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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Pound hits 27-month low as no-deal Brexit fears grow - as it happened

Screens of financial data.
Screens of financial data. Photograph: Daniel Sorabji/AFP/Getty Images

SUMMARY: Brexit storm sends sterling reeling

Time for a quick recap

Here’s some other news from today:

Our Politics Live blog has all the action from Westminster too:

Goodnight! GW

The pound’s losses deepened this afternoon after Sky News reported that Boris Johnson had devised a cunning plan to stop MPs blocking a no-deal Brexit.

The front-runner to become Britain’s next prime minister is, apparently, considering scheduling a new parliamentary session in early November. That would mean parliament would shut down for the last couple of weeks of October - just when the Brexit deadline approached.

Sky’s Sam Coates reports:

Boris Johnson could send MPs home for up to two weeks in October under plans being considered by his campaign.

Insiders have confirmed they are looking at scheduling a Queen’s speech to mark the start of a new parliamentary session in early November.

Parliament is usually prorogued for between one and two weeks ahead of a Queen’s speech, meaning MPs would in effect be unavailable to stop a no-deal Brexit immediately before October 31.

The slump in sterling is driving the London stock market higher tonight.

A weaker pound makes overseas earnings in foreign currencies more valuable. That means higher profits for exporters, in sterling terms anyway.

So, the FTSE 100 index is up 44 points, or 0.6%, in late trading at 7576, near to an 11-month high.

Newsflash: Christine Lagarde has submitted her resignation as head of the International Monetary Fund, effective from 12 September.

That’s not a big surprise, as Lagarde has already been chosen to head the European Central Bank. But it may speed up the process of selecting her successor.

In a statement, Lagarde says her resignation will “expedite the process” of choosing her successor.

Possible candidates, such as Bank of England governor Mark Carney and former UK chancellor George Osborne, should polish up their CVs now (quite a task for ‘Nine-jobs Osborne, I imagine).

John McDonnell: Tory leadership battle to blame

In-work povertyEmbargoed to 0001 Wednesday July 17 File photo dated 13/7/2019 of John McDonnell who is to promise that Labour will eliminate the “modern-day scourge” of in-work poverty by the end of the party’s first full term back in office. PRESS ASSOCIATION Photo. Issue date: Wednesday July 17, 2019. The shadow chancellor will pledge to make structural changes to the economy, ensure public services are free at the point of use, and provide a strong social safety net to tackle the issue if his party enters government. See PA story POLITICS McDonnell. Photo credit should read: Kirsty O’Connor/PA Wire
John McDonnell Photograph: Kirsty O’Connor/PA

John McDonnell MP, Shadow Chancellor, has blasted Boris Johnson and Jeremy Hunt for weakening the UK currency with their attacks on the Irish backstop.

McDonnell says:

“The instability and uncertainty caused by the Conservative Party leadership contest has real world consequences.

The commitment of both contenders to a No Deal Brexit makes it even more important the Government put an end to playing games with people’s livelihoods and call a General Election now.”

Updated

Pound keeps falling

With Brexit pressure building, the pound has just tumbled through the $1.24 mark for the first time in 27 months.

Sterling has dropped as low as $1.2396 for the first time since early April 2017, as investors fret that a no-deal Brexit is more likely.

The selloff comes as EU officials continue to resist UK pressure to remove the Irish backstop from the Brexit deal.

One official has told Reuters:

“If the Brits really think we are so scared of a no-deal Brexit, they are being naive.”

Neil Wilson of Markets.com suspects that the tough talk about no-deal Brexit’s could fade as the 31st October deadline approaches - possibly giving the pound some support.

Both Conservative leadership candidates are taking the hard line on Brexit to appeal to the Tory membership.

As previously stated, we have to remember that once faced with the granite reality of Number 10, recalcitrant MPs and the EU, there may be a softening.

Capital Economics: No-deal could send pound down to $1.15

How much lower could the pound go?

Capital Economics have calculated that sterling could slump as low as $1.15 against the US dollar after a no-deal Brexit, down from $1.24 today.

That would send inflation surging higher (as imported goods would become pricier, especially if new tariffs were also imposed).

But if the UK was to leave the EU with a deal, the pound could rally back to $1.40 within a couple of years, they suggest, in a report published today.

