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| Credit card demand faces record drop as Brexit spooks borrowers - business live | Credit card demand faces record drop as Brexit spooks borrowers - business live |
| (about 1 hour later) | |
| Over in Greece, where the government has survived a late-night confidence vote, fears of snap elections have been put on the back burner. | |
| However, ministers’ relief is being clouded by warnings that, once again, Athens is dragging its feet on reforms. | |
| A jubilant Alexis Tsipras may have survived the vote - welcoming his narrow 151-148 ballot victory as “a vote of confidence in stability ” - but the challenges before him are far from over. | |
| The first is passage of the landmark Macedonia name-change accord that prompted the leftist leader to call the confidence motion after the Independent Greeks party, his coalition’s junior partner, quit in protest over it. Pulling the same hat trick is far from certain. With the centrist Potami party wavering, it remains unsure if he will win a decisive majority. | |
| Although Tsipras has touted the renewal of confidence in his government as the card he needs to push ahead with other initiatives – from increasing the minimum wage to implementing a new payment scheme for unpaid social security contributions - his government faces growing pressure from the creditors who have bailed out the debt-stricken country to keep up with reforms. | |
| Addressing the Greek-French chamber of commerce and industry in Athens on Wednesday night, the EU Economic and Financial Affairs Commissioner Pierre Moscovici said it was crucial that politicians stayed the course. “Greece has not yet reached the end of the road,” he said insisting that five months after exiting its third international bailout, foreign auditors were still watching the country closely. “The coming weeks will be decisive … it is very important that politicians don’t disengage from the agenda of reforms.” | |
| Auditors, who return to Greece next week, are especially worried about Tsipras’ pledge to push ahead with handouts – not least raising the minimum wage – and the high stock of nonperforming loans in Greek banks which have played a central role in impeding Athens’ hopes of returning to capital markets. | |
| Like every government before it, the Tsipras administration faces immense anger over enforcement of reforms with thousands of teachers taking to the streets- and civil servants walking off the job - today. | |
| Ouch. Over in New York, Morgan Stanley has just missed Wall Street forecasts. | Ouch. Over in New York, Morgan Stanley has just missed Wall Street forecasts. |
| The bank posted profit of 80 cents per share, below the 89 cent average estimate of analysts surveyed by Refinitiv. | The bank posted profit of 80 cents per share, below the 89 cent average estimate of analysts surveyed by Refinitiv. |
| Revenue declined by 10% to $8.55bn -- analysts expected $9.3bn. | Revenue declined by 10% to $8.55bn -- analysts expected $9.3bn. |
| Both its trading and wealth management divisions missed forecasts. | Both its trading and wealth management divisions missed forecasts. |
| Morgan Stanley drops more than 4% in pre-market trading after missing profit and revenue estimates after volatile markets took a toll on trading, wealth management https://t.co/5IrEn1RrNX pic.twitter.com/Li7DuTv5f4 | Morgan Stanley drops more than 4% in pre-market trading after missing profit and revenue estimates after volatile markets took a toll on trading, wealth management https://t.co/5IrEn1RrNX pic.twitter.com/Li7DuTv5f4 |
| UK lenders have become pickier about who they hand credit cards to, the Bank of England’s credit conditions survey shows. | UK lenders have become pickier about who they hand credit cards to, the Bank of England’s credit conditions survey shows. |
| It also highlights that risk appetite has been declining for the last couple of years: | It also highlights that risk appetite has been declining for the last couple of years: |
| Economist Howard Archer of the EY ITEM Club says economic uncertainty is hitting demand for credit: | Economist Howard Archer of the EY ITEM Club says economic uncertainty is hitting demand for credit: |
| Latest #BankofEngland #credit conditions survey indicates heightened uncertainties are expected to weigh down on #consumer borrowing & affect #economic activity. #UK #lenders see demand for #mortgages, credit cards plummeting before #Brexit - #BOE https://t.co/BAG4oiA3Gm | Latest #BankofEngland #credit conditions survey indicates heightened uncertainties are expected to weigh down on #consumer borrowing & affect #economic activity. #UK #lenders see demand for #mortgages, credit cards plummeting before #Brexit - #BOE https://t.co/BAG4oiA3Gm |
