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UK companies endure sharpest downturn since Brexit vote – business live UK companies endure sharpest downturn since Brexit vote – business live
(32 minutes later)
Rolling news coverage of markets, economics and business as purchasing managers indices show economy in declineRolling news coverage of markets, economics and business as purchasing managers indices show economy in decline
Just after midday, the FTSE 100 has gained ground slightly. It’s now up by 1.2%, as traders take some comfort from positive rhetoric on trade from China’s Xi Jinping.
Glencore is among the biggest winners, with the commodities miner up by 3.3%. British Gas owner Centrica has also risen by 3.2%.
The mid-cap FTSE 250 has gained 0.47%, led by shares in carmaker Aston Martin which has gained 3.6%.
The FTSE 100 is the biggest riser across major European stock markets, with the German Dax up by 0.25% and France’s Cac 40 gaining 0.33%.
TSB now says the payment problems have been resolved.TSB now says the payment problems have been resolved.
Gareth Shaw, head of money at consumer association Which?, isn’t happy, however. He said:Gareth Shaw, head of money at consumer association Which?, isn’t happy, however. He said:
The window shocker aside (a better video above for your delectation), the very early verdict is that Tesla’s “cybertruck” is not likely to be a game-changer for the company.The window shocker aside (a better video above for your delectation), the very early verdict is that Tesla’s “cybertruck” is not likely to be a game-changer for the company.
Analysts at Evercore ISI led by Arndt Ellinghorst said the incumbent carmakers can rest slightly easier.Analysts at Evercore ISI led by Arndt Ellinghorst said the incumbent carmakers can rest slightly easier.
The eccentric design could mean that hitting sales of 50,000 within two years could be a serious challenge, they said.The eccentric design could mean that hitting sales of 50,000 within two years could be a serious challenge, they said.
Spare a thought today for customers of TSB: the bank is facing a fresh IT glitch after customers failed to receive wages, benefits, pensions and other payments into their accounts.Spare a thought today for customers of TSB: the bank is facing a fresh IT glitch after customers failed to receive wages, benefits, pensions and other payments into their accounts.
The latest technical issue is likely to affect thousands of customers and comes just days after the publication of a scathing report into the handling of a computer meltdown last year that left 1.9m customers locked out of their online accounts.The latest technical issue is likely to affect thousands of customers and comes just days after the publication of a scathing report into the handling of a computer meltdown last year that left 1.9m customers locked out of their online accounts.
The bank admitted on Friday that “some payments” to TSB customers had not gone in overnight but would not say how many customers have been affected, or the total value of the missed payments. TSB has 5.2m customers.The bank admitted on Friday that “some payments” to TSB customers had not gone in overnight but would not say how many customers have been affected, or the total value of the missed payments. TSB has 5.2m customers.
You can read more detail here:You can read more detail here:
Philip Hammond – remember him? – was back on the airwaves this morning, bashing the Labour party under Jeremy Corbyn, and also the harder Brexit supporters in his old party.Philip Hammond – remember him? – was back on the airwaves this morning, bashing the Labour party under Jeremy Corbyn, and also the harder Brexit supporters in his old party.
Odd as it may seem only a few months later, given how quickly his legacy has been erased, Hammond was chancellor until July this year. He was unceremoniously booted out by Boris Johnson, first from 11 Downing Street and then from the party.Odd as it may seem only a few months later, given how quickly his legacy has been erased, Hammond was chancellor until July this year. He was unceremoniously booted out by Boris Johnson, first from 11 Downing Street and then from the party.
Now he is sitting out the general election on the sidelines, but he’s still sticking to his old script, talking of a “Brexit bounce and a deal dividend” if Johnson manages to get a bill through parliament.Now he is sitting out the general election on the sidelines, but he’s still sticking to his old script, talking of a “Brexit bounce and a deal dividend” if Johnson manages to get a bill through parliament.
But he added that the worst outcome of the election would be a small majority for Boris Johnson, as it would give the right wing of his party the ability to stymie softer Brexit policies once more.But he added that the worst outcome of the election would be a small majority for Boris Johnson, as it would give the right wing of his party the ability to stymie softer Brexit policies once more.
Thomas Pugh, a UK economist at Capital Economics, said the PMI data were consistent with a fall of 0.3% in UK GDP during the final three months of the year.Thomas Pugh, a UK economist at Capital Economics, said the PMI data were consistent with a fall of 0.3% in UK GDP during the final three months of the year.