Here’s their forecasts:

Brexit forecasts for the pound
Brexit forecasts for the pound Photograph: Capital Economics
Brexit forecasts for the pound
A no-deal Brexit would push inflation up Photograph: Capital Economics

Capital Economics also warn that economic growth would also suffer after a disruptive no-deal Brexit:

In a no deal scenario, both exports and imports would plunge as delays at the ports would prevent goods from entering and leaving the country for a few weeks. Weak domestic demand in the aftermath may mean imports take longer to recover.

As a result, the external sector might provide some support to the economy, but only enough to offset a fraction of the overall slowdown in GDP growth

UK GDP under various Brexit scenarios

Many ministers opposed to a hard Brexit expect to lose their jobs once Boris Johnson becomes prime minister.

My colleague Andy Sparrow reports that some farewell presents have already been dished out in the House of Commons:

There is a real end-of-term feeling in the Commons at the moment. John McDonnell, the shadow chancellor, gave Philip Hammond, the chancellor, what was effectively a leaving present in Treasury questions recently - a book of radical walks. Today Greg Clark, the business secretary, gave a model car to his Labour counterpart, Rebecca Long-Bailey. Clark handed over the gift after speaking about changes to the UK automotive industry and new electric vehicle projects.

Hammond and Clark are both expected to be sacked next week, largely because they are both firmly opposed to a no-deal Brexit. Boris Johnson and Jeremy Hunt, the two candidates left in the Tory leadership contest, insist no-deal must remain an option, and their comments about the backstop last night have made it even more probable.

More details in Andy’s Politics Liveblog:

Nick Macpherson was formerly the top civil servant in the UK Treasury, helping to steer Britain’s economy through the financial crisis a decade ago.

He’s alarmed that both Johnson and Hunt seem quite happy to “debauch” the pound, in their search for the support of Conservative Party members.

City brokerage BP Prime also blame Boris Johnson for today’s selloff.

Expert: Pound is vulnerable

The pound could slide further, as the next Brexit deadline (31 October) approaches, warns analyst Stephen Innes of Vanguard Markets:

Sterling has been under intense selling pressure after both candidates for UK Prime Minister’s position toughened their stances on the Withdrawal Agreement and the Irish backstop at the final debate which suggests the Pound will remain extremely vulnerable if the no-deal Brexit continues gaining momentum.

Updated

Jordan Rochester, FX strategist at Nomura, says investors aren’t convinced that Johnson will convince EU leaders to drop the backstop, if he becomes prime minister.

He says:

It will take a big charm offensive by Boris Johnson to move them. Hence why folks are saying this increases the risks of a no deal Brexit.”

Rochester also fears that the pound could become more volatile, given the political upheaval on the horizon:

“Over the next few weeks and months, the UK will have a new prime minister, chancellor, cabinet, Bank of England governor, budget and Brexit plan. Despite all the above, foreign exchange volumes are near historical lows once again. This is unlikely to last.”

Updated

Thu Lan Nguyen, a currency strategist at Commerzbank, says the chance of Britain leaving the EU with a deal are falling (just like the pound!)

The pound weakness is a reaction to the two prime minister contenders opposing the Irish backstop, which dramatically reduces the chance for a Brexit with a deal.

“So this leaves only two options, no-deal Brexit, or no Brexit. As both Johnson and Hunt have made clear they want Brexit, chances of a no-deal Brexit are rising.”

More here on Bloomberg.

Johnson and Hunt's Brexit views hurt the pound

Boris Johnson and Jeremy Hunt taking part in a Hustings debate hosted by the Sun and Talk Radio last night
Boris Johnson and Jeremy Hunt taking part in a Hustings debate hosted by the Sun and Talk Radio last night Photograph: WPA Pool/Getty Images

Johnson and Hunt’s hardline pitches on Brexit have worried the City, says Vasileios Gkionakis, global head of forex strategy at Lombard Odier, the Swiss banking group.

Gkionakis says the Conservative leadership race has “has transformed into an arms race of who is a bigger Brexiter,” Reuters reports.

Gkionakis adds:

“The market is pricing in a higher probability of a no-deal Brexit and an increase of economic pressure.”

You have the perfect storm for sterling,.

Updated

The People’s Vote campaign, who are calling for a second EU referendum, say holidaymakers will suffer from Johnson and Hunt’s hardline views on the Backstop.

They point out that the pound has weakened during the Conservative leadership campaign, in which most candidates took a hard line on Brexit.