| Business Today: sign up for a morning shot of financial news | Business Today: sign up for a morning shot of financial news |
| Brexit is having an even bigger impact on credit card lending than the financial crisis of 2008, points out Andy Bruce from Reuters: | Brexit is having an even bigger impact on credit card lending than the financial crisis of 2008, points out Andy Bruce from Reuters: |
| Record drop in demand for credit cards expected by UK lenders ahead of Brexit - BoE survey pic.twitter.com/JAEiTlIPOK | Record drop in demand for credit cards expected by UK lenders ahead of Brexit - BoE survey pic.twitter.com/JAEiTlIPOK |
| NEWSFLASH: Demand for mortgages and credit is sliding as UK consumers brace for Brexit. | NEWSFLASH: Demand for mortgages and credit is sliding as UK consumers brace for Brexit. |
| The Bank of England has just reported that demand for new house loans in January-March is likely to fall at the fastest pace since 2011. | The Bank of England has just reported that demand for new house loans in January-March is likely to fall at the fastest pace since 2011. |
| Demand for credit card lending is also shrivelling, and expected to fall at the fastest rate since records began in 2007, the BoE adds. | Demand for credit card lending is also shrivelling, and expected to fall at the fastest rate since records began in 2007, the BoE adds. |
| This suggests that worried consumers are putting house moves and purchases on hold, as they worry about the UK’s future, with parliament still deadlocked the way forward. | This suggests that worried consumers are putting house moves and purchases on hold, as they worry about the UK’s future, with parliament still deadlocked the way forward. |
| This data comes from the Bank’s latest credit conditions survey, just released. It’s based on data from bank and building society lenders. | This data comes from the Bank’s latest credit conditions survey, just released. It’s based on data from bank and building society lenders. |
| The Bank says says: | The Bank says says: |
| Lenders reported that demand for secured lending for house purchase decreased significantly in Q4, and was expected to decrease further in Q1. However, demand for secured lending for remortgaging increased slightly in Q4, but demand was expected to decrease slightly in Q1. | Lenders reported that demand for secured lending for house purchase decreased significantly in Q4, and was expected to decrease further in Q1. However, demand for secured lending for remortgaging increased slightly in Q4, but demand was expected to decrease slightly in Q1. |
| Overall demand for unsecured lending increased significantly again in Q4; this was solely driven by a significant increase in demand for credit card lending. However, lenders expected a significant decrease in the demand for credit card lending in Q1, with demand for other unsecured lending expected to be unchanged. | Overall demand for unsecured lending increased significantly again in Q4; this was solely driven by a significant increase in demand for credit card lending. However, lenders expected a significant decrease in the demand for credit card lending in Q1, with demand for other unsecured lending expected to be unchanged. |
| Here are the key charts: | Here are the key charts: |
| Overnight, we learned that UK house prices are now falling at the fastest rate for six years - another sign that exiting the EU is affecting the economy. | Overnight, we learned that UK house prices are now falling at the fastest rate for six years - another sign that exiting the EU is affecting the economy. |
| UK house prices fall at fastest rate in six years on back of Brexit – Rics | UK house prices fall at fastest rate in six years on back of Brexit – Rics |
| The UK energy’s strategy has been plunged into a “full-blown crisis”, as Hitachi suspends plans to build a nuclear power station in Wales. | The UK energy’s strategy has been plunged into a “full-blown crisis”, as Hitachi suspends plans to build a nuclear power station in Wales. |
| Hitachi scraps £16bn nuclear power station in Wales | Hitachi scraps £16bn nuclear power station in Wales |
| China’s Ministry of Finance has hit out at US authorites for launching a criminal probe into Huawei. | China’s Ministry of Finance has hit out at US authorites for launching a criminal probe into Huawei. |
| MOFa spokesperson Hua Chunying has told reporters that China is concerned by the “unusual handling” of the case by US prosecutors, suggesting it was driven by political considerations. | MOFa spokesperson Hua Chunying has told reporters that China is concerned by the “unusual handling” of the case by US prosecutors, suggesting it was driven by political considerations. |
