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| Investors poised for US rate hike - business live | Investors poised for US rate hike - business live |
| (about 1 hour later) | |
| More on the AA, which has blamed a UK “pothole epidemic” caused by the “beast from the east” and low road maintenance spending for a sharp fall in half-year profits. | |
| The roadside assistance service had to deal with 1.91m breakdowns in the six months to July, up 8% from a year earlier. The AA estimates that potholes are costing drivers and their insurers at least £1m a month due to big car repair bills. | |
| The Local Government Association says councils are fixing a pothole every 21 seconds but it will still take more than £9bn and more than a decade to clear the local roads repair backlog completely, after decades of underfunding. | |
| The government’s austerity programme since the financial crisis made things worse. Councils have had their real spending power (government funding plus council tax) reduced by 29% between 2010/11 and 2017/18. | |
| Simon Breakwell, the AA chief executive, said this morning: | |
| We’ve had a 15-year high in breakdowns, we had the worst winter back to back with the hottest summer, all of which causes everyone to drive their cars and more cars on the road generally means more breakdowns. | |
| Sometimes you have a rubbish winter and sometimes you have a really hot summer but it’s rare that you have a rubbish winter back to back with the hottest summer. | |
| Oil prices have eased off today, but are still on course for a fifth consecutive quarterly gain as Iran sanctions keep prices at near late 2014 highs. | |
| Brent crude is down 0.3% or 24 cents at $81.63 a barrel, having risen to $82.55 on Tuesday. | |
| Retail sales growth slowed less than expected in September, according to the CBI’s monthly survey of the sector. | |
| Of the retailers surveyed, a balance of +23% said sales were up compared with a year ago. That was down from +29% in August, but better than the +16% predicted by City economists. | |
| However, the business lobby group cautioned the outlook for retailers was tough in the months ahead, as consumer finances remain under pressure and business costs rise. | |
| Anna Leach, CBI head of economic intelligence, said: | |
| As we head into Autumn, retailers have seen the run of decent sales figures continue. But underlying conditions are clearly tougher, with the sector facing significant challenges – from squeezed household incomes, changing consumer habits to digital disruption. | |
| So, policymakers must be conscious that times are harder for retailers than recent data suggests. With the burden of business rates stifling investment – against the backdrop of an already tough trading environment – the Government must deliver a review of the system over the coming year. | |
| A Fed rate hike this evening is already old news before it’s happened, with investors pricing it in as a certainty. | A Fed rate hike this evening is already old news before it’s happened, with investors pricing it in as a certainty. |
| Instead they will be turning their attention to the months ahead, with traders listening out for clues on whether or not the next hike will come in December. | Instead they will be turning their attention to the months ahead, with traders listening out for clues on whether or not the next hike will come in December. |
| Fed dots to harden views for December move: Decision-Day Guide https://t.co/tL6T7vHpaU | Fed dots to harden views for December move: Decision-Day Guide https://t.co/tL6T7vHpaU |
| The pound is lower this morning as investors remain cautious about prospects for Brexit negotiations between the UK and the EU. | The pound is lower this morning as investors remain cautious about prospects for Brexit negotiations between the UK and the EU. |
| It had recovered in recent sessions after the biggest one-day loss since 2016 on Friday, when Theresa May said talks were at an “impasse”. | It had recovered in recent sessions after the biggest one-day loss since 2016 on Friday, when Theresa May said talks were at an “impasse”. |
| The pound is currently down 0.1% against the dollar at $1.3163 and down 0.1% against the euro at €1.1187. | The pound is currently down 0.1% against the dollar at $1.3163 and down 0.1% against the euro at €1.1187. |
| Britain’s high street banks approved 42,581 mortgages for house purchase in August, which was 4.3% fewer than the same month last year. | Britain’s high street banks approved 42,581 mortgages for house purchase in August, which was 4.3% fewer than the same month last year. |
| It was also down on July, when 43,967 mortgages were approved according to the figures from the banking trade body, UK Finance. | It was also down on July, when 43,967 mortgages were approved according to the figures from the banking trade body, UK Finance. |
| Remortgaging increased however, by 9.2% to 32,457, as home owners took advantage of a competitive market with some decent deals. | Remortgaging increased however, by 9.2% to 32,457, as home owners took advantage of a competitive market with some decent deals. |
| Mark Harris, chief executive of mortgage broker SPF Private Clients, said lenders were competing for customers as potential home movers become more cautious ahead of Brexit: | Mark Harris, chief executive of mortgage broker SPF Private Clients, said lenders were competing for customers as potential home movers become more cautious ahead of Brexit: |
