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| City watchdog to take no action over RBS mistreatment of customers - live | City watchdog to take no action over RBS mistreatment of customers - live |
| (35 minutes later) | |
| In the wake of the Financial Conduct Authority saying it does not have sufficient powers to disciple Royal Bank of Scotland executives over the GRG scandal, the head of the Treasury Select Committee has called for a review into whether new legislation is needed. MP Nicky Morgan MP said: | |
| It will be disappointing and bewildering for those who got caught up in GRG’s actions that the FCA is not able to act. This demonstrates the need for a change in how lending for SMEs is regulated. The Government should stand ready to introduce any legislation required when it sees the outcome of current reports on redress and should also urgently consider what additional powers the FCA requires to act in cases such as GRG. | |
| Here’s Reuters wrapping up the day’s eurozone economic news: | Here’s Reuters wrapping up the day’s eurozone economic news: |
| The euro zone economy grew more slowly than expected in the second quarter, preliminary data showed on Tuesday, but headline and core inflation accelerated with unemployment stabilizing at a lower level. | The euro zone economy grew more slowly than expected in the second quarter, preliminary data showed on Tuesday, but headline and core inflation accelerated with unemployment stabilizing at a lower level. |
| The European Union’s statistics office Eurostat estimated that gross domestic product in the 19 countries sharing the euro expanded 0.3 percent quarter-on-quarter in the April-June period and was 2.1 percent higher against the same period of 2017. | The European Union’s statistics office Eurostat estimated that gross domestic product in the 19 countries sharing the euro expanded 0.3 percent quarter-on-quarter in the April-June period and was 2.1 percent higher against the same period of 2017. |
| Economists polled by Reuters had expected a 0.4 percent quarterly expansion and a 2.2 percent year-on-year rise. | Economists polled by Reuters had expected a 0.4 percent quarterly expansion and a 2.2 percent year-on-year rise. |
| Headline consumer inflation accelerated to 2.1 percent year-on-year in July from 2.0 percent in June, mainly because of a spike in the cost of energy. | Headline consumer inflation accelerated to 2.1 percent year-on-year in July from 2.0 percent in June, mainly because of a spike in the cost of energy. |
| Core inflation, which excludes energy costs as well as unprocessed food and which the European Central Bank looks at in policy decisions, also rose to 1.3 percent year-on-year from 1.2 percent in June, beating economists expectations. | Core inflation, which excludes energy costs as well as unprocessed food and which the European Central Bank looks at in policy decisions, also rose to 1.3 percent year-on-year from 1.2 percent in June, beating economists expectations. |
| An even narrower core inflation measure that economists pay attention to, which excludes also the costs of alcohol and tobacco, also rose to 1.1 percent from 0.9 percent in July — again, above expectations. | An even narrower core inflation measure that economists pay attention to, which excludes also the costs of alcohol and tobacco, also rose to 1.1 percent from 0.9 percent in July — again, above expectations. |
| The ECB wants to keep headline inflation below, but close to, 2 percent over the medium term. | The ECB wants to keep headline inflation below, but close to, 2 percent over the medium term. |
| Separately, Eurostat said unemployment in the euro zone was at 8.3 percent in June, unchanged from a downwardly revised 8.3 percent in May. | Separately, Eurostat said unemployment in the euro zone was at 8.3 percent in June, unchanged from a downwardly revised 8.3 percent in May. |
| Euro zone economic growth slows in second quarter, inflation accelerates https://t.co/GAMqoRy5fi via @Reuters pic.twitter.com/hHORuU5lCT | Euro zone economic growth slows in second quarter, inflation accelerates https://t.co/GAMqoRy5fi via @Reuters pic.twitter.com/hHORuU5lCT |
| Commenting on the eurozone inflation figures, Joshua Mahony, market analyst at IG said: | Commenting on the eurozone inflation figures, Joshua Mahony, market analyst at IG said: |
| Eurozone inflation data has pushed pressure back onto Mario Draghi & co, with headline CPI breaching the 2% target for the first time since 2012. While much of the rise in inflation can be attributed to the incredible 9.4% annual rise in the energy component, the fact that we have also seen core inflation jump 0.2% means that many of the underlying components are also being affected. With the ECB set to end their QE programme by the end of the year, markets will be keen to see Draghi’s response should inflation continue to push higher. | Eurozone inflation data has pushed pressure back onto Mario Draghi & co, with headline CPI breaching the 2% target for the first time since 2012. While much of the rise in inflation can be attributed to the incredible 9.4% annual rise in the energy component, the fact that we have also seen core inflation jump 0.2% means that many of the underlying components are also being affected. With the ECB set to end their QE programme by the end of the year, markets will be keen to see Draghi’s response should inflation continue to push higher. |