| Hua added that if civil cases are used “arbitrarily to suppress Chinese enterprises then this is not only a violation of free and fair business competition but a violation rule of law.” | Hua added that if civil cases are used “arbitrarily to suppress Chinese enterprises then this is not only a violation of free and fair business competition but a violation rule of law.” |
| China’s media are also critical of the move, giving another insight into Beijing’s thinking. | China’s media are also critical of the move, giving another insight into Beijing’s thinking. |
| Global Times wrote in an editorial today in response to the WSJ story and the proposal from US lawmakers to ban chip sales to Huawei that the ‘persecution of Huawei’ is a form of ‘technological McCarthyism”. | Global Times wrote in an editorial today in response to the WSJ story and the proposal from US lawmakers to ban chip sales to Huawei that the ‘persecution of Huawei’ is a form of ‘technological McCarthyism”. |
| It says: | It says: |
| “America’s treatment of Huawei is full of geopolitical daggers… The US is angry because of China’s progress. If China wants to keep developing, China needs to bear these kinds of setbacks.” | “America’s treatment of Huawei is full of geopolitical daggers… The US is angry because of China’s progress. If China wants to keep developing, China needs to bear these kinds of setbacks.” |
| “The US has prevented these companies from remaining separate from politics. The US has branded Huawei and ZTE as political, and this is a technological Mccarthyism.” | “The US has prevented these companies from remaining separate from politics. The US has branded Huawei and ZTE as political, and this is a technological Mccarthyism.” |
| Trade war concerns are weighing on the markets today. | Trade war concerns are weighing on the markets today. |
| China’s Shanghai composite index has dropped by 0.5%, following the news that Huawei is being probed by US authorities. | China’s Shanghai composite index has dropped by 0.5%, following the news that Huawei is being probed by US authorities. |
| European markets have also opened lower, with the FTSE 100 losing 0.35% (or 24 points to 6,838). | European markets have also opened lower, with the FTSE 100 losing 0.35% (or 24 points to 6,838). |
| Jasper Lawler of London Capital Group says: | Jasper Lawler of London Capital Group says: |
| The negative start follows reports that US Federal Prosecutors are investigating Huawei Technology for allegedly stealing trade secrets. | The negative start follows reports that US Federal Prosecutors are investigating Huawei Technology for allegedly stealing trade secrets. |
| The move comes as US - Sino relations were improving amid a 90-day truce. It goes right to the heart of the unresolved IP issues with China. China are unlikely to shrug this off which is creating a risk off environment. Signs of retaliation from China could see stocks sink further. | The move comes as US - Sino relations were improving amid a 90-day truce. It goes right to the heart of the unresolved IP issues with China. China are unlikely to shrug this off which is creating a risk off environment. Signs of retaliation from China could see stocks sink further. |
| Chinese technology giant Huawei is at the heart of the dispute between Washington and Beijing. | Chinese technology giant Huawei is at the heart of the dispute between Washington and Beijing. |
| Overnight, the Wall Street Journal reported that US authorities are in the “advanced” stages of a criminal probe into the company. | Overnight, the Wall Street Journal reported that US authorities are in the “advanced” stages of a criminal probe into the company. |
| Citing anonymous sources, the WSJ said the Department of Justice is examining allegations that Huawei stole trade secrets from US business partners, including a T-Mobile robotic device used to test smartphones. | Citing anonymous sources, the WSJ said the Department of Justice is examining allegations that Huawei stole trade secrets from US business partners, including a T-Mobile robotic device used to test smartphones. |
| AFP says: | AFP says: |
| Huawei and the Department of Justice declined to comment on the media report. | Huawei and the Department of Justice declined to comment on the media report. |
| However, Huawei noted that “Huawei and T-Mobile settled their disputes in 2017 following a US jury verdict finding neither damage, unjust enrichment nor willful and malicious conduct by Huawei in T-Mobile’s trade secret claim.” | However, Huawei noted that “Huawei and T-Mobile settled their disputes in 2017 following a US jury verdict finding neither damage, unjust enrichment nor willful and malicious conduct by Huawei in T-Mobile’s trade secret claim.” |
