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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden (until 1.30) and Nick Fletcher

Belgium fails to back Canada trade deal; Tata chairman Mistry departs – as it happened

The skyline of La Defense business district in Paris, France.
The skyline of La Defense business district in Paris, France. Photograph: Charles Platiau/Reuters

Oil prices slide

Crude prices are under pressure again after Iraq said it wanted to be exempt from any agreement by Opec to cut production.

Markets had been hoping a meeting next month by producers would agree an output deal to support the sliding oil price. Opec announced plans last month to cut output, but details of how it would reach this target and how much individual producer countries would cut were expected at a meeting in Vienna in November.

But comments from Iraq over the weekend added to the general uncertainty as to whether any agreement could be reached after all.

Brent crude is currently down just over 2% at $50.71 a barrel, while West Texas Intermediate is the same amount lower at $49.78.

On that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back tomorrow.

Donald Tusk, president of the European Council, does not seem to have given up yet on an EU-Canada trade deal:

Here’s our report on the latest developments in the EU-Canada trade deal. Jennifer Rankin writes:

The European Union’s hopes of signing a free-trade agreement with Canada this week appear to have gone up in smoke, after Belgium announced it could not sign the treaty because of opposition from regional parliaments.

The collapse of the talks highlights the pitfalls that may await the British government when it seeks to negotiate a trade deal with the EU after Brexit.

The Belgian prime minister, Charles Michel, announced on Monday that Belgium was not ready to sign the EU-Canada trade pact, following emergency talks between the country’s federal and regional leaders.

The Belgian stalemate means Canada’s prime minister, Justin Trudeau, is expected to postpone a trip to Brussels this Thursday, when he was due to sign the treaty. Officials are assessing how the trade pact can be revived, but next steps remained unclear.

Donald Tusk, the head of the European council, is due to speak to Trudeau later on Monday.

Tusk had given Belgium an ultimatum of Monday night to sort out its problems, but emergency talks in Brussels in the afternoon showed the treaty remained stuck.

Paul Magnette, Wallonia’s minister-president, who has led opposition to the deal, said his position had not changed. He had failed to show up for crisis talks with the European commission on Sunday, according to Michel.

The full report is here:

Markets rise in Europe and US, but FTSE falters

A spate of takeover deals, notably AT&T’s £70bn offer for Time Warner, and better than expected eurozone and US manufacturing PMIs have lifted most markets at the start of the trading week. But, partly due to mixed UK factory orders, the FTSE 100 has failed to hold on to early gains, and ended below the 7000 level. Chris Beauchamp, chief market analyst at IG, said:

The FTSE’s early gains have turned to ashes, with the index falling into the red over the course of the afternoon. Both the US and Europe have trimmed their gains, but the fall for London’s chief index is the standout feature of the day. Now that the pound has stopped its freefall (for now at least), perhaps the index as a whole is beginning to look a tad overpriced. Certainly, it has shown little inclination to get back to its recent highs, with ongoing Brexit uncertainty making the UK less attractive versus a eurozone economy that appears, on the basis of today’s PMI numbers, to be looking much more attractive.

The final scores showed:

  • The FTSE 100 finished down 34.07 points or 0.49% at 6986.40
  • Germany’s Dax rose 0.47% to 10,761.17
  • France’s Cac climbed 0.36% to 4552.58
  • Italy’s FTSE MIB was up 0.81% to 17,305.77
  • Spain’s Ibex ended 1.27% better at 9216.2
  • In Greece, the Athens market dipped 0.15% to 593.13

On Wall Street the Dow Jones Industrial Average is currently up 76 points or 0.42%.

Meanwhile the pound is down 0.25% at $1.22 and a similar amount lower against the euro at €1.1206.

UK prime minister Theresa May has said she is disappointed with developments in the EU-Canada trade deal.

Speaking in parliament she said: “I share everyone’s disappointment in the stalled talks between the EU and Canada.”

But she said the problems would not have a bearing on the UK’s own negotiations about leaving the European Union, saying the UK was not seeking to replicate an existing model but build its own.

More on the prime minister in parliament in the politics live blog:

US and European markets climb but FTSE fades

Most stock markets continue to move higher, with the FTSE 100 the notable exception.

Helped by M&A deals and better than expected manufacturing data for October, the Dow Jones Industrial Average is up around 0.47% while in Europe Germany’s Dax is 0.8% higher and France’s Cac has climbed 0.65%.

