhams are reporting results this morning. We also get a new survey of retail spending from the CBI. | Also today.... Barclays Bank and high street retailer Debenhams are reporting results this morning. We also get a new survey of retail spending from the CBI. |
| The agenda: | The agenda: |
| 11am BST: CBI’s survey of retail sales in October | 11am BST: CBI’s survey of retail sales in October |
| 12.45pm BST: ECB interest rate decision | 12.45pm BST: ECB interest rate decision |
| 1.30pm BST: ECB president Mario Draghi’s press conference | 1.30pm BST: ECB president Mario Draghi’s press conference |
| 1.30pm BST: US trade figures for September | 1.30pm BST: US trade figures for September |