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| Eurozone GDP: France posts strongest annual growth since 2011 - business live | Eurozone GDP: France posts strongest annual growth since 2011 - business live |
| (35 minutes later) | |
| Economists are concerned by the rise in UK consumer borrowing: | |
| The UK unsecured credit boom which we have been assured is slowing in fact accelerated to an annual rate of 9.5% in December #BoE | |
| Food for thought for the @bankofengland MPC next week. Mortgage approvals lowest since Jan 2015, but unsecured consumer credit reverses recent slowdown with £1.52bn of new borrowing in December (+9.5% YoY). V difficult balancing act for UK policymakers pic.twitter.com/wOQ5ct62q4 | |
| Breaking; The number of new mortgages approved in Britain has hit its lowest in almost three years. | |
| Just 61,039 mortgages were signed off in December, a drop of over 3,000 compared to November. That’s the smallest number since January 2015. | |
| #UnitedKingdom Mortgage Approvals at 61.04K https://t.co/xjNGJUUXea pic.twitter.com/cYefMMRst2 | |
| Bank of England figures also show that UK consumers borrowed an extra £1.5bn on credit last month. | |
| That pushed the annual growth in credit to 9.5%, up from 9.3%. | |
| So, people are finding it harder to buy a new house, and borrowing more on credit to make ends meet. Not a good sign for the UK economy in 2018. | |
| Poland’s economy accelerated last year, according to new data. | |
| Poland’s GDP expanded by 4.6% in 2017, up from 2.9% in 2016. | |
| Mining companies are leading the selloff today: | Mining companies are leading the selloff today: |
| Rubbish start for the miners https://t.co/R1IxsL7EzZ pic.twitter.com/2Xxayru8rg | Rubbish start for the miners https://t.co/R1IxsL7EzZ pic.twitter.com/2Xxayru8rg |
| Europe’s major stock markets have all fallen this morning, despite the solid growth figures from France and Spain. | Europe’s major stock markets have all fallen this morning, despite the solid growth figures from France and Spain. |
| The UK’s FTSE 100, the German DAX and the French CAC are all in the red, following last night’s losses on Wall Street. | The UK’s FTSE 100, the German DAX and the French CAC are all in the red, following last night’s losses on Wall Street. |
| The selloff in government bonds in recent days is starting to spook the equity markets, encouraging traders to sell shares. | The selloff in government bonds in recent days is starting to spook the equity markets, encouraging traders to sell shares. |
| Markets have had a strong run, of course, but analysts are wondering whether a selloff is imminent. Donald Trump’s tax cuts are likely to push US inflation higher, especially if more firms pass savings onto their staff in pay rises. That in turn increases the chance of US interest rates moving up. | Markets have had a strong run, of course, but analysts are wondering whether a selloff is imminent. Donald Trump’s tax cuts are likely to push US inflation higher, especially if more firms pass savings onto their staff in pay rises. That in turn increases the chance of US interest rates moving up. |
| Yesterday, Goldman Sachs predicted that “a correction of some kind seems a high probability in the coming months.” | Yesterday, Goldman Sachs predicted that “a correction of some kind seems a high probability in the coming months.” |
| Goldman warns of a market correction as S&P 500 & MSCI World have entered their longest period w/o correction of >5%. Says bear market risks low. Says drawdowns within bull markets of 10% or more are not uncommon. Goldman finds 22 since 1945. pic.twitter.com/ujghn9JqLP | Goldman warns of a market correction as S&P 500 & MSCI World have entered their longest period w/o correction of >5%. Says bear market risks low. Says drawdowns within bull markets of 10% or more are not uncommon. Goldman finds 22 since 1945. pic.twitter.com/ujghn9JqLP |
| Some reaction to the Spanish growth data: | Some reaction to the Spanish growth data: |
| Spanish economy grew by more than 3% (again!) in 2017. Still 1% away from full capacity but output gap is narrowing fast. Should be closed by early 2019, after France but way before Italy. Spain now entering a 'slowdown' phase after stellar years. My take: https://t.co/9KXNyued1l pic.twitter.com/cdIcrCvq0y | Spanish economy grew by more than 3% (again!) in 2017. Still 1% away from full capacity but output gap is narrowing fast. Should be closed by early 2019, after France but way before Italy. Spain now entering a 'slowdown' phase after stellar years. My take: https://t.co/9KXNyued1l pic.twitter.com/cdIcrCvq0y |
| Newsflash: Spain’s economy grew by 0.7% in the final quarter of 2017. | Newsflash: Spain’s economy grew by 0.7% in the final quarter of 2017. |
| That’s a slight slowdown, following 0.8% growth in July-September, but still a decent performance. It should make Spain one of the faster-growing European members. | That’s a slight slowdown, following 0.8% growth in July-September, but still a decent performance. It should make Spain one of the faster-growing European members. |