But after an early increase the FTSE 100 has fallen by 0.37% and is now back below the 7000 level in the wake of mixed data from the CBI. Connor Campbell, financial analyst at Spreadex, said:

The markets [are] continuing to be propelled by the day’s better than expected PMI readings.

The US was the latest to chip in with a decent manufacturing release this Monday, the flash figure coming in at an 11 month high of 53.2 against the 51.6 forecast. This ended up helping out both the dollar and the Dow Jones; the former took 0.1% off the pound, while the latter jumped nearly 100 points after the bell to approach 18250.

Over in the Eurozone the DAX and CAC held onto their morning growth, the German and French indices rising 0.9% and 0.8% respectively. The FTSE, meanwhile, remained the Western anomaly, slipping by 0.2% as investors continued to react to this morning’s troublesome CBI industrial order expectations slide.

More from Reuters on Belgium’s failure to agree the EU-Canada trade deal:

“We cannot give a yes,” Paul Magnette, the premier of the Wallonia region, told reporters as he emerged. He said the main problems remained not with Ottawa, which has already agreed to modifications in the deal, but with the EU authorities.

Other Socialist-led regions, including bilingual capital Brussels, are ranged behind the Walloons, while Dutch- and German-speakers back Michel’s liberal-led federal coalition:

“We have a Yes from the federal, Flemish and German-speaking communities and it’s a No from the others,” said Flanders premier Geert Bourgeois after the meeting at Michel’s residence lasting less than an hour.

“It’s a real shame,” the center-right leader said. “We’re the laughing stock of the whole world. It’s bad for Wallonia, for Flanders, for Belgium, for Europe, for the whole world.”

Michel said it was too early to say Ceta was dead and that the Walloons and he were still open to dialogue but that he must inform Tusk that Belgium was not in a position to consent now to a deal that all 27 other EU member states are ready to support...

Ceta supporters say it would increase trade between the partners by 20 percent and boost the EU economy by 12 billion euros ($13 billion) a year and Canada’s by C$12 billion (US $9 billion).

Walloons have concerns about the threat of surging pork and beef imports from Canada and an independent court system to settle disputes between states and foreign investors, which critics say allows multinationals to dictate public policy.

Many EU leaders suspect the local government in Namur is using its devolved powers to play domestic politics.

Dutch language Flemish newspaper De Morgen said on Monday that the Magnette’s stance was both a matter of principle and opportunism, a chance to boost his reputation and to become leader of the center-left in Belgium.

Strong domestic demand is one key factor behind the better than expected US PMI figures, according to IHS Markit chief business economist Chris Williamson. He said:

Manufacturing showed further signs of pulling out of the malaise seen earlier in the year, starting the fourth quarter on a solid footing. Both output and new orders are rising at the fastest rates for a year amid increasingly widespread optimism that demand will pick up again after the presidential election, which has been commonly cited as a key factor that has subdued spending and investment in recent months.

There are also signs that the drag from cost-cutting policies of deliberate inventory reduction is moving into reverse. Inventory-building should therefore provide an extra boost to the economy in the fourth quarter.

Weak export growth, attributable to the strong dollar, and lacklustre hiring remain big areas of disappointment, and highlight an ongoing dependency on domestic demand and a need to keep labour costs low amid a still-uncertain economic and political outlook.

US manufacturing better than expected

More signs of strength in the US economy.

The Market US manfacturing PMI for October has come in at 53.2, well above the 51.5 expected by analysts. It compares to final figure for September of 51.5. This is the highest manufacturing PMI figure since October 2015.

The better than expected figure adds to the idea that the Federal Reserve will raise interest rates before the end of the year, pushing the dollar higher and US Treasury bond prices lower.

Wall Street opens higher

Merger Monday has given US stock markets an early lift, ahead of a spate of major results later in the week, including from Apple and Boeing.

AT&T’s £70bn offer for Time Warner is not the only deal on the table. Broker TD Ameritrade plans to pay $4bn for Scottrade Financial Services, while aircraft component maker Rockwell Collins is offering $6.4bn for B/E Aerospace.

So the Dow Jones Industrial Average is currently up 114 points or 0.6% while the S&P 500 opened 0.45% higher and the Nasdaq Composite climbed 0.64%.

Bullard also said:

The St. Louis Fed’s conclusion is that a single 25-basis-point increase in the policy rate–from 38 to 63 basis points–will get us very close to the Taylor rule value over the forecast horizon.