Here’s the data:

  • Euro: in April one pound on the exchanges bought €1.16, today it buys just €1.107
  • US Dollar: in April one pound bought $1.31, today it buys $1.242
  • Aus Dollar: in April one pound bought AUS$1.82, today it buys AUS$1.77
  • Thai Baht: in April one pound bought ฿41.60, today it buys ฿38.48

Wes Streeting MP, leading supporter of the People’s Vote campaign, points out that a weaker pound hurts tourists heading abroad, as well as making imports more expensive.

“Boris Johnson and Jeremy Hunt want to impose a hard Brexit, or even a destructive No Deal on us, without giving us the final say. That won’t just threaten jobs in the car industry, steel or financial services, it will hit ordinary families hard by trashing the value of the pound and sending the price of everything from petrol at the pumps to two weeks at Disneyland soaring.

Streeting argues that the economic costs of a hard Brexit justify a second vote:

“It is not democratic, not fair and not legitimate for this decision to be only in the hands of the 0.25% of the population who are members of the Conservative Party. With so much at stake for all of us, then the decision must be in the hands of the people with a final say referendum.

This Brexit crisis has come down to a simple question about whether we live in a democracy: no one has the right to force a destructive No Deal on the country without all of us having our voice heard in a People’s Vote.”

City traders are selling the pound in droves, after hearing Boris Johnson and Jeremy Hunt both put the boot into the Irish backstop in their debate last night.

The backstop is a key part of Theresa May’s Withdrawal Agreement, and would keep the UK locked in a customs union after Brexit if a free trade deal isn’t agreed.

Johnson argued last night that it can’t be fixed simply though being made ‘time-limited’:

“The problem is really fundamental. It needs to come out.”

I think the problem is very fundamental. It has been devised by this country as an instrument of our own incarceration in the single market and customs union. It needs to come out.”

Hunt concurred, saying:

The backstop, as it is, is dead.

I don’t think tweaking it with a time limit will do the trick.

But as Brussels is committed to avoiding a hard border in Ireland, they may not accept that the backstop has expired - and without a solution, getting a deal by 31 October looks less likely.

Today’s selloff is driving the pound down to the 27-year lows suffered in early 2017, in the months after the EU referendum.

The pound vs the US dollar over the last five years
The pound vs the US dollar over the last five years Photograph: Refinitiv

No-deal Brexit sends pound sliding to 27-month low

NEWSFLASH: The pound has just hit its lowest level against the US dollar in over two years, as fears of a no-deal Brexit grip the financial markets.

Sterling has fallen to just $1.2420, shedding a whole cent today, to its weakest point since April 2017 (shortly before Theresa May called her ill-fated general election).

The pound has also sunk to a fresh six-month low against the euro, at €1.107.

This is a blow to any families planning foreign holidays in Europe or America this summer.

The slump comes after the two men vying to be Britain’s prime minister, Boris Johnson and Jeremy Hunt, both declared that the Northern Ireland backstop is “dead”.

Hunt and Johnson both insisted last night that they would remove the backstop from a new Brexit deal, or leave the European Union without a deal.

But Brussels insiders insist that the backstop will not be ditched -- raising fears that Britain will crash out of the EU this autumn.

My colleague Lisa O’Carroll explains that the UK has already been told the plan is a non-starter:

Brussels had already rebuffed such a plan when the Brexit secretary, Steve Barclay, who is now part of Johnson’s campaign, met the EU’s chief Brexitnegotiator, Michel Barnier, last week.

In what was seen as “spinning for a Boris plan”, Barclay told Barnier that the backstop was dead five times during the meeting. Sources say he told Barner that they wanted a series of mini deals and alternative arrangements for the Irish border.

He was told that was Brexit fantasy and a non-starter, and that the “mini deals” outlined in EU contingency plans were temporary and only covered the “bare bones” such as aviation, mobile phone roaming and haulier driver licences. They did not include the major issues such as trade or the Irish border.

Updated

TUC general secretary Frances O’Grady is urging the government not to be complacent about the labour market:

“Wage growth is still below pre-crisis levels. Today’s figures are little consolation for workers still feeling the effects of the longest pay squeeze for 200 years.

“Working people are facing huge uncertainty. With the Bank of England expecting growth to flatline, the government must act to support the economy.

“Ministers should raise the minimum wage to £10 as quickly as possible, and increase public investment, including on public services. And unions must have the freedom to enter every workplace to negotiate fair pay rises.”

Andy Bruce of Reuters has also spotted that rising self-employment is making up for a drop in the number of employed workers.