| Surprised not a bigger bump in qoq growth given the shabby weather-induced Q1. As if the region's politicians did not already know it...a big work-in-progress! https://t.co/Ayw6tTG2Vf | Surprised not a bigger bump in qoq growth given the shabby weather-induced Q1. As if the region's politicians did not already know it...a big work-in-progress! https://t.co/Ayw6tTG2Vf |
| The weaker than expected eurozone growth figures mean the European Central Bank is unlikely to raise rates before next autumn, says ING Bank senior economist Bert Colijn: | The weaker than expected eurozone growth figures mean the European Central Bank is unlikely to raise rates before next autumn, says ING Bank senior economist Bert Colijn: |
| The Eurozone economy grew by just 0.3% QoQ in the second quarter with inflation increasing to above 2%. Any “behind the curve” thoughts that may have surfaced earlier this year can be parked. | The Eurozone economy grew by just 0.3% QoQ in the second quarter with inflation increasing to above 2%. Any “behind the curve” thoughts that may have surfaced earlier this year can be parked. |
| Whereas the decline in growth in Q1 was considered to be due to one-offs, it seems like excuses are running out to explain the even weaker Q2 reading. Perhaps still temporary, but factors with a longer shelf life seem to have brought Eurozone GDP growth down to a lower cruising speed for the moment. The confidence impact of a trade row and weaker real household income growth seem to be spoiling the European party for the moment. | Whereas the decline in growth in Q1 was considered to be due to one-offs, it seems like excuses are running out to explain the even weaker Q2 reading. Perhaps still temporary, but factors with a longer shelf life seem to have brought Eurozone GDP growth down to a lower cruising speed for the moment. The confidence impact of a trade row and weaker real household income growth seem to be spoiling the European party for the moment. |
| Trade uncertainty seems to have already had a significant effect on the Eurozone economy in Q2. While the impact on real export growth has likely been small over the second quarter, the confidence factor has been more important. With lower confidence among businesses and consumers, concerns have likely translated into somewhat weaker domestic demand growth. In an economy in which capacity constraints abound and credit conditions remain favourable, confidence is the likely factor keeping investment down. | Trade uncertainty seems to have already had a significant effect on the Eurozone economy in Q2. While the impact on real export growth has likely been small over the second quarter, the confidence factor has been more important. With lower confidence among businesses and consumers, concerns have likely translated into somewhat weaker domestic demand growth. In an economy in which capacity constraints abound and credit conditions remain favourable, confidence is the likely factor keeping investment down. |
| Lower consumer confidence has taken some of the wind out of the sails from consumption growth. This comes on the back of trade concerns, but also slowing growth in real household income per capita since mid-2017. The second quarter has added to this trend because the rapid pickup in fuel prices has likely outstripped wage growth. French data - the breakdown of GDP is already available in France - confirms that private consumption performed poorly as it declined by 0.1%. | Lower consumer confidence has taken some of the wind out of the sails from consumption growth. This comes on the back of trade concerns, but also slowing growth in real household income per capita since mid-2017. The second quarter has added to this trend because the rapid pickup in fuel prices has likely outstripped wage growth. French data - the breakdown of GDP is already available in France - confirms that private consumption performed poorly as it declined by 0.1%. |
| Inflation remained high despite the weaker growth path that the Eurozone economy is on in 2018 but mainly driven by higher energy prices. The energy index increased by 9.4% YoY. These effects will weaken over the coming months, bringing the inflation rate more in line with core inflation. The core rate picked up to 1.1%, which is where it was in May as well. This is still weak and very much in line with ECB expectations. As the energy effects are temporary, the high inflation rate should be taken with a grain of salt from a policy perspective at the moment, so will the ECB. | Inflation remained high despite the weaker growth path that the Eurozone economy is on in 2018 but mainly driven by higher energy prices. The energy index increased by 9.4% YoY. These effects will weaken over the coming months, bringing the inflation rate more in line with core inflation. The core rate picked up to 1.1%, which is where it was in May as well. This is still weak and very much in line with ECB expectations. As the energy effects are temporary, the high inflation rate should be taken with a grain of salt from a policy perspective at the moment, so will the ECB. |