[The Taylor rule provides a recommended setting for the FOMC’s policy rate based on current values of observable macroeconomic variables, according to Bullard]

Path of US interest rates
Path of US interest rates Photograph: St Louis Fed

Ahead of the latest US manufacturing data for October, a Federal Reserve member has repeated his belief that one further interest rate rise is all that is necessary for the moment.

St Louis Federal Reserve president James Bullard told a conference in Arkansas:

The current policy rate setting is just 38 basis points, extraordinarily low by postwar historical standards. The Federal Open Markets Committee is considering raising the policy rate to a somewhat higher level, [but] the St. Louis Fed’s rate path projection is much flatter than the rest of the Committee.

The bottom line: Low interest rates are likely to continue to be the norm over the next two to three years.

Belgium says it cannot sign Canada trade deal - PM

Hopes that Belgium would back a European Union trade deal with Canada appear to have been dashed, putting the agreement in jeopardy.

Belgian prime minister Charles Michel said he had told EC president Donald Tusk today that the country could not sign the deal because he had failed to get agreement from regional authorities, notably Wallonia.

The EU had given Belgium’s federal government until late on Monday to secure backing for a deal, or a summit to sign the Ceta agreement planned for Thursday would be cancelled.

But according to Reuters, Michel said to reporters after meeting regional leaders:

I have officially told Tusk that we have no agreement.

He said he was still open to further talks with Wallonia and said it was too early to say whether Ceta, which has been in negotiations for several years, was dead.

But Tusk is now expected to contact Canadian Prime Minister Justin Trudeau and call off Thursday’s planned summit.

Belgian Prime Minister Charles Michel
Belgian Prime Minister Charles Michel Photograph: Olivier Matthys/AP

The omens had not looked good ahead of the meeting between Michel and the leaders of five regional authorities , with Wallonia’s premier Paul Magnette criticising the deadline placed on the deal. He said (quote from Reuters):

Every time you try to put an ultimatum it makes a calm debate and a democratic debate impossible..

We don’t need an ultimatum. We will not decide anything under an ultimatum or under pressure.

Magnette says the deal is bad for Europe’s farmers and gives too much power to global corporate interests.

Updated

Brexit Watch: UK hit by falling pound and rising inflation

The latest Guardian Brexit dashboard has just been released, and it shows that Britain’s economy is starting to lose momentum as the impact of June’s referendum is felt.

The dashboard is a comprehensive assessment of conditions in the UK economy, and it highlights that living standards are being squeezed as the slump in sterling hits people in the pocket.

My colleague Angela Monaghan explains:

The dashboard for October shows that four of the eight categories have performed worse than expected, two were as expected, and two were better.

Inflation jumped more sharply than expected to 1%, the highest level in almost two years, Britain’s trade deficit with the rest of the world widened, as growth in imports rose faster than exports, and retail sales were flat as shoppers were put off by higher clothing prices and exceptionally warm September.

Here’s the story:

Economist Danny Blanchflower fears that Britain is facing an “oncoming Brexit tsunami”, while PwC’s Andrew Sentance is more positive. Here are their takes:

And you can see the full dashboard here:

Here’s a recent-ish photo of Cyrus Mistry:

Cyrus Mistry, arriving at the Tata group’s Bombay House headquarters in the Indian city of Mumbai on April 6, 2016.
Cyrus Mistry, arriving at the Tata group’s Bombay House headquarters in the Indian city of Mumbai on April 6, 2016. Photograph: Punit Paranjpe/AFP/Getty Images

Updated

Mistry leaves Tata: instant reaction:

Cyrus Mistry’s shock exit from Tata today is causing a real stir.

My colleague Graham Ruddick says it has implications for steelworkers in South Wales, whose future has been in doubt since Tata announced plans to sell, or shut, it.

The Economist’s Stanley Pignal reckons Mistry paid the price for Tata’s recent struggles.

Tata parts company with chairman Mistry

Now this is interesting... Tata, the Indian manufacturing giant, has just announced the departure of its chairman, Cyrus Mistry.

Ratan Tata, who ran the company for two decades, is stepping in while a permanent successor is found.

In a brief statement, Tata says:

Tata Sons today announced that its Board has replaced Mr. Cyrus P. Mistry as Chairman of Tata Sons. The decision was taken at a Board meeting held here today.