He said:He said:
A caveat on the PMI data: because the early “flash” version only covers about 85% of the companies surveyed it can be revised when the final reading comes out.A caveat on the PMI data: because the early “flash” version only covers about 85% of the companies surveyed it can be revised when the final reading comes out.
Either way, it is not a picture of strength, and the Bank of England’s monetary policymakers will surely be thinking very hard about whether to respond to weak growth.Either way, it is not a picture of strength, and the Bank of England’s monetary policymakers will surely be thinking very hard about whether to respond to weak growth.
They have been sitting on their hands since raising rates in August 2018. Since then, however, much of the pressure has been for a supportive cut as the global economy has weakened and Brexit uncertainty has dragged on.They have been sitting on their hands since raising rates in August 2018. Since then, however, much of the pressure has been for a supportive cut as the global economy has weakened and Brexit uncertainty has dragged on.
However, the prospect of a new Bank of England governor, and potentially a new prime minister or chancellor, has meant that the central bank has appeared wary of making any moves. Two of its nine rate-setting economists voted to cut at the last meeting in October.However, the prospect of a new Bank of England governor, and potentially a new prime minister or chancellor, has meant that the central bank has appeared wary of making any moves. Two of its nine rate-setting economists voted to cut at the last meeting in October.
We hear time and again that uncertainty does not help companies who want to invest and grow their businesses. There’s been a fair share of uncertainty over the last three years, and it appears the addition of an election campaign is the cherry on top.We hear time and again that uncertainty does not help companies who want to invest and grow their businesses. There’s been a fair share of uncertainty over the last three years, and it appears the addition of an election campaign is the cherry on top.
Howard Archer, chief economic advisor to the EY ITEM Club, said:Howard Archer, chief economic advisor to the EY ITEM Club, said:
The UK services PMI was 48.6, hitting the lowest level since the immediate aftermath of the Brexit vote in July 2016.The UK services PMI was 48.6, hitting the lowest level since the immediate aftermath of the Brexit vote in July 2016.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the reading was “Consistent with falling GDP, though it has been too downbeat repeatedly this year.”Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the reading was “Consistent with falling GDP, though it has been too downbeat repeatedly this year.”
*The earlier post, which incorrectly gave the services reading as 50, has been corrected – apologies for the error. Please refresh your browser to see the change.*The earlier post, which incorrectly gave the services reading as 50, has been corrected – apologies for the error. Please refresh your browser to see the change.
The worse than expected UK PMI data has woken up sterling traders (who otherwise appeared to be taking a bit of a break as they await the general election result next month).The worse than expected UK PMI data has woken up sterling traders (who otherwise appeared to be taking a bit of a break as they await the general election result next month).
The pound is now down by 0.35% against the US dollar for the day, at $1.2868.The pound is now down by 0.35% against the US dollar for the day, at $1.2868.
Note though that there have not been any major moves in the currency in recent weeks, with much hanging on the Brexit path taken by the winner on 12 December.Note though that there have not been any major moves in the currency in recent weeks, with much hanging on the Brexit path taken by the winner on 12 December.
The PMI data represents the worst run since the global financial crisis triggered a recession a decade ago, IHS Markit said – leaving big questions for the Bank of England.The PMI data represents the worst run since the global financial crisis triggered a recession a decade ago, IHS Markit said – leaving big questions for the Bank of England.
The weak survey data puts the economy on course for a 0.2% drop in GDP in the fourth quarter, according to Chris Williamson, chief business economist at IHS Markit. He said:The weak survey data puts the economy on course for a 0.2% drop in GDP in the fourth quarter, according to Chris Williamson, chief business economist at IHS Markit. He said:
The British manufacturing sector shrank more than expected in November as the services sector staved off a decline, according to an early reading of company activity.The British manufacturing sector shrank more than expected in November as the services sector staved off a decline, according to an early reading of company activity.
The flash UK manufacturing output index came in at a reading of 48.3 in November, down from the October reading of 49.7 and lower than the 49 expected by economists.The flash UK manufacturing output index came in at a reading of 48.3 in November, down from the October reading of 49.7 and lower than the 49 expected by economists.
The services sector, which accounts for about four-fifths of the British economy, showed a reading of 48.5, below the 50 mark showing when decline turns to expansion.The services sector, which accounts for about four-fifths of the British economy, showed a reading of 48.5, below the 50 mark showing when decline turns to expansion.
*This post has been corrected. An earlier version said the services PMI reading was 50.*This post has been corrected. An earlier version said the services PMI reading was 50.