Pay STILL below pre-crisis levels

The Resolution Foundation have produced some neat charts showing how wages are growing across the UK economy... but still not fast enough to reach their levels before the financial crisis (once you adjust for inflation).

Updated

Geraint Johnes, professor of economics at Lancaster University Management School, has spotted a significant trend -- a big jump in part-term self-employed workers.

There are now 4.96 million self-employed people, an increase of 167,000 over the last year.

Professor Johnes fears that some people are being driven into insecure and unreliable gig-economy work:

Following the pattern of recent months, the labour market statistics exhibit a shift towards less secure forms of employment. While the overall employment level continued to rise in the three months to May of this year, the composition of this increase is a source of some concern. The number of full-time employees fell by some 77000, and the number of part-time employees also fell slightly. There was a modest increase in the number of full-time self-employed workers, but the main source of employment growth has been part-time self-employment.

This grew by a massive 104,000 over the quarter. While many jobs of this kind offer workers the flexibility that they might want, this may come at a cost in terms of insecurity. As parts of the traditional engine room struggle in the current economic climate, workers may increasingly be turning to the gig economy.

Updated

The 3.6% increase in basic earnings is partly driven by NHS pay rises, under the three-year pay deal recently agreed with the government after years of austerity.

The recent increase in the National Minimum Wage is also a factor, pushing up earnings for low-paid staff in sectors such as wholesaling, retailing, hotels and restaurants.

Unemployment: What the experts say

Ed Monk, associate Director for Personal Investing at Fidelity International, is pleased to see workers getting paid more:

“The good news from today’s wage data is that pay is rising by 1.4% a year in real terms, and faster for those getting bonuses.

That means households are getting richer in real terms. For the jobs market the news is more mixed. The overall numbers in work was level on last month’s reading, however, indicating that job creation may be stalling.”

But... Tej Parikh, chief economist at the Institute of Directors, is concerned that companies can’t find enough staff:

“The labour market continues to be the UK economy’s strong suit, amid ongoing uncertainty.

“High employment has provided uplift to household incomes, which has supported the economy in a particularly challenging period. However, the booming jobs market has inevitably shown signs of losing momentum in recent months. As more and more people have entered work, businesses have found it harder to fill vacancies, and skills shortages are now clearly evident across all sectors.

David Smith of ING says construction and road haulage skills are in particular demand, meaning builders and lorry drivers can demand higher wages.

Ian Stewart, chief economist at Deloitte, suspects the labour market may cool in the coming months:

“The jobs market seems to have defied gravity, with wages rising and unemployment falling even as growth has slowed. The big question is how long can that last.

With job vacancies edging lower and firms more cautious on hiring, the pace of job creation could slow from here.”

A word of caution: The rise in employment may also be due to companies hiring staff rather than investing in new machinery and equipment until they know what’s happening with Brexit.

Employment Minister Alok Sharma says today’s jobs report shows the “resilience” of the UK labour market (in the face of Brexit uncertainty, presumably).

“Wages outpacing inflation for 16 months in a row, more people in work than ever before and joint-record female employment, means better prospects for many thousands of UK families and shows the continued resilience of the UK labour market.

“With unemployment still falling, remaining at its lowest level since 1974, it’s clear that UK employers continue to have confidence in our hard-working workforce.

Sharma is also urging Britain’s children to seek some work experience this summer.

With many schools breaking up this week there are some great opportunities for young people to get a taste of work over the summer – boosting their CVs as well as their bank balances as they prepare for their future careers.”

Don’t forget to get plenty of rest as well, younger readers, and perhaps some cricket in the park too.

Updated

The key charts from the jobs report.

This chart shows how more women are in work across the UK than ever before -- partly due to changes to retirement ages.

UK employment report, to May 2019

This shows how the jobless rate is lower than at any time since 1974.

UK employment report, to May 2019

And this shows how wages are at an 11-year high -- although this falls to a 3.5 year high once you adjust for inflation (ie in ‘real terms’).

UK employment report, to May 2019

The main message from today’s UK jobs report is that wage are going up, and unemployment has remained low.