The Board has named Mr. Ratan N. Tata as Interim Chairman of Tata Sons. The Board has constituted a Selection Committee to choose a new Chairman. The Committee comprises Mr. Ratan N. Tata, Mr. Venu Srinivasan, Mr. Amit Chandra, Mr. Ronen Sen and Lord Kumar Bhattacharyya, as per the criteria in the Articles of Association of Tata Sons. The committee has been mandated to complete the selection process in four months.

It’s not immediately clear why Mistry is off, but Tata’s somewhat-sprawling operations have been struggling to keep pace with rivals. The group is involved in steel, automobiles, consultancy, power, and mobile telecoms....

Updated

AT&T and Time Warner defend deal

Bang on cue, AT&T and Time Warner are defending their merger (which they claim is a “perfect match”)

Updated

The US stock market is expected to follow Europe’s lead, and open higher today.

The benchmark S&P 500 index is tipped to jump by 0.5% when trading begins (at 2.30pm BST).

AT&T’s plan to acquire Time Warner for $85bn has given Wall Street a dose of merger fever, even though the deal has been criticised by Republican presidential candidate Donald Trump, and Democratic vice-presidential pick Tim Kaine:

Some reaction to Microsoft’s Brexit price hike:

Microsoft hikes prices due to weak pound

Brexit may mean Brexit, but it also means businesses paying a lot more for using Microsoft’s products.

The tech giant is hiking the cost of its enterprise software, by up to 22%, in response to the slump in the pound since June’s referendum. It starts in January.

As my colleague Alex Hern points out, other technology products and services have also spiked in cost recently:

Updated

UK industrial orders fall, as weak pound drives up costs.

Newsflash: UK factories have suffered a fall in industrial orders this month.

The CBI’s monthly survey of manufacturers shows that the balance of orders fell to -17 this month, down from -6 in September. That suggests that factories are finding things a bit tougher this month.

But... they’re also more upbeat about future prospects. The CBI’s business optimism index has risen to -8, from a positively gloomy -47 in September.

And the balance of firms reporting higher exports rose to +8 over the last three months.

Perhaps the most interesting line is that the weak pound isn’t being cheered too loudly.

Almost half the exporters surveyed said the fall in sterling was bad for their business (even though it should make their products more attractive in foreign markets).

Today’s report shows that the prices paid by UK factories for their materials jumped at the fastest rate in three years, and are expected to continue growing at above their long-term average over the quarter ahead.

Rain Newton-Smith, CBI chief economist, says:

“Manufacturers’ are optimistic about export prospects and export orders are growing, following the fall in Sterling.

“However, the weaker Pound is also feeding through to costs, which are rising briskly and may well spill over into higher consumer prices in the months ahead.

Updated

Back in the City, shares in UK defence firm Cobham have slumped by 17% this morning after it hit investors with its second profit warning in six months.

Cobham is languishing at the bottom of the FSTE 250 leaderboard, after it warned that revenues and profits continue to miss expectations. More here:

Eurozone investors are also cheered by political developments in Spain, where right-wing leader Mariano Rajoy has the green light to form another administration.

After 10 months of deadlock, Spain’s socialist party has decided not to oppose a confidence vote, meaning Rajoy should be clear to form a minority government.

The move is unpopular with some left-wing politicians, who feel they shouldn’t prop up Rajoy’s PP party (which is facing a flurry of corruption charges).

But the prospect of a stable government in Madrid, after two inconclusive elections, is encouraging traders to buy Spanish debt. This is driving down Spain’s bond yields, meaning it can borrow at cheaper rates:

The euro is struggling back from its lowest level in seven months.

The single currency is hovering around $1.089, having earlier fallen as low as $1.086 - its weakest point since the EU referendum.

Euro vs the US dollar
Euro vs the US dollar Photograph: Thomson Reuters

The pound is little changed this morning, at $1.224 against the dollar.

Caxton FX analyst Alexandra Russell-Oliver explains:

Expectations that the Fed will move on interest rates by the end of the year, likely in December, have contributed to dollar strength. The euro remains relatively under pressure in light of ongoing stimulus from the European Central Bank.

The pound continues to be driven by ongoing Brexit uncertainty ahead of the triggering of Article 50 by next March, particularly concerns that the UK will pursue a “hard” Brexit.

Today’s PMI report also shows that eurozone firms are hiking prices this month, for the first time in over a year.

Markit says:

With demand firming, companies were increasingly able to charge higher rates to customers. Average prices charged for goods and services rose for the first time since August 2015.

Higher prices were often a reflection of the need to pass rising costs on to customers. Average input costs increased at the steepest rate for 15 months, linked mainly to higher commodity prices, notably oil-related, as well as rising wage costs.

