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Sterling near 2021 low as Fed hints at faster tapering; Covid wave hits German consumer confidence – business live Sterling near 2021 low as Fed hints at faster tapering; Covid wave hits German consumer confidence – business live
(32 minutes later)
Rolling coverage of the latest economic and financial newsRolling coverage of the latest economic and financial news
Shares in French spirits maker Remy Cointreau have surged to a record high after lifting its profit forecast after strong sales this year.
The maker of Remy Martin cognac and Cointreau liqueur beat forecasts with a 104.5% jump in operating profits in the first half of this year.
This is due to “excellent momentum” in China and the United States as well as a strong recovery in Europe, the firm says.
This pushed shares up 10% this morning, meaning they’ve jumped 35% so far this year.
Remy Cointreau now expects “very strong” growth in organic operating profits this year, and strong sales too.
Chief executive officer Eric Vallat said in a statement.
The UK government has begun to count the cost of Bulb Energy’s collapse as many begin to wonder whether it is a fair price to pay for policymakers’ failure to spot a looming market breakdown.
My colleague Jillian Ambrose writes.
Here’s the full story:
And here’s reaction from ITV’s Joel Hills:
And economist Shaun Richards:
The Federal Reserve rang the first big ‘inflation alarm bell’ last night, says Neil Wilson of Markets.com, with the news that some policymakers believe its stimulus package could be wrapped up faster than thought:
European markets have opened higher, with the Stoxx 600 index up around 0.4%.European markets have opened higher, with the Stoxx 600 index up around 0.4%.
European equities hit a three-week low earlier this week, as fears of fresh lockdowns rippled through markets.European equities hit a three-week low earlier this week, as fears of fresh lockdowns rippled through markets.
Michael Hewson of CMC Markets thinks it could be a subdued day:Michael Hewson of CMC Markets thinks it could be a subdued day:
In the City, the FTSE 100 index has made a quiet start to trading, up just 9 points or 0.11% at 7295 points.In the City, the FTSE 100 index has made a quiet start to trading, up just 9 points or 0.11% at 7295 points.
Copper producer Antofagasta leads the risers, up 2%, followed by industrial equipment rental company Ashtead.Copper producer Antofagasta leads the risers, up 2%, followed by industrial equipment rental company Ashtead.
But telecoms operator Vodafone (-4%) is leading the fallers, followed by tobacco firm Imperial Brands (-2.7%) and commercial property group British Land (-1.5%).But telecoms operator Vodafone (-4%) is leading the fallers, followed by tobacco firm Imperial Brands (-2.7%) and commercial property group British Land (-1.5%).
Here’s Victoria Scholar, Head of Investment at interactive investor, on today’s German economic data:Here’s Victoria Scholar, Head of Investment at interactive investor, on today’s German economic data:
Germany’s economy grew more slowly than previously thought over the last quarter, in another sign that its recovery is faltering.Germany’s economy grew more slowly than previously thought over the last quarter, in another sign that its recovery is faltering.
German GDP rose by 1.7% in July-September, updated data show, down from 1.8% previously reported -- with household spending providing the only boost to growth.German GDP rose by 1.7% in July-September, updated data show, down from 1.8% previously reported -- with household spending providing the only boost to growth.
That’s a slowdown compared with Q2, when Germany’s economy grew by 2.0%. It’s weaker than the wider eurozone, which grew by 2.2% in Q3, but faster than the UK’s 1.3% growth.That’s a slowdown compared with Q2, when Germany’s economy grew by 2.0%. It’s weaker than the wider eurozone, which grew by 2.2% in Q3, but faster than the UK’s 1.3% growth.
Statistics body Destatis reports that German household spending rose by 6.2% during the third quarter of the year. That shows consumers drove the recovery over the summer, as hospitality venues such as bars and restaurants reopened.Statistics body Destatis reports that German household spending rose by 6.2% during the third quarter of the year. That shows consumers drove the recovery over the summer, as hospitality venues such as bars and restaurants reopened.
However company investment and government spending both declined, while imports and exports both fell quarter-on-quarter, and net trade weighed on growth.However company investment and government spending both declined, while imports and exports both fell quarter-on-quarter, and net trade weighed on growth.
German consumers are also less willing to make purchases, just as they head into the festive season.German consumers are also less willing to make purchases, just as they head into the festive season.
GFK’s survey found that people’s propensity to buy has fallen to a nine-month low, with the indicator halving to 9.7 points.GFK’s survey found that people’s propensity to buy has fallen to a nine-month low, with the indicator halving to 9.7 points.
This weakness is likely to weigh on Germany’s economy this quarter, especially as yesterday’s IFO survey showed a drop in business confidence.This weakness is likely to weigh on Germany’s economy this quarter, especially as yesterday’s IFO survey showed a drop in business confidence.
Consumer confidence in Germany has been hit by the surge in coronavirus infections, and the jump in inflation hitting households this winter.Consumer confidence in Germany has been hit by the surge in coronavirus infections, and the jump in inflation hitting households this winter.