Here are the key points:

  • The UK employment rate was estimated at 76.0%, higher than a year earlier (75.6%); on the quarter, the rate was 0.1 percentage points lower, the first quarterly decrease since June to August 2018.
  • The UK unemployment rate was estimated at 3.8%; it has not been lower since October to December 1974.
  • The UK economic inactivity rate was estimated at 20.9%, lower than a year earlier (21.0%).
  • Estimated annual growth in average weekly earnings for employees in Great Britain increased to 3.4% for total pay (including bonuses) and 3.6% for regular pay (excluding bonuses).
  • In real terms (after adjusting for inflation), total pay is estimated to have increased by 1.4% compared with a year earlier, and regular pay is estimated to have increased by 1.7%.

You can see the whole report here.

Economists and commentators are welcoming today’s UK jobs report, especially the rise in wages:

However, there are also signs that the jobs boom may be fading.

Employment growth slowed in the last quarter, rising by 28,000 in the last quarter to 32.749 million. That’s the slowest increase since June-August 2018.

The number of vacancies remained high, at 827,000 in the three months to June. That’s the lowest levels since March-May 2018.

In May alone, basic pay grew by 3.8%, much faster than inflation (which was 2% in May).

Total pay, including bonuses, jumped by 3.9% during May, suggesting that workers are finally managing to drive larger pay rises out of their bosses.

UK unemployment report released

Breaking! Britain’s unemployment rate has stuck at its lowest level since 1974, and wages growth is rising.

Average earnings, excluding bonuses, grew by 3.6% per year in the three months to May, according to the latest Labour Force survey from the Office for National Statistics.

That’s the fastest rise in nominal wages in over a decade, since July 2008.

Once you adjust for inflation, real basic wages rose by 1.7% in the quarter - the fastest since October 2015.

The overall unemployment rate remains at 3.8%, as expected - the best performance since Harold Wilson’s premiership.

More to follow....

Updated

The pound has also hit a six-month low against the euro, scraping €1.1080 for the first time since January, as concerns over the Irish backstop build.

Ricardo Evangelista, senior analyst at ActivTrades, says the threat of a disorderly Brexit this autumn is pushing the pound down.

Sterling weakness is justified by the increasing likelihood of a no deal Brexit.

Both candidates to be the next UK Prime Minister voiced their willingness to, if necessary, break away from the EU without a deal, should there be no agreement between the two parts.

At the same time, sources in Brussels alluded to increased toughness between the negotiating teams in the ongoing talks. In this scenario, there may be more downside risk ahead for the Pound.

Brexit worries seem to be weighing on the pound again.

Sterling has lost half a cent against the US dollar this morning to $1.246, close to last week’s six-month low.

Even once Ryanair’s new 737 Max planes arrive, passengers may struggle to spot them.... due to a discrete rebranding exercise.

A Boeing 737 Max due to be delivered to Ryanair has had the name Max dropped from the livery, further fuelling speculation that the manufacturer and airlines will seek to rebrand the troubled plane once it is given the all clear to fly again.

Photos have emerged of a 737 Max in Ryanair colours outside Boeing’s manufacturing hub, with the designation 737-8200 – instead of 737 Max – on the nose. The 737-8200 is a type name for the aircraft that is used by aviation agencies.

Updated

Irn-Bru maker sinks after profits warning

Bottles of Irn Bru in the production hall at AG Barr’s Irn Bru factory in Cumbernauld.
Bottles of Irn Bru in the production hall at AG Barr’s Irn Bru factory in Cumbernauld. Photograph: Andrew Milligan/PA

Shares in soft drinks maker AG Barr have tumbled by over a quarter this morning, after it shocked the City with a profits warning.

The Glasgow-based company, famous for its Irn-Bru, warned that trading in the current financial year is weaker than expected.

It blamed bad weather earlier this year for a 10% slump in sales over the last six months, and fears full-year profits will slump by 20%.

It told investors.

Trading in the financial year to date has been below our expectations.

This has been exacerbated by some specific brand challenges, particularly in Rockstar energy and Rubicon juice drinks, as well as disappointing spring and early summer weather, most notably in Scotland and the north of England, and compounded further as we approach the half year when the prior year comparative weather was at its peak.

AG Barr shareholder may need a sip of something stronger than a can of guava-flavoured Rubicon. Shares in the company have slumped 27% to 629p, the lowest since November 2017.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, says AG Barr’s sales have also been hit by price rises, having cut prices last year to absorb the hit from the UK’s sugar tax.

“To say this is a curve ball is an understatement. Consumer goods companies like AG Barr are supposed to be reliable compounders, with sales that turn up come rain or shine.

Unfortunately the combination of price changes and a bit more rain than shine has seen sales of Barr’s soft drinks trailing behind last year’s performance, and profits struggling even more.