October’s ‘flash’ PMIs suggest the eurozone is growing at a quarterly rate of around 0.4%, says Markit.

That would beat the 0.3% recorded between April and June, but is still rather unspectacular.

Dutch financial blogger Jeroen Blokland believes that today’s PMI survey shows the European Central Bank should start reining in its stimulus programme:

The ECB’s QE programme is due to run out next March. Last week, president Mario Draghi hinted that it could be extended, perhaps in December.

Here’s economist Marcus Wright on today’s PMI report:

JP Morgan: the eurozone is accelerating

Here’s Julien Lafargue, European equities strategist at JP Morgan, on today’s healthcheck on the eurozone economy:

According to the flash PMIs estimates, after a difficult summer, the Eurozone is accelerating again at the start of the 4th quarter.

The improvement in Services in Germany is particularly encouraging as this had been an area of concerns recently. The focus is now likely to switch to inflation dynamics with input costs in Germany rising at the fastest pace in nearly 1.5 years and backlogs of work in the Eurozone accumulating at the fastest rate for over 5 years.

Although we believe this would be premature, this might trigger renewed concerns about the ECB having to “taper” its quantitative easing in the coming months.

[Tapering = cutting the size of the European Central Bank’s stimulus programme, which is currently buying €80bn of new bonds each month]

Updated

Eurozone PMI hits 10-month high

Boom! Eurozone companies are growing at their fastest rate this year, as they put the shock of Britain’s Brexit vote behind them.

Firms are benefitting from a surge in new orders, encouraging them to take on more staff to deal with a growing backlog of work.

That’s the message from Markit’s monthly healthcheck on the eurozone economy, just released.

Markit’s flash composite Purchasing Managers’ Index, which measures activity in the sector, has jumped to 53.7 from September’s 52.6. That’s the highest reading since December 2015, and much stronger than expected.

Here are the details:

.
oct24euro1 Photograph: Markit
.

As we covered earlier, Germany’s PMI hit a three month high this week, while France’s factories have made a welcome (and long-awaited) return to growth.

The eurozone’s manufacturing and service sectors both posted a rise in new output, at the highest rate since the start of this year.

Chris Williamson, chief business economist at IHS Markit, says the future looks quite bright:

“The eurozone economy showed renewed signs of life at the start of the fourth quarter, enjoying its strongest expansion so far this year with the promise of more to come. With backlogs of work accumulating at the fastest rate for over five years, business activity growth and hiring look set to accelerate further as we head towards the end of the year.

“October’s PMI is consistent with a quarterly GDP growth rate of 0.4%, led by a 0.5% pace of expansion in Germany. Modest growth of 0.2-0.3% is being signalled for France, but there are various indicators which suggest that France will enjoy stronger growth in coming months, including a marked build-up of uncompleted work.

More to follow....

Some early reaction:

This is from Fred Ducrozet of Swiss bank Pictet:

And here’s Bloomberg’s Maxime Sbaihi:

European stock markets are rallying in early trading, led by France after its factory sector returned to growth.

The French CAC has gained 0.65%, while in London the FTSE 100 is up 44 points, or 0.6%, at 7064.

Europe’s main stock markets this morning
Europe’s main stock markets this morning Photograph: Thomson Reuters

Conner Campbell of SpreadEx says:

Finally crawling out of contraction territory the French manufacturing PMI hit a 10 month high of 51.3 this morning; the services sector wasn’t so strong, however, slipping from 53.3 (revised down from 54.1) to 52.1 month-on-month.

Germany, meanwhile, beat estimates on both counts; its manufacturing PMI came in at a 32 month peak of 55.1, with the services reading at a 3 month high of 54.1. This allowed the DAX and CAC to post some decent gains this Monday, rising 0.7% and 0.8% respectively.

Updated

German private sector growth hits three-month high

German companies have also beaten expectations, reporting their strongest growth in three months.

Markit’s Flash Germany Composite Output Index has jumped to 55.1 in October, up from September’s 16-month low of 52.8. Factories reported their biggest leap in activity in almost three years, while service sector firms also picked up.

That suggests Germany’s private sector has put its recent slowdown behind it.

Gemran

Firms also reported that new orders grew at their fastest rate this year

Oliver Kolodseike, Economist at IHS Markit said:

“The German economy has entered the fast lane again at the start of the fourth quarter, with output growth accelerating from September’s recent low.