| The implications of the lower cruising speed of the Eurozone economy are quite clear. The weaker cyclical picture and low core inflation provide little reason for the ECB to increase rates before autumn next year. | The implications of the lower cruising speed of the Eurozone economy are quite clear. The weaker cyclical picture and low core inflation provide little reason for the ECB to increase rates before autumn next year. |
| Royal Bank of Scotland has welcomed (unsurprisingly) the FCA statement. Chairman Howard Davies said: | Royal Bank of Scotland has welcomed (unsurprisingly) the FCA statement. Chairman Howard Davies said: |
| The Board welcomes the FCA’s confirmation that it has concluded its investigation into the bank and that no further action will be taken. We await the publication of the FCA’s full account and will reflect carefully on its findings to learn any further lessons from what was a hugely challenging time for the bank, its customers and the wider economy. | The Board welcomes the FCA’s confirmation that it has concluded its investigation into the bank and that no further action will be taken. We await the publication of the FCA’s full account and will reflect carefully on its findings to learn any further lessons from what was a hugely challenging time for the bank, its customers and the wider economy. |
| The Board continues to focus on putting things right for customers through our complaints process and ensuring that past mistakes cannot be repeated. The way the bank deals with business customers in financial difficulty is fundamentally different now. | The Board continues to focus on putting things right for customers through our complaints process and ensuring that past mistakes cannot be repeated. The way the bank deals with business customers in financial difficulty is fundamentally different now. |
| As a reminder, here is our story from February which includes details of how RBS mistreated its business customers: | As a reminder, here is our story from February which includes details of how RBS mistreated its business customers: |
| Elsewhere, the Financial Conduct Authority has said it can take no action to discipline Royal Bank of Scotland management over the mistreatment of small and medium sized businesses through its Global Restructuring Group subsidiary. Andrew Bailey, FCA chief executive said: | Elsewhere, the Financial Conduct Authority has said it can take no action to discipline Royal Bank of Scotland management over the mistreatment of small and medium sized businesses through its Global Restructuring Group subsidiary. Andrew Bailey, FCA chief executive said: |
| Given the serious concerns that were identified in the independent review it was only right that we launched a comprehensive and forensic investigation to see if there was any action that could be taken against senior management or RBS. It is important to recognise that the business of GRG was largely unregulated and the FCA’s powers to take action in such circumstances, even where the mistreatment of customers has been identified and accepted, are very limited. Taking action was therefore always going to be difficult and challenging but after carefully considering all the evidence we have concluded that our powers to discipline for misconduct do not apply and that an action in relation to senior management for lack of fitness and propriety would not have reasonable prospects of success. | Given the serious concerns that were identified in the independent review it was only right that we launched a comprehensive and forensic investigation to see if there was any action that could be taken against senior management or RBS. It is important to recognise that the business of GRG was largely unregulated and the FCA’s powers to take action in such circumstances, even where the mistreatment of customers has been identified and accepted, are very limited. Taking action was therefore always going to be difficult and challenging but after carefully considering all the evidence we have concluded that our powers to discipline for misconduct do not apply and that an action in relation to senior management for lack of fitness and propriety would not have reasonable prospects of success. |
| We have consulted with independent, external leading counsel who has confirmed that the FCA’s conclusions are correct and reasonable. | We have consulted with independent, external leading counsel who has confirmed that the FCA’s conclusions are correct and reasonable. |