Updated

In Dublin, Ryanair shares have jumped by 1.5% in early trading to €10.30 each.

Traders may be relieved that the airline is taking action to address the Max delays, and perhaps also pleased that the damage isn’t worse. At least Ryanair still expects to grow passenger numbers, if only by 3% not 7% as hoped before.

Other airline shares are also rising, as Ryanair’s capacity cuts should help them to raise their own fares (bad news for holidaymakers!). EasyJet has gained 3% and IAG (owner of British Airways) are up 2%.

Neil Wilson of Markets.com says the Boeing 737 Max crisis has “shattered” Ryanair’s 2020 planning.

The airline’s growth plans had been based around getting 58 of the new Max 200 jets - which are more fuel efficient than earlier models, cutting costs.

But if Ryanair can only get 30 by next summer, then Ryanair simply won’t be able to grow as quickly as hoped.

Wilson explains:

This will significantly affect passenger growth, which management says will be fall to around 3% for summer 2020 against 7% previously expected. Full year to March 2021 traffic now seen at 157m against 162m previously guided.

We may also see decline in passenger growth this year as Ryanair is planning to cut capacity ahead of the 2019 winter season in readiness.

Updated

Some reaction to Ryanair’s announcement:

Ryanair to cut services due to Boeing 737 Max crisis

Passengers boarding a Ryanair flight in Athens
Passengers boarding a Ryanair flight in Athens Photograph: Simon Leigh/Alamy Stock Photo

Ouch. Budget airline Ryanair has announced plans to shutter some services, after being hit by the crisis around Boeing’s 737 Max plane.

With the 737 Max still grounded, Ryanair has been forced to slash its passenger growth forecast for summer 2020 to just 3%, from 7%.

It had previously expected to take delivery of 58 of Boeing’s new jets by next summer, but this has now been revised down to 30 (assuming the plane is cleared to fly again, following two crashes claiming hundreds of lives).

CEO Michael O’Leary warns that this disruption will forced Ryanair to stop flying to certain airports — a blow to passengers, and also staff on the ground who could be laid off.

O’Leary says:

This shortfall in aircraft deliveries will necessitate some base cuts and closures for summer 2020, but also for the winter 2019 schedule.

We are starting a series of discussions with our airports to determine which of Ryanair’s underperforming or loss making bases should suffer these short term cuts and/or closures from November 2019.

Here’s the full story:

Updated

Introduction: UK jobs report

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

Today we discover how Britain’s labour market is faring in the face of continual Brexit uncertainty and a slowing global economy.

Economists are hopeful that the UK’s unemployment remained low in the three months to May, matching the 3.8% recorded a month ago. It’s not been lower since the mid-1970s.

UK unemployment rate
The UK unemployment rate Photograph: ONS

The employment total could also remain at record levels, tipped to rise by around 45,000 over the last quarter.

But are workers benefitting? The City expects basic pay (excluding bonuses) to have grown by 3.5% per year, up from 3.4% a month ago.

David Madden, market analyst at CMC Markets, says strong wage growth would boost the economy.

Should the wages rate tick up it should bode well for the British economy as workers who earn more usually spend more.

Konstantinos Anthis, head of research at ADSS, expects a decent jobs report.

Despite the mess the Brexit process has been in throughout the year, the labor market in Britain continues to showcase a rather robust performance and today’s figures should confirm that.

Economists expect job and wage growth to have picked up marginally last month while the unemployment rate probably remained steady.

Also coming up today

New US retail sales figures, and the latest ZEW report on German economic sentiment, could also move markets today.

Finance ministers and central bankers from the G7 countries are meeting in Chantilly, near Paris. They’ll be discussing European plans to impose higher taxes on US technology giants, despite a backlash from America.

French finance minister Bruno Le Maire is due to discuss the issue with Treasury secretary Steven Mnuchin. The White House has already opened a so-called “Section 301 investigation” into the measure -- that’s the same tool used to underpin the trade war with China.

On the corporate front, JP Morgan and Goldman Sachs are both reporting results before the Wall Street bell.

The agenda

  • 9.30am BST: UK unemployment report - expected to remain at 3.8% in March-May, lowest since 1974
  • 10am BST: ZEW survey of German economic confidence.
  • 1pm BST: Bank of England governor Mark Carney speaks
  • 1.30pm BST: US retail sales for June - growth of +0.2% expected, from +0.5%

Updated

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