The improvement in the PMI in October lifts hopes that the weaker expansions we have seen in the past two months were just a temporary soft patch, rather than the beginning of a serious slowdown.

Encouragingly, French business expectations have strengthened this month, with more bosses planning to spend more on advertising and new projects:

Markit says:

Some panellists were buoyed by the latest increases in demand, while planned rises in investment and marketing were expected to boost overall activity.

Less encouragingly, French firms are still cutting staff:

On the employment front, staffing levels were marginally lower for the fifth time in 2016 so far. Both manufacturing and services sectors recorded slight drops in employment, although the fall in manufacturing was the lowest recorded in eight months of job shedding.

Here’s Markit’s snap summary of the French PMIs:

French factories return to growth

France’s manufacturing sector has given the markets an early-morning lift, by reporting that they’ve posted their strongest growth this year.

Factory output has hit its fastest rate since March 2014 this month, raising hopes that the eurozone’s second-largest economy is picking up.

This pushed the ‘flash’ French manufacturing PMI, produced by Markit, up to 51.5 in October, from 49.7 in September. That’s a 10-month high, ending a long run of contraction.

Any reading over 50 shows growth, so this indicates that French factories are enjoyinga decent enough autumn.

However.... service sector growth slowed to a three-month low; meaning the ‘composite PMI’ actually dipped a little, to 52.2 from 52.7.

French composite PMI
French composite PMI Photograph: Markit

Paul Smith, senior economist at IHS Markit, says the data is encouraging:

“Although growth slipped slightly in October, the latest data revealed a number of positives for the French economy, especially on the manufacturing side with rising exports supporting a marked uplift in output.

With signs of intensifying capacity pressures and service providers indicating expectations for near-term growth, the outlook for the rest of 2016 looks reasonably positive.”

Next up, German PMI.....

Updated

Portuguese bonds rally after DBRS maintains credit rating

There’s relief in the eurozone today, after Portugal successfully held onto its investment-grade credit rating on Friday night.

There had been fears that rating agency DBRS would slash Portugal’s credit rating in to junk territory, which would have had serious consequences for.

But instead, DBRS maintained Lisbon’s BBB rating with a “stable” outlook, despite earlier expressing concerns over low growth and high debt.

That has sent Portugal’s bonds rallying this morning, driving down the yield on 10-year debt to a six-week low of just 3.08%.

Portuguese 10-year bond yields
Portuguese 10-year bond yields Photograph: Thomson Reuters

If Portugal had been downgraded by DBRS, it would no longer have been eligible for the European Central Bank’s quantitative easing programme. That would have driven up borrowing costs, and raised fears that the eurozone crisis was heating up again.

Portugal’s government welcomed the move, saying:

“Today’s decision increases our own and the markets’ confidence in the policies chosen for the country.”

But.... Fitch, S&P and Moody’s have already slashed Portugal into junk territory, expressing fears over its slow growth rates and high public debt. So Lisbon isn’t out of the woods yet.

The agenda: Markets await UK and US growth report

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

It’s going to be a big week for economic data. On Thursday, we learn how the UK economy performed in the last three months, immediately after the Brexit vote.

Economists expect growth to slow to 0.3% or 0.4%, from 0.7% in April. That’s a significant slowdown, but not as bad as some forecasters had predicted during the referendum campaign.

Kathleen Brooks of City Index says it would be:

...not bad considering the doom and gloom about the UK economy, some may say. However, there are a few signs that Brexit is starting to weigh on the UK economy. Business investment is expected to be weak, and we expect another quarter of growth heavily reliant on the consumer.

Going forward, we see consumer confidence flagging once Article 50 is triggered at some point early in Q1 next year.

Then on Friday, we get US GDP figures for the third quarter. Growth is expected to speed up, to around 0.6% quarter-on-quarter.

Naeem Aslam of Think Markets explains:

This is an immensely important week in terms of economic data and we may see some serious firecrackers which lightens up some bonfire. We could potentially see massive swings in the forex and equity markets as investors scrutinized the third quarter GDP number for the US economy which is due at the end of the week.

What traders want to know is that if the US economy is regaining traction.

There’s not much UK economic news today, apart from the CBI’s regular healthcheck on UK industry (published at 11am BST).

We also get a flash view of the European economy from 8am to 9am, when the latest surveys of manufacturing and services companies in France, Germany, and the wider eurozone are released.

And Bank of England deputy governor Minouche Shafik is giving a speech in Hong Kong about macroprudential policies.

Updated

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