| Spain’s economy grew by 3.1% during 2017, matching 2016’s performance, according to the INE statistics body. | Spain’s economy grew by 3.1% during 2017, matching 2016’s performance, according to the INE statistics body. |
| The last few months of 2017 were dominated by the Catalonian independence crisis, as the region tried to break away from Madrd. | The last few months of 2017 were dominated by the Catalonian independence crisis, as the region tried to break away from Madrd. |
| Update: the pound is slipping lower. | Update: the pound is slipping lower. |
| GBPUSD back below 1.40; it really had no business above that level | GBPUSD back below 1.40; it really had no business above that level |
| The most encouraging part of the French growth report is that business investment has risen sharply. | The most encouraging part of the French growth report is that business investment has risen sharply. |
| This means French firms have boosted their spending on equipment, offices and factories - a sign that they’re more confident about their future prospects. | This means French firms have boosted their spending on equipment, offices and factories - a sign that they’re more confident about their future prospects. |
| Fred Ducrozet of Swiss bank Pictet says it’s a ‘big story’: | Fred Ducrozet of Swiss bank Pictet says it’s a ‘big story’: |
| French GDP growth was 1.9% in 2017, highest since 2011. All about domestic demand although net exports have started to contribute positively at the end of the year. pic.twitter.com/j7LybYjTkl | French GDP growth was 1.9% in 2017, highest since 2011. All about domestic demand although net exports have started to contribute positively at the end of the year. pic.twitter.com/j7LybYjTkl |
| The big story in France (and the euro area), is investment. Up 9% in two years, and back above pre-crisis levels for the first time in Q4-17. pic.twitter.com/6JVz5AIIRP | The big story in France (and the euro area), is investment. Up 9% in two years, and back above pre-crisis levels for the first time in Q4-17. pic.twitter.com/6JVz5AIIRP |
| Brexit worries are weighing on the pound again this morning. | Brexit worries are weighing on the pound again this morning. |
| Sterling has shed half a cent against the US dollar, to $1.402, after leaked government papers showed that Britain’s economy would be worse off under all three likely Brexit scenarios. | Sterling has shed half a cent against the US dollar, to $1.402, after leaked government papers showed that Britain’s economy would be worse off under all three likely Brexit scenarios. |
| My colleague Rowena Mason explains: | My colleague Rowena Mason explains: |
| The document suggested that chemicals, clothing, manufacturing, food and drink, and cars and retail would be the hardest hit and every UK region would also be affected negatively in all the modelled scenarios, with the north-east, the West Midlands and Northern Ireland facing the biggest falls in economic performance. | The document suggested that chemicals, clothing, manufacturing, food and drink, and cars and retail would be the hardest hit and every UK region would also be affected negatively in all the modelled scenarios, with the north-east, the West Midlands and Northern Ireland facing the biggest falls in economic performance. |
| France is benefitting from President Emmanuel Macron’s election win and the upturn in the global economy, says Bloomberg. | France is benefitting from President Emmanuel Macron’s election win and the upturn in the global economy, says Bloomberg. |
| They add: | They add: |
| Macron’s government is currently working with unions and business lobbies to overhaul France’s job training system, and will move on to unemployment insurance in coming months. | Macron’s government is currently working with unions and business lobbies to overhaul France’s job training system, and will move on to unemployment insurance in coming months. |
| Finance Minister Bruno Le Maire plans a major economy law for the spring that aims to further loosen restrictions on businesses, as well as increase profit-sharing plans for employees. | Finance Minister Bruno Le Maire plans a major economy law for the spring that aims to further loosen restrictions on businesses, as well as increase profit-sharing plans for employees. |
| French economy sustains momentum, has its best year since 2011 https://t.co/Uz89HfQlCS pic.twitter.com/iFtwnKumXy | French economy sustains momentum, has its best year since 2011 https://t.co/Uz89HfQlCS pic.twitter.com/iFtwnKumXy |
| Newsflash: France’s economy grew by 0.6% in the last three months. | Newsflash: France’s economy grew by 0.6% in the last three months. |
| Strong business investment and rising exports boosted growth, and compensated for a slowdown in household spending. | Strong business investment and rising exports boosted growth, and compensated for a slowdown in household spending. |
| This means France slightly outpaced Britain, which grew by 0.5% in the last quarter. | This means France slightly outpaced Britain, which grew by 0.5% in the last quarter. |
| Statistics body INSEE says: | Statistics body INSEE says: |