| I appreciate that many GRG customers will be frustrated by this decision but we have explored all the options available to us before arriving at this conclusion. | I appreciate that many GRG customers will be frustrated by this decision but we have explored all the options available to us before arriving at this conclusion. |
| The fact that we can’t take action in no way condones the behaviour of RBS. We expect high standards from the firms we regulate and RBS fell well short in its treatment of GRG customers. | The fact that we can’t take action in no way condones the behaviour of RBS. We expect high standards from the firms we regulate and RBS fell well short in its treatment of GRG customers. |
| We feel strongly that those companies that have suffered loss as a result of how they were treated whilst in GRG must be appropriately compensated. We are closely monitoring the complaints process overseen by Sir William Blackburne, an independent third party, to ensure that things are put right. | We feel strongly that those companies that have suffered loss as a result of how they were treated whilst in GRG must be appropriately compensated. We are closely monitoring the complaints process overseen by Sir William Blackburne, an independent third party, to ensure that things are put right. |
| Meanwhile eurozone inflation has come in higher than forecast. | Meanwhile eurozone inflation has come in higher than forecast. |
| The headline figure rose by 2.1% year on year in July compared to 2% the month before and expectations of an unchanged number. | The headline figure rose by 2.1% year on year in July compared to 2% the month before and expectations of an unchanged number. |
| Eurozone GDP grew by 2.1% year on year in the second quarter, down from 2.5% and lower than the forecast 2.2%. | Eurozone GDP grew by 2.1% year on year in the second quarter, down from 2.5% and lower than the forecast 2.2%. |
| On a quarter by quarter basis it grew by 0.3%, compared to expectations of a 0.4% rise. | On a quarter by quarter basis it grew by 0.3%, compared to expectations of a 0.4% rise. |
| Two more big fallers after updates, this time in the mid-cap FTSE 250. | Two more big fallers after updates, this time in the mid-cap FTSE 250. |
| Building materials group Travis Perkins is down nearly 10% after it warned 2018 operating profits would be at the lower end of expectations. The company, which owns the Wickes chain, blamed weak demand in the home DIY market. | Building materials group Travis Perkins is down nearly 10% after it warned 2018 operating profits would be at the lower end of expectations. The company, which owns the Wickes chain, blamed weak demand in the home DIY market. |
| Meanwhile Games Workshop, whose shares have been strong performers recently, is down more than 6% despite reporting a near doubling of full year profits to £74.5m. | Meanwhile Games Workshop, whose shares have been strong performers recently, is down more than 6% despite reporting a near doubling of full year profits to £74.5m. |
| Germany’s jobless total fell by 6,000 in July to 2.338m, compared to expectations of a 10,000 decline. The unemployment rate was steady at 5.2%, as forecast. | Germany’s jobless total fell by 6,000 in July to 2.338m, compared to expectations of a 10,000 decline. The unemployment rate was steady at 5.2%, as forecast. |
| Here’s our story on the Dixons Carphone data breach: | Here’s our story on the Dixons Carphone data breach: |
| Dixons Carphone said an investigation into a massive data breach has found personal data belonging to 10 million customers may have been accessed last year, nearly 10 times as many as initially thought. | Dixons Carphone said an investigation into a massive data breach has found personal data belonging to 10 million customers may have been accessed last year, nearly 10 times as many as initially thought. |
| The electronics retailer had estimated the attack involved unauthorised access to 1.2m personal records, when it first reported the breach in June. It said there was no evidence of any fraud. | The electronics retailer had estimated the attack involved unauthorised access to 1.2m personal records, when it first reported the breach in June. It said there was no evidence of any fraud. |
| Alex Baldock, chief executive, said: “Since our data security review uncovered last year’s breach, we’ve been working around the clock to put it right. That’s included closing off the unauthorised access, adding new security measures and launching an immediate investigation, which has allowed us to build a fuller understanding of the incident that we’re updating on today. | Alex Baldock, chief executive, said: “Since our data security review uncovered last year’s breach, we’ve been working around the clock to put it right. That’s included closing off the unauthorised access, adding new security measures and launching an immediate investigation, which has allowed us to build a fuller understanding of the incident that we’re updating on today. |