The GfK institute’s consumer sentiment index, based on a survey of around 2,000 Germans, fell to -1.6 points heading into December, down sharply from 1.0 points a month earlier.The GfK institute’s consumer sentiment index, based on a survey of around 2,000 Germans, fell to -1.6 points heading into December, down sharply from 1.0 points a month earlier.
That’s the lowest reading since June, and below expectations.That’s the lowest reading since June, and below expectations.
GfK economist Rolf Buerkl said the fourth wave in the COVID-19 pandemic, with skyrocketing infection rates and hospitals reaching capacity limits, was causing concerns that more restrictions for shops and restaurants were on the cards.GfK economist Rolf Buerkl said the fourth wave in the COVID-19 pandemic, with skyrocketing infection rates and hospitals reaching capacity limits, was causing concerns that more restrictions for shops and restaurants were on the cards.
This slide in consumer morale in Europe’s largest economy will dampen business prospects for the upcoming Christmas shopping season, Buerkl adds:This slide in consumer morale in Europe’s largest economy will dampen business prospects for the upcoming Christmas shopping season, Buerkl adds:
Some German states have already cancelled this year’s Christmas markets, due to concerns about the surge in Covid-19 cases, but others are going ahead.Some German states have already cancelled this year’s Christmas markets, due to concerns about the surge in Covid-19 cases, but others are going ahead.
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.
America’s central bank could wrap up its stimulus programme and raise interest rates earlier than expected, with inflation at a 30-year high and the jobs market improving.America’s central bank could wrap up its stimulus programme and raise interest rates earlier than expected, with inflation at a 30-year high and the jobs market improving.
The minutes of the Federal Reserve’s most recent meeting, released last night, show that some policymakers are moving towards ending its bond-buying scheme sooner, given the US’s high inflation rate which hit 6.2% last month. The minutes of the Federal Reserve’s most recent meeting, released last night, show that some policymakers are moving towards ending its bond-buying scheme sooner than thought, given the US’s high inflation rate which hit 6.2% last month.
The Fed started tapering its $120bn/month asset purchase scheme this month, cutting it by $15bn per month -- at which rate it would end by next June. The Fed started tapering its $120bn/month asset purchase scheme at this month’s meeting, cutting it by $15bn per month -- at which rate it would end by next June.
But the minutes drop a clear hint that tapering could be speeded up:But the minutes drop a clear hint that tapering could be speeded up:
Some more dovish Fed members stressed they should take a “patient attitude” toward incoming data given supply chain problems and the pandemic.Some more dovish Fed members stressed they should take a “patient attitude” toward incoming data given supply chain problems and the pandemic.
However...However...
The prospect of the Fed tightening policy faster than expected has weighed on the pound and the euro in recent weeks. Last night, sterling touched its lowest level of 2021, trading at just $1.3325 to the US dollar.The prospect of the Fed tightening policy faster than expected has weighed on the pound and the euro in recent weeks. Last night, sterling touched its lowest level of 2021, trading at just $1.3325 to the US dollar.
The euro is even weaker - at its lowest against the US dollar since July 2020, and near a 21-month low against the pound.The euro is even weaker - at its lowest against the US dollar since July 2020, and near a 21-month low against the pound.
The FOMC Minutes suggested the doves on the committee are “in retreat”, says Jeffrey Halley, senior market analyst at OANDA:The FOMC Minutes suggested the doves on the committee are “in retreat”, says Jeffrey Halley, senior market analyst at OANDA:
The news yesterday that US jobless claims have plunged to the lowest level since 1969 could also encourage the Fed to tighten policy faster.The news yesterday that US jobless claims have plunged to the lowest level since 1969 could also encourage the Fed to tighten policy faster.
Deutsche Bank expect the Fed to press down on the taper accelerator in December, by doubling the cuts to its purchases of US government debt (Treasuries) and mortgage-backed securities.Deutsche Bank expect the Fed to press down on the taper accelerator in December, by doubling the cuts to its purchases of US government debt (Treasuries) and mortgage-backed securities.
That would wrap the scheme up three months sooner than planned, as DB strategist Jim Reid explains:That would wrap the scheme up three months sooner than planned, as DB strategist Jim Reid explains:
Something for investors to ponder. Although...Wall Street is closed for Thanksgiving, while European stocks are expected to open higher despite concerns about the fourth wave of Covid-19.Something for investors to ponder. Although...Wall Street is closed for Thanksgiving, while European stocks are expected to open higher despite concerns about the fourth wave of Covid-19.
The agendaThe agenda
8.30am GMT: Swedish central bank interest rate decision8.30am GMT: Swedish central bank interest rate decision
9.30am GMT: Weekly real-time indicators of economic activity and social change in the UK9.30am GMT: Weekly real-time indicators of economic activity and social change in the UK
11am GMT: CBI distributive trades survey of UK retail sales in October11am GMT: CBI distributive trades survey of UK retail sales in October
12.30pm GMT: European Central Bank publishes its Monetary Policy Meeting Accounts12.30pm GMT: European Central Bank publishes its Monetary Policy Meeting Accounts