| With many would-be buyers holding off making a decision until Brexit is resolved one way or another, lenders are battling for a relatively small pool of borrowers and are having to reduce rates accordingly. | With many would-be buyers holding off making a decision until Brexit is resolved one way or another, lenders are battling for a relatively small pool of borrowers and are having to reduce rates accordingly. |
| Barclays, HSBC, Halifax and TSB are among the big names to have reduced the cost of fixed-rate mortgages recently, and we expect this trend to continue as lenders try to boost business before the end of the year. | Barclays, HSBC, Halifax and TSB are among the big names to have reduced the cost of fixed-rate mortgages recently, and we expect this trend to continue as lenders try to boost business before the end of the year. |
| In case you missed it... the governor of Argentina’s central bank, Luis Caputo, resigned unexpectedly on Tuesday after just three months in the job. | In case you missed it... the governor of Argentina’s central bank, Luis Caputo, resigned unexpectedly on Tuesday after just three months in the job. |
| Caputo quit just as Argentina is negotiating emergency financial support from the IMF, initially sending the peso down 7%, before trimming some of the losses. | Caputo quit just as Argentina is negotiating emergency financial support from the IMF, initially sending the peso down 7%, before trimming some of the losses. |
| Investor concern over economic prospects and debts in Argentina have sent the peso down more than 50% this year, and inflation is expected to top 40%. | Investor concern over economic prospects and debts in Argentina have sent the peso down more than 50% this year, and inflation is expected to top 40%. |
| The central bank said in a statement: | The central bank said in a statement: |
| This resignation is due to personal reasons, with the conviction that a new agreement with the International Monetary Fund will reestablish confidence in the fiscal, financial, monetary and exchange rate situation. | This resignation is due to personal reasons, with the conviction that a new agreement with the International Monetary Fund will reestablish confidence in the fiscal, financial, monetary and exchange rate situation. |
| However, Paul Greer at Fidelity was not convinced: | However, Paul Greer at Fidelity was not convinced: |
| The timing could not be worse for Argentina. Caputo’s resignation will only add to investor uncertainty. | The timing could not be worse for Argentina. Caputo’s resignation will only add to investor uncertainty. |
| The FTSE 250 index, which tends to include firms that are more focused on the domestic market in the UK than those in the FTSE 100, is also down this morning, by 0.2% at 20,422. | The FTSE 250 index, which tends to include firms that are more focused on the domestic market in the UK than those in the FTSE 100, is also down this morning, by 0.2% at 20,422. |
| It’s biggest faller is the AA, with shares down 8.4% at 109p after it blamed a plunge in first-half profits on Britain’s “pothole epidemic”. | It’s biggest faller is the AA, with shares down 8.4% at 109p after it blamed a plunge in first-half profits on Britain’s “pothole epidemic”. |
| Major markets across Europe are down this morning, after Wall Street closed lower on Tuesday. | Major markets across Europe are down this morning, after Wall Street closed lower on Tuesday. |
| Investors will be cautious ahead of the Fed decision and more importantly its signals for future policy decisions, but markets are also subdued after President Trump’s “America First” message at the UN. | Investors will be cautious ahead of the Fed decision and more importantly its signals for future policy decisions, but markets are also subdued after President Trump’s “America First” message at the UN. |
| The latest scores: | The latest scores: |
| FTSE 100: -0.1% at 7,500 | FTSE 100: -0.1% at 7,500 |
| Germany’s DAX: -0.1% at 12,365 | Germany’s DAX: -0.1% at 12,365 |
| France’s CAC: -0.1% at 5,474 | France’s CAC: -0.1% at 5,474 |
| Italy’s FTSE MIB: -0.4% at 21,586 | Italy’s FTSE MIB: -0.4% at 21,586 |
| Spain’s IBEX: -0.02% at 9,492 | Spain’s IBEX: -0.02% at 9,492 |
| Europe’s STOXX 600: -0.1% at 383 | Europe’s STOXX 600: -0.1% at 383 |
| The AA has said this morning that the “beast from the east” earlier in the year triggered a “pothole epidemic” in the UK, and contributing to the highest number of vehicle breakdown call outs in 15 years. | The AA has said this morning that the “beast from the east” earlier in the year triggered a “pothole epidemic” in the UK, and contributing to the highest number of vehicle breakdown call outs in 15 years. |
| The breakdown recovery service said the trend drove pre-tax profits down 65% in the six months to 31 July, to £28m. | The breakdown recovery service said the trend drove pre-tax profits down 65% in the six months to 31 July, to £28m. |
| Simon Breakwell, AA chief executive, said: | Simon Breakwell, AA chief executive, said: |
| The first half of the financial year has seen exceptional weather conditions, from extreme cold and snow in February and March to the hottest summer in recent memory, with the severe winter also creating a pothole “epidemic” on the UK’s roads. All this led to a 15-year high in the number of breakdowns we serviced. | The first half of the financial year has seen exceptional weather conditions, from extreme cold and snow in February and March to the hottest summer in recent memory, with the severe winter also creating a pothole “epidemic” on the UK’s roads. All this led to a 15-year high in the number of breakdowns we serviced. |