| “Again, we’re disappointed in having fallen short here, and very sorry for any distress we’ve caused our customers. I want to assure them that we remain fully committed to making their personal data safe with us.” | “Again, we’re disappointed in having fallen short here, and very sorry for any distress we’ve caused our customers. I want to assure them that we remain fully committed to making their personal data safe with us.” |
| The company said records containing personal data such as names, addresses or email addresses had been accessed, but not financial information. It is writing to customers to apologise for the data breach, but does not plan to pay compensation as there is no evidence that anyone has suffered any financial loss. | The company said records containing personal data such as names, addresses or email addresses had been accessed, but not financial information. It is writing to customers to apologise for the data breach, but does not plan to pay compensation as there is no evidence that anyone has suffered any financial loss. |
| “While there is no evidence that some of this data may have left our systems, these records do not contain payment card or bank account details and there is no evidence that any fraud has resulted,” Dixons said. | “While there is no evidence that some of this data may have left our systems, these records do not contain payment card or bank account details and there is no evidence that any fraud has resulted,” Dixons said. |
| The full report is here: | The full report is here: |
| Some big falls on the FTSE 100 from company’s reporting results. | Some big falls on the FTSE 100 from company’s reporting results. |
| Rentokil Initial is down 4.4% after half year profits dropped 81.5% although last year’s figure included a one off £462m profit on the disposal of its workwear business. Revenues fell 4.7%. | Rentokil Initial is down 4.4% after half year profits dropped 81.5% although last year’s figure included a one off £462m profit on the disposal of its workwear business. Revenues fell 4.7%. |
| Standard Chartered is 3.4% lower despite a 34% rise in profits, as worries about a trade war unsettle investors. | Standard Chartered is 3.4% lower despite a 34% rise in profits, as worries about a trade war unsettle investors. |
| And British Gas owner Centrica is down 3.5% as it reported a 20% fall in profits at its consumer division and announced the loss of another 226,000 customers or 1% in the first half. Neil Wilson, chief market analyst at Markets.com said: | And British Gas owner Centrica is down 3.5% as it reported a 20% fall in profits at its consumer division and announced the loss of another 226,000 customers or 1% in the first half. Neil Wilson, chief market analyst at Markets.com said: |
| Centrica results make for some grim reading again but management does sound a little more confident than the talk of ‘material uncertainty’ we got at the start of the year... | Centrica results make for some grim reading again but management does sound a little more confident than the talk of ‘material uncertainty’ we got at the start of the year... |
| The UK Consumer division is leaking cash and customers. Although the customer churn has slowed with accounts down just 1%, profits there fell 20%. The cold snap could have been good for Centrica but higher wholesale costs, fewer customer accounts and the prepayment cap all weighed on profits. | The UK Consumer division is leaking cash and customers. Although the customer churn has slowed with accounts down just 1%, profits there fell 20%. The cold snap could have been good for Centrica but higher wholesale costs, fewer customer accounts and the prepayment cap all weighed on profits. |
| And while it’s slowing, the loss of customers needs to be arrested fast – cutting costs is working for now but is not sustainable longer term. Centrica lost 226,000 customers in the first half and the fact that this is flagged as a better performance than previously shows just how bad the situation is. | And while it’s slowing, the loss of customers needs to be arrested fast – cutting costs is working for now but is not sustainable longer term. Centrica lost 226,000 customers in the first half and the fact that this is flagged as a better performance than previously shows just how bad the situation is. |
| It’s a cautious opening for European markets, with a raft of company results, some key economic data ahead and continuing concerns about valuations in the technology sector after major falls for Facebook and Twitter. | It’s a cautious opening for European markets, with a raft of company results, some key economic data ahead and continuing concerns about valuations in the technology sector after major falls for Facebook and Twitter. |
| The FTSE 100 is up 0.07%, while Germany’s Dax edged 0.1% higher but France’s Cac fell 0.1% and Italy’s FTSE MIB dipped 0.04%. | The FTSE 100 is up 0.07%, while Germany’s Dax edged 0.1% higher but France’s Cac fell 0.1% and Italy’s FTSE MIB dipped 0.04%. |