| Earlier this week, Huawei’s founder gave a rare interview in which he denied that his company spies for China, and also praised president Trump. Ren Zhengfei’s daughter Meng is fighting attempts to extradite her to the US to face charges of breaching US sanctions. | Earlier this week, Huawei’s founder gave a rare interview in which he denied that his company spies for China, and also praised president Trump. Ren Zhengfei’s daughter Meng is fighting attempts to extradite her to the US to face charges of breaching US sanctions. |
| Newsflash: One of China’s top political leaders will head to Washington later this month to continue trade talks. | Newsflash: One of China’s top political leaders will head to Washington later this month to continue trade talks. |
| Chinese Vice Premier Liu He will visit the United States on January 30 and 31 for the next round of trade negotiations with Washington, China’s commerce ministry says. | Chinese Vice Premier Liu He will visit the United States on January 30 and 31 for the next round of trade negotiations with Washington, China’s commerce ministry says. |
| BREAKING: China announces its economy czar, Vice Premier Liu He, will visit Washington on Jan. 30-31 for trade talks. | BREAKING: China announces its economy czar, Vice Premier Liu He, will visit Washington on Jan. 30-31 for trade talks. |
| Aso’s comments came as one of Japan’s many tech companies revealed it had been hurt by the US-China trade dispute. | Aso’s comments came as one of Japan’s many tech companies revealed it had been hurt by the US-China trade dispute. |
| Nidec, a Japanese precision motor maker, slashed its profit forecast by a quarter and warned that the trade war is deterring clients from spending. | Nidec, a Japanese precision motor maker, slashed its profit forecast by a quarter and warned that the trade war is deterring clients from spending. |
| Nidec warned (via Reuters): | Nidec warned (via Reuters): |
| “The company is seeing an adverse ripple effect of the current U.S.-China trade friction on its operations in many countries, particularly in China,” | “The company is seeing an adverse ripple effect of the current U.S.-China trade friction on its operations in many countries, particularly in China,” |
| 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. |
| With trade war fears bubbling, Japan is challenging the world’s top economies to push back against the rising tide of protectionism. | With trade war fears bubbling, Japan is challenging the world’s top economies to push back against the rising tide of protectionism. |
| Japanese finance minister Taro Aso has warned fellow G20 ministers that the global recovery is losing momentum. We risk falling back into a closed and fragmented world unless advanced economies stick to “international co-operation and openness”, he warns. | Japanese finance minister Taro Aso has warned fellow G20 ministers that the global recovery is losing momentum. We risk falling back into a closed and fragmented world unless advanced economies stick to “international co-operation and openness”, he warns. |
| Speaking at a meeting in Tokyo, Aso also warned that unhappiness over inequality is rising, and that “unfair trade practices” also create harm. | Speaking at a meeting in Tokyo, Aso also warned that unhappiness over inequality is rising, and that “unfair trade practices” also create harm. |
| Opening the gathering of deputy finance ministers, he said: | Opening the gathering of deputy finance ministers, he said: |
| “Dissatisfaction with economic inequality is growing. There is a serious risk that we will revert to a closed and fragmented world. | “Dissatisfaction with economic inequality is growing. There is a serious risk that we will revert to a closed and fragmented world. |
| “Protectionism and unfair trade practices lead to instability and perverse economic outcomes. We must renew our commitment to international cooperation and openness.” | “Protectionism and unfair trade practices lead to instability and perverse economic outcomes. We must renew our commitment to international cooperation and openness.” |
| Aso’s comments come as the traditional international order wobbles in the face of the US-China trade war. Beijing and the US have just six weeks to reach agreement, before a fresh wave of tit-for-tat tariffs are imposed. | Aso’s comments come as the traditional international order wobbles in the face of the US-China trade war. Beijing and the US have just six weeks to reach agreement, before a fresh wave of tit-for-tat tariffs are imposed. |
| Japan, which has just taken up the G20 presidency, wants to focus on global trade imbalances and the impact of ageing populations | Japan, which has just taken up the G20 presidency, wants to focus on global trade imbalances and the impact of ageing populations |
| The agenda | The agenda |
| 9.30am GMT: Bank of England survey on credit conditions | 9.30am GMT: Bank of England survey on credit conditions |
| 1.30pm GMT: US weekly initial jobless data | 1.30pm GMT: US weekly initial jobless data |