| Against this backdrop, I am extremely proud of our achievements and to be reporting results in line with our guidance as we continue to build resilience throughout the business. | Against this backdrop, I am extremely proud of our achievements and to be reporting results in line with our guidance as we continue to build resilience throughout the business. |
| Full story here: | Full story here: |
| A rate hike from the Federal Reserve today would be the eighth one since December 2015, Michael Hewson from CMC Markets notes. | A rate hike from the Federal Reserve today would be the eighth one since December 2015, Michael Hewson from CMC Markets notes. |
| The only G7 central bank that has come anywhere close to this level of tightening of monetary policy has been Canada which has seen four rate rises over the same period. | The only G7 central bank that has come anywhere close to this level of tightening of monetary policy has been Canada which has seen four rate rises over the same period. |
| Despite these rate rises, US and Canadian markets have managed to remain close to recent record highs, despite concerns over a break down in the NAFTA trade deal and the start of a fresh round of tariffs this week in the current trade stand-off between the US and China. | Despite these rate rises, US and Canadian markets have managed to remain close to recent record highs, despite concerns over a break down in the NAFTA trade deal and the start of a fresh round of tariffs this week in the current trade stand-off between the US and China. |
| If the FOMC is particularly aggressive in terms of its rate outlook, and in terms of its assessment of the health of the US economy, then we could well see further US dollar strength in emerging market currencies. | If the FOMC is particularly aggressive in terms of its rate outlook, and in terms of its assessment of the health of the US economy, then we could well see further US dollar strength in emerging market currencies. |
| If on the other hand they are more cautious and signal it may be time for a pause then the US dollar could come under additional pressure, given recent weakness. | If on the other hand they are more cautious and signal it may be time for a pause then the US dollar could come under additional pressure, given recent weakness. |
| 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. |
| It’s Fed decision day, and investors are pricing in the third US rate hike of the year, as the central bank’s chairman Jerome Powell and his colleagues continue to displease President Trump who has said he is not happy with the rate rises. | It’s Fed decision day, and investors are pricing in the third US rate hike of the year, as the central bank’s chairman Jerome Powell and his colleagues continue to displease President Trump who has said he is not happy with the rate rises. |
| The decision will be announced at 7pm UK time, and anything other than a rate hike will come as a major shock to markets. | The decision will be announced at 7pm UK time, and anything other than a rate hike will come as a major shock to markets. |
| The dollar index, which measures the US currency against a basket of other major currencies, is edging higher ahead of the decision. | The dollar index, which measures the US currency against a basket of other major currencies, is edging higher ahead of the decision. |
| Fed likely to raise rates, possibly end 'accommodative' policy era https://t.co/ASX9OmyIsh | Fed likely to raise rates, possibly end 'accommodative' policy era https://t.co/ASX9OmyIsh |
| What investors really want to know is, what does the Fed have planned next? | What investors really want to know is, what does the Fed have planned next? |
| Jasper Lawler, from London Capital Group, explains: | Jasper Lawler, from London Capital Group, explains: |
| The Fed are widely expected to hike 25 basis points to 2.25%, in the 3rd hike of the year. Whilst this hike is almost completely priced in and another in December over 76% priced in, investors will be turning their attention to next year. | The Fed are widely expected to hike 25 basis points to 2.25%, in the 3rd hike of the year. Whilst this hike is almost completely priced in and another in December over 76% priced in, investors will be turning their attention to next year. |
| In June, the Fed indicated 3 hikes across 2019 and these are expected to be carried out one per quarter, for the first three quarters. This leaves traders wondering what the Fed have planned thereafter? | In June, the Fed indicated 3 hikes across 2019 and these are expected to be carried out one per quarter, for the first three quarters. This leaves traders wondering what the Fed have planned thereafter? |
| A hawkish plan could re-ignite the dollar rally, whilst suggestions of a slow down in the pace of hiking or that the Fed is coming to the end of its cycle next year, could bring the dollar tumbling lower. | A hawkish plan could re-ignite the dollar rally, whilst suggestions of a slow down in the pace of hiking or that the Fed is coming to the end of its cycle next year, could bring the dollar tumbling lower. |
| Also coming up today... | Also coming up today... |
| 9.30am BST: UK mortgage approvals data for August | 9.30am BST: UK mortgage approvals data for August |
| 11am BST: CBI distributive trades survey for September, which give a snapshot of the UK retail sector | 11am BST: CBI distributive trades survey for September, which give a snapshot of the UK retail sector |