| The Bank of Japan’s actions today continue its dovish tendencies. Viraj Patel, foreign exchange strategist at ING Bank said: | The Bank of Japan’s actions today continue its dovish tendencies. Viraj Patel, foreign exchange strategist at ING Bank said: |
| When it comes to the July BoJ meeting, there was more than meets the eye – with the central bank making subtle, yet curious, tweaks to its unconventional policy artillery. But if anyone was in doubt, the super-easy BoJ policy is still very much in place; while officials will allow for greater flexibility in long-term yields, it’s important to stress the two-way flexibility here (not just upwards, but also downwards). In fact, by firmly restating the annual ¥80trn JGB purchase target, the BoJ are showing no real appetite for a rapid rise in long-term yields (there was explicit aversion to this in the statement). What sealed the dovish deal was the guidance that the BoJ will ‘maintain very low rate levels for an extended period of time’ – which is not too dissimilar to what the ECB stated last month. | When it comes to the July BoJ meeting, there was more than meets the eye – with the central bank making subtle, yet curious, tweaks to its unconventional policy artillery. But if anyone was in doubt, the super-easy BoJ policy is still very much in place; while officials will allow for greater flexibility in long-term yields, it’s important to stress the two-way flexibility here (not just upwards, but also downwards). In fact, by firmly restating the annual ¥80trn JGB purchase target, the BoJ are showing no real appetite for a rapid rise in long-term yields (there was explicit aversion to this in the statement). What sealed the dovish deal was the guidance that the BoJ will ‘maintain very low rate levels for an extended period of time’ – which is not too dissimilar to what the ECB stated last month. |
| Back in the UK, and Dixons Carphone had previously announced it had found unauthorised access to some of its data. Now it says that around 10m records containing personal data may have been affected in 2017. | Back in the UK, and Dixons Carphone had previously announced it had found unauthorised access to some of its data. Now it says that around 10m records containing personal data may have been affected in 2017. |
| It says there is evidence some of this data may have left its systems but it maintains these records did not contain payment card or bank account details and there is no evidence of any fraud being committed. It is now contacting all of its customers to apologise and advise them of the steps they need to take to minimise the risk of fraud. | It says there is evidence some of this data may have left its systems but it maintains these records did not contain payment card or bank account details and there is no evidence of any fraud being committed. It is now contacting all of its customers to apologise and advise them of the steps they need to take to minimise the risk of fraud. |
| German consumers are spending freely according to the latest retail sales figures. | German consumers are spending freely according to the latest retail sales figures. |
| They rose 3% year on year in June, up from a 1.2% rise in May and much better than the 1.5% increase expected by analysts. The month on month figure showed a 1.2% increase, compared to a 1.5% decline in May. | They rose 3% year on year in June, up from a 1.2% rise in May and much better than the 1.5% increase expected by analysts. The month on month figure showed a 1.2% increase, compared to a 1.5% decline in May. |
| Here are the opening calls for the European markets from IG: | Here are the opening calls for the European markets from IG: |
| European Opening Calls:#FTSE 7698 -0.04%#DAX 12806 +0.06%#CAC 5484 -0.14%#MIB 21941 +0.00%#IBEX 9849 -0.05% | European Opening Calls:#FTSE 7698 -0.04%#DAX 12806 +0.06%#CAC 5484 -0.14%#MIB 21941 +0.00%#IBEX 9849 -0.05% |
| In Asia the Hang Seng is down 0.53% while the Nikkei 225 is up 0.039%. | In Asia the Hang Seng is down 0.53% while the Nikkei 225 is up 0.039%. |
| 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. |
| Investors will be anticipating another nervy day on the markets after a weak start to the week. The technology drop which followed last week’s poor results from Facebook and Twitter continued on Monday, with the Nasdaq Composite recording its third decline of more than 1% in a row. Will Apple, which reports later, be able to turn the tide? Michael Hewson, chief market analyst at CMC Markets UK, said: | Investors will be anticipating another nervy day on the markets after a weak start to the week. The technology drop which followed last week’s poor results from Facebook and Twitter continued on Monday, with the Nasdaq Composite recording its third decline of more than 1% in a row. Will Apple, which reports later, be able to turn the tide? Michael Hewson, chief market analyst at CMC Markets UK, said: |
