The pound has dropped more than half a cent against the dollar this morning after a senior Bank of England policymaker suggested interest rates may be cut soon.
Michael Saunders said the BoE could “loosen policy” - meaning cut rates - in the event of prolonged Brexit uncertainty, even if the UK avoids a no-deal departure from the EU.
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Sterling has dropped sharply this morning after Bank of England policymaker Michael Saunders suggested that interest rates could be cut to cushion the blow of prolonged Brexit uncertainty.
Previously the Bank had hinted that it would only cut rates in the near future if the UK leaves the EU without a deal.
The pound fell to £1.228.
Michael Saunders, a member of the Bank of Engalnd's rate-setting committee said:
If the UK avoids a no-deal Brexit, monetary policy also could go either way and I think it is quite plausible that the next move in Bank Rate would be down rather than up.
One scenario is that Brexit uncertainty falls significantly and global growth recovers a bit... In this case, some further monetary tightening (limited and gradual) is likely to be needed over time.
Another scenario, and this is perhaps more likely to me, is of prolonged high Brexit uncertainty (even without a no-deal Brexit actually occurring). In this case, it might well be appropriate to maintain a highly accommodative monetary policy stance for an extended period and perhaps to loosen policy at some stage, especially if global growth remains disappointing.
WeWork is selling its $60m Gulfstream private jet
WeWork, the troubled office rental firm that bills itself as a revolutionary tech company, appears to be getting a much-needed dose of reality after abandoning its disastrous plans to sell shares to the public.
Now that controversial founder Adam Neumann has been removed as CEO, WeWork is selling off its $60m Gulfstream private jet and has halted all new lease agreements in a bid to stem massive losses.
Some people will be asking why a start-up that was burning through billions of dollars of funding from private investors was allowed to splash $60m on a plane in the first place.
Two new chief executives brought in to inject some sanity into the company are reportedly seeking to oust roughly 20 of Neumanns friends, including some senior managers.
What next for the pound?
Sterling has taken a pummeling this morning in response to comments from a Bank of England policymaker.
But...
UBS thinks the pound is likely to rise as Brexit political wranglings run their course.
The latest twist in the Brexit saga was the UK Supreme Court’s decision that the suspension of the UK Parliament, which strongly opposes a no-deal Brexit, was unlawful.Our base case remains for the UK to ask for an extension to the 31 October Brexit deadline instead of leaving the EU without a deal. GBPUSD currently trades at 1.23, well below our purchasing power parity estimate of 1.58.
I should point out this guidance was issued just before Michael Saunders' latest comments.... See blow
Small firms in 'urgent need' of Brexit support
Small businesses are in urgent need of more government support to overcome a "worrying lack of preparedness" for a no-deal Brexit, according to the Federation of Small Businesses (FSB).
Among the 39 per cent of small firms that think a no-deal will negatively impact them, only one in five have planned or prepared for anticipated issues. Nearly two thirds don’t think they are able to plan.
Businesses that have prepared have spent about £2,000, according to the FSB's survey.
That average cost rises to £3,000 for smaller businesses that export and import.
The falling pound has helped push up the FTSE 100 which is full of multinationals that generate revenues in other currencies.
The blue-chip index is up 0.8 per cent to 7,412.52 this morning.
Mining shares have done well with Evraz, Glencore and Anglo American all on the rise.
Consumer confidence up in September
Consumers are feeling a little better than they did last month, suggesting they are "keeping their fingers crossed" in the run up-to the 31 October Brexit deadline, according to a new poll.
GfK's long-running index of what shoppers are thinking moved up to (minus) -12 in September from -14 in August, meaning more people are still pessimistic than optimistic.
People are very downbeat about the economy but much more positive when it comes to their own personal financial situation, the survey reveals.
Joe Staton, client strategy director at GfK, says:
“More mixed signals this month as consumers continue to feel less than positive about the state of their personal finances and the general economy.Yes, all sub measures are higher, but they are anaemic in the case of our purchase intentions and how we view our wallets, while the results on the wider economy are still depressed.Since the Brexit referendum we have witnessed a long succession of negative Overall Index scores with the overall trend downwards. This month, British consumers appear to be treading water during this wait-and-see run-up to October 31st.Confidence is an important indicator which typically increases as the economy expands and decreases when the economy contracts and so far, consumer confidence is holding up.We certainly have a long way to go to match the record low headline score of -39 witnessed during the early days of the last recession. But will it stay that way? You can almost sense people are keeping their fingers crossed.”
16,000 Thomas Cook customers to fly home today
(Reuters) - UK’s Civil Aviation Authority said on Friday 72 flights are scheduled to operate to bring back a further 16,000 people to the country following the collapse of Thomas Cook.
The aviation regulator said it has brought back over 40% of the total number of passengers in the largest peacetime repatriation ‘Operation Matterhorn’ launched on Monday.
Crisis? What crisis?
Commenting on the latest consumer confidence numbers, Samuel Tombs chief UK economist Pantheon Macroeconomics says:
Consumer sentiment is continuing to hold well up well, despite the chaos in Westminster and the lingering risk of a no-deal Brexit.The composite index now is close to its 1974-to-present average of -9, and slightly exceeds its year-to-date average of -13.Households remain downbeat about the outlook for the overall economy, with the relevant balance still hovering at levels last seen in 2011. But households do not expect broader economic difficulties to affect them; confidence about the outlook for their personal finances is only fractionally below pre-referendum levels.