| Total gross fixed capital formation (business investment) accelerated slightly to +1.1% after +0.9% | Total gross fixed capital formation (business investment) accelerated slightly to +1.1% after +0.9% |
| Household consumption expenditure slowed down (+0.3% after +0.6%). | Household consumption expenditure slowed down (+0.3% after +0.6%). |
| Foreign trade balance contributed positively to GDP growth (+0.6 points after −0.5 points): exports accelerated markedly (+2.6% after +1.1%) while imports slowed down sharply (+0.7% after +2.4%). | Foreign trade balance contributed positively to GDP growth (+0.6 points after −0.5 points): exports accelerated markedly (+2.6% after +1.1%) while imports slowed down sharply (+0.7% after +2.4%). |
| Inventory changes made a negative contribution (−0.5 points after +0.3 points). | Inventory changes made a negative contribution (−0.5 points after +0.3 points). |
| The figures also show that France’s economy expanded by 1.9% during 2017 - the strongest annual growth since 2011. | The figures also show that France’s economy expanded by 1.9% during 2017 - the strongest annual growth since 2011. |
| French revival? GDP up 1.9% in 2017, highest since 2011 ...4Q GDP +2.4% on year thanks mainly to business investment #macron #france | French revival? GDP up 1.9% in 2017, highest since 2011 ...4Q GDP +2.4% on year thanks mainly to business investment #macron #france |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Today we learn if Europe’s economic recovery is on track. | Today we learn if Europe’s economic recovery is on track. |
| New eurozone growth figures, due at 10am GMT, are expected to show that the single currency bloc expanded by 0.6% in October-December. That would be another solid quarter, as the region puts the debt crisis behind it. | New eurozone growth figures, due at 10am GMT, are expected to show that the single currency bloc expanded by 0.6% in October-December. That would be another solid quarter, as the region puts the debt crisis behind it. |
| Individual figures from France (in a moment) and Spain will also give some country-level insights. | Individual figures from France (in a moment) and Spain will also give some country-level insights. |
| We’ll also be watching the markets closely. Yesterday, government bond prices fell (pushing up bond yields), fuelling fears that the bull market might be over. | We’ll also be watching the markets closely. Yesterday, government bond prices fell (pushing up bond yields), fuelling fears that the bull market might be over. |
| Wall Street suffered losses last night, and European markets are expected to drop this morning. | Wall Street suffered losses last night, and European markets are expected to drop this morning. |
| Opening callsFTSE100 is expected to open 46 points lower at 7,625DAX is expected to open 99 points lower at 13,225CAC40 is expected to open 34 points lower at 5,487 | Opening callsFTSE100 is expected to open 46 points lower at 7,625DAX is expected to open 99 points lower at 13,225CAC40 is expected to open 34 points lower at 5,487 |
| Jasper Lawler of London Capital Group explains: | Jasper Lawler of London Capital Group explains: |
| After such a promising end to last week where the Dow rallied 200 points to a fresh record close, trading on Monday couldn’t have been more different. US stocks experienced a spectacular reversal and plummeted overnight, as the US 10 year treasury yield pushed relentlessly higher. Concerns are starting to enter the market that inflation could be catching up and higher interest rates could pour cold water on the bull run. | After such a promising end to last week where the Dow rallied 200 points to a fresh record close, trading on Monday couldn’t have been more different. US stocks experienced a spectacular reversal and plummeted overnight, as the US 10 year treasury yield pushed relentlessly higher. Concerns are starting to enter the market that inflation could be catching up and higher interest rates could pour cold water on the bull run. |
| As the US treasury bond sell off depended, US treasury yields shot up to a peak of 2.73%, the highest level since 2014.The Dow dumped 177 points in its worst trading day so far this year and the S&P dived 0.7%. | As the US treasury bond sell off depended, US treasury yields shot up to a peak of 2.73%, the highest level since 2014.The Dow dumped 177 points in its worst trading day so far this year and the S&P dived 0.7%. |
| Plus, new UK consumer credit figures will show if Britons melted their credit cards last month, or reined in spending. | Plus, new UK consumer credit figures will show if Britons melted their credit cards last month, or reined in spending. |
| Here’s the agenda: | Here’s the agenda: |
| 6.30am GMT: French GDP for Q4 2017 (first estimate) | 6.30am GMT: French GDP for Q4 2017 (first estimate) |
| 8am GMT: Spanish GDP for Q 2017 (first estimate | 8am GMT: Spanish GDP for Q 2017 (first estimate |
| 9.30am: UK consumer credit and mortgage approval figures for December 2017 | 9.30am: UK consumer credit and mortgage approval figures for December 2017 |
| 10am: Eurozone GDP for Q4 2017 (first estimate) | 10am: Eurozone GDP for Q4 2017 (first estimate) |