| Apple shares managed to outperform [on Monday], only declining 0.5%, but only because investors are looking ahead to tonight’s Q3 earnings announcement, but even here there may be cause for concern. Lower average selling prices at its Q2 update suggested that buyers were opting for cheaper models, perhaps indicating that iPhone X sales may have peaked. Whether this is true or not is likely to be difficult to determine given that Q3 tends to be a weak quarter in any case, as it tends to be a precursor to a range of new product launches or updates, which tend to happen in Q4. | Apple shares managed to outperform [on Monday], only declining 0.5%, but only because investors are looking ahead to tonight’s Q3 earnings announcement, but even here there may be cause for concern. Lower average selling prices at its Q2 update suggested that buyers were opting for cheaper models, perhaps indicating that iPhone X sales may have peaked. Whether this is true or not is likely to be difficult to determine given that Q3 tends to be a weak quarter in any case, as it tends to be a precursor to a range of new product launches or updates, which tend to happen in Q4. |
| Of more importance will be its burgeoning services business, which includes music, games, apps and Apple pay fees, and which has slowly grown in importance, and has seen revenues rise consistently since 2012. | Of more importance will be its burgeoning services business, which includes music, games, apps and Apple pay fees, and which has slowly grown in importance, and has seen revenues rise consistently since 2012. |
| It is a busy day for company results ahead of the start of the summer lull, with BP already reporting its first dividend hike since 2014. | It is a busy day for company results ahead of the start of the summer lull, with BP already reporting its first dividend hike since 2014. |
| On the economic front we have eurozone GDP figures, with the second quarter expected to show a dip from 2.5% to 2.2% on an annualised basis. Initial July inflation figures for the bloc are forecast to remain at 2% on a headline basis, with the core number edging back to 1%. Hewson said: | On the economic front we have eurozone GDP figures, with the second quarter expected to show a dip from 2.5% to 2.2% on an annualised basis. Initial July inflation figures for the bloc are forecast to remain at 2% on a headline basis, with the core number edging back to 1%. Hewson said: |
| Last week the European Central Bank signed off for its summer break by playing down expectations that we’d see a rate rise much before the end of Q3 next year, and this candour from President Mario Draghi went some way to help push the euro down towards the bottom end of its recent range. | Last week the European Central Bank signed off for its summer break by playing down expectations that we’d see a rate rise much before the end of Q3 next year, and this candour from President Mario Draghi went some way to help push the euro down towards the bottom end of its recent range. |
| Since then we’ve seen it start to edge back up again despite a strong US Q2 GDP number, which has seen US rates edge back up again, and today’s latest preliminary flash EU CPI number for July could well prompt a further recovery towards the 1.1800 area. Inflation pressures have popped higher in recent months, helped by rising energy prices, however these do appear to have stalled a little, particularly given that core prices dropped below 1% in June to 0.9%. | Since then we’ve seen it start to edge back up again despite a strong US Q2 GDP number, which has seen US rates edge back up again, and today’s latest preliminary flash EU CPI number for July could well prompt a further recovery towards the 1.1800 area. Inflation pressures have popped higher in recent months, helped by rising energy prices, however these do appear to have stalled a little, particularly given that core prices dropped below 1% in June to 0.9%. |
| Earlier the Bank of Japan said it would be more flexible in its asset purchase programme, and vowed to keep interest rates low for the time being. | Earlier the Bank of Japan said it would be more flexible in its asset purchase programme, and vowed to keep interest rates low for the time being. |
| Also today, the Financial Conduct Authority is due to publish its latest report on its investigation into Royal Bank of Scotland’s mistreatment of small and medium sized businesses through its global restructuring group. | Also today, the Financial Conduct Authority is due to publish its latest report on its investigation into Royal Bank of Scotland’s mistreatment of small and medium sized businesses through its global restructuring group. |
| Agenda: | Agenda: |
| 10.00 BST Eurozone inflation and GDP | 10.00 BST Eurozone inflation and GDP |
| 10.00 BST FCA report into Royal Bank of Scotland | 10.00 BST FCA report into Royal Bank of Scotland |
| 13.30 BST US personal spending figures | 13.30 BST US personal spending figures |