However, he cautions:
Looking ahead, the slowdown in both employment and wage growth signalled by most surveys suggests consumers’ optimism might begin to fade.In addition, we doubt that the forthcoming election will lead to a swift resolution of Brexit uncertainty; indeed, the current level of consumers' confidence points on past form to another hung parliament.
Boris Johnson's tax cuts will hand billions to higher earners
The tax cuts promised by Boris Johnson would cost billions and benefit mostly higher earners, the Institute for Fiscal Studies (IFS) has said, proposing a different way to help people on low incomes.
Oil giant's CEO under investigation over Congo dealings
Italian oil and gas group Eni said on Thursday its chief executive, Claudio Descalzi, was under investigation for a conflict of interest issue over dealings in the Congo, Reuters reports
In a statement Eni said CEO Descalzi had been served notice by prosecutors he was being probed for not disclosing certain information regarding relations between Eni’s Congo unit and a company called Petroservice. It gave no additional details.
A source close to the matter said prosecutors in the Congo probe were alleging Descalzi had not disclosed the fact that his wife, Marie Magdalena Ingoba, was behind Petroservice. Eni declined to comment.
“I firmly reject the alleged accusation. It is without any foundation,” Descalzi said in the statement.
Natwest app down: Business customers having trouble logging into Bankline
Some NatWest customers are unable to log into the desktop version of the lender's Bankline app for businesses, the bank has said.
"We’re aware that some customers may be experiencing issues logging in to Bankline. This is currently under investigation; however, we would advise that you try reconnecting at regular intervals. Apologies for any inconvenience," NatWest said on Twitter in response to complaints.
A spokesperson for the bank said the mobile Bankline app is unaffected.
The outage follows another incident with the app on Thursday, which showed some customers other firms' accounts when they logged in with their own details. The problem has been resolved.
Tobacco shares continue to slide after vaping warning
Shares in Imperial Brands which makes cigarettes including Lambert & Butler are tumbling again after health chief in the US warned people to stop vaping "immediately".
A second death in the US state of Oregon from a vaping-related illness yesterday prompted the strongest warning yet from experts.
“If you vape, whether it’s cannabis, nicotine or other products, please quit. If you haven’t started vaping, don’t start,” said Health officer Dr Dean Sidelinger.
Imperial, which has pinned its hopes for growth in developed markets on the uptake of tobacco-free products has seen billions wiped off its stock market valuation in the last couple of days. Shares are down another 3 per cent today to 1,742.40.
One in five workers have skipped meals to make ends meet in past year, survey finds
One in five workers have skipped meals over the past year in order to make ends meet, according to research by the Trades Union Congress.
When asked the same question two years ago, one in eight respondents said they had gone without food because they were short of money.
This year almost a fifth said they have gone without heating because they were unable to pay for it while a similar proportion said they had pawned or sold possessions to pay the bills.
Of 2,700 people polled, 30 per cent said they would not be able to pay an unexpected £500 bill - up from 24 per cent in 2017.
Two-fifths of respondents said their biggest concern about work was that their pay was not keeping up with living costs while one in 10 said they had been unable to pay their rent or mortgage on time.
Billionaire fashion CEO says Greta Thunberg 'demoralising for young people'
The owner of luxury fashion conglomerate Louis Vuitton Moet Hennesey (LVMH) has called Greta Thunberg "demoralising".
Speaking at a sustainability event in Paris, Bernard Arnault – the richest man in Europe and owner of multinational group LVMH which runs luxury fashion houses such as Louis Vuitton and Christian Dior – shared his opinion on the 16-year-old Swedish activist who prompted an international youth movement against climate change.
While addressing LVMH's plans to become more "green", the billionaire said: “She’s a dynamic young girl, but she’s surrendering completely to catastrophism…I find that her views are demoralising for young people.
Another tech firm has flopped on Wall Street
Peloton, a loss-making company that sells stationary bikes for £2,000, is the latest tech start-up to flop after selling its shares to the public.
It's lost 7 per cent today, extending an 11 per cent decline on its first day of trading yesterday.
Perhaps investors have realised that its big new thing - that customers can hook themselves up via a screen on their bike to online classes - is not so great after all.
The community which Peloton hopes to build is somewhat limited at present by the fact that normal people can't afford a two-grand bike with no wheels.
The pound is BACK
...to where it was this morning. Well, nearly. It's at $1.232 - a smidgen below the level it started today's session at.
Sterling is 0.2 per cent down against the euro: €1.126.
Here's what it will buy you in a host of foreign currencies:
Australia 1.73 dollars
Brazil 4.59 reals
Canada 1.56 dollars
China 7.85 yuan
Euro 1.08 euro
Hong Kong 9.17 dollars
India 76.94 rupees
Japan 126.50 yen
Mexico 21.57 pesos
New Zealand 1.82 dollars
Philippines 54.75 pesos
South Africa 17.45 rand
South Korea 1288.00 won
Switzerland 1.17 francs
Turkey 6.64 new lira
USA 1.18 dollars
