Closing summary: global markets close down as oil falls 2%
Global markets are red across the board this afternoon as lower oil prices have accelerated losses in Europe and the US.
Here is how the major indices across Europe closed:
- FTSE 100: -0.7% at 7,473
- FTSE 250: -0.5% at 19,772
- Germany’s DAX: -0.6% at 12,815
- France’s CAC: -0.3% at 5,294
- Italy’s FTSE MIB: -1% at 20,810
- Spain’s IBEX: -1% at 10,746
- Europe’s STOXX 600: -0.7% at 389
Brent crude oil is down 2.2% at $45.86 a barrel.
Over in the currency markets the pound is still sharply lower against the dollar and the euro, after Bank of England governor Mark Carney said the UK economy was not yet ready for a rise in interest rates.
Sterling is 0.9% down against the dollar at $1.2617, and at one point was as low as $1.2603, the lowest since 18 April. Against the euro then pound is down 0.7% at €1.1343.
That’s all for today folks. Thanks for reading the blog and for all your comments. Please join us again tomorrow. AM
Updated
Unison’s annual conference is underway in Brighton and the squeeze on living standards is on the agenda.
The trade union, which represents more than 1.3 million workers who provide public services, is calling for an end to pay freezes and austerity.
Here is what Dave Prentis, general secretary, had to say:
We live in a kingdom dangerously divided into the haves and the have-nots. Some are living in misery and poverty – or even in extreme danger as we have seen last week.
The catastrophe at Grenfell Tower was the epitome of a tale of two cities. People living in wealth and luxury side by side with those living in poverty.
The Prime Minister appears to be unable to give the support people need or be the leader this country wants. This contrasts with the warmth and compassion shown by the public, and the bravery shown by the heroes of the emergency services.
Public service champions – including nurses, hospital porters and council workers – are working together and supporting each other. We live in a country full of heroes.
Jeremy Corbyn is the man capable of taking this country in the right direction. Some said he was unelectable but people saw hope and someone worth voting for. They’ve seen a man who can be Prime Minister.It’s time for a Labour government with our values and our manifesto. A manifesto against job cuts, police cuts and pay freezes that ends the senseless pain of austerity.
This government’s austerity pay policies have crushed public services under their heel. They have ground down public service employees.
They’re worried about their jobs, their families and can’t go through another five years of poverty pay. Now is the time to shout enough is enough. This is the year to smash the pay cap.
SNP: Carney has issued a Brexit reality check
The Scottish National Party says Bank of England governor Mark Carney delivered a “blunt Brexit reality check” when he made his annual Mansion House speech this morning.
Stewart Hosie MP:
Today the governor of the Bank of England confirmed that Brexit is beginning to bite hard – and that our economy and people’s wages are bearing the brunt. His speech paints an extremely depressing picture.
It is fundamentally unfair, when Scotland voted expressly against this eventuality, that the Tories continue to drag us towards the hard Brexit cliff edge, putting jobs and growth at risk.
The SNP has set out our position in clear terms – we want Scotland to maintain our place in the single market, to maintain our place in the customs union and will work hard to protect jobs and wages. The need for this approach has been underlined by Mark Carney’s comments today – the Tories cannot continue to ignore Scotland’s voice.
Jasper Lawler, senior market analyst at London Capital Group, has given his take on the latest market moves.
Here in the UK...
The FTSE 100 erased early forex-induced gains by the afternoon when energy sector shares slumped alongside the price of oil. Investors were also weighing up the implications of fraud charges against former Barclays executives.
Broader stock markets have been weathering the three-week slide in the oil price on the assumption prices will stay within the price range seen over the past 12 months. The further we move below $50 per barrel, the more worrisome the bruising taken by oil prices gets for stocks.
And over in the US:
Stocks in the US turned lower in early trading. Another day of record highs might be scuppered by concern around the persistent downtrend in oil and other commodity prices.
Apart from sending Amazon shares to new stratospheric levels, the deal to buy Whole Foods has been a negative force on the US stock market.
Wall Street falls on lower oil price
US markets are slightly down in early trading:
- Dow Jones: -0.03% at 21,521
- S&P 500: -0.3% at 2,446
- Nasdaq: -0.2% at 5,758
Oil prices have fallen to seven-month lows after news of increases in supply from several key producers.
Brent crude is down sharply:
Elsewhere in Europe, major markets are mixed.
- Germany’s DAX: +0.04% at 12,894
- France’s CAC: +0.2% at 5,320
- Italy’s FTSE MIB: -0.5% at 20,909
- Spain’s IBEX: -0.5% at 10,799
- Europe’s STOXX 600: -0.2% at 391
The FTSE 250, which is more UK-focused than the FTSE 100, is down 0.4% at 19,796.
FTSE 100 dragged lower by commodity stocks
A weaker pound is often a plus for the FTSE 100 where companies tend to be internationally focused.
It isn’t the case at the moment however as a falling oil price in dragging down commodity stocks. Brent crude is down 2.6% at $45.68 a barrel.
The FTSE 100 is currently down 16 points or 0.2% at 7,508. Here is the list of the index’s biggest fallers:
Umunna: government must drop 'no Brexit deal' threat
Labour MP Chuka Umunna has commented on Philip Hammond’s Mansion House speech.
Speaking as a supporter of Open Britain, the campaign against a so-called hard Brexit, Umunna said:
The chancellor is absolutely right that nobody voted in the referendum to become poorer. That is why it is vital that the government negotiates a Brexit deal that puts jobs and our economy first.
To do so, the government needs to recognise that it cannot continue to threaten a Brexit with no deal at all. And they should reopen the possibility of keeping Britain in the single market and customs union, which would be the best option for our economy.
Summary: Pound hit by dovish Carney and S&P warning
Time for a recap:
The pound has fallen sharply after Bank of England governor Mark Carney argued against raising UK interest rates.
In his delayed Mansion House speech, Carney argued that the UK economy is too weak to support higher borrowing costs, especially as Brexit is at a critical point.
Carney told an audience in London that:
From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment.
In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and more generally, how the economy reacts to the prospect of tighter financial conditions and the reality of Brexit negotiations.
This has knocked almost a cent off the pound, to $1.2654 - close to a two-month low.
City analysts say Carney has calmed speculation that interest rates could rise soon, after three policymakers voted for a hike last week.
FXTM Research Analyst Lukman Otunuga says concerns over Brexit are weighing on the pound.
That’s on top of Mark Carney’s speech arguing against raising UK interest rates anytime soon.
Otunuga explains:
Sterling was in trouble during Tuesday’s trading session with prices tumbling to a weekly low at 1.266 after Mark Carney suggested that interest rates should be kept on hold amid Brexit uncertainty.
It is becoming clear that the rising fears of Brexit negotiations negatively impacting economic growth continues to weigh heavily on sentiment while prolonged periods of uncertainty has ensured Pound weakness remains a recurrent theme.
With both consumer spending and business investments dishing out mixed signals, and tepid wage growth still a cause for concern, “now is not yet the time to raise interest rates” according to Mark Carney.
The pound is falling further against the euro too, down almost one eurocent at €1.134.
That’s a one-week low, and close to the eight-month low of €1.1276 hit after June’s UK general election.
Pound falls towards two-month lows as S&P issues warning
Rating agency Standard & Poor’s have warned that it could downgrade the UK before the terms of the Brexit deal are known, putting even more pressure on the pound.
S&P sovereign ratings chief Moritz Kraemer told Reuters that S&P needn’t wait until the negotiations have been concluded in 2019.
Asked if it would wait until the end of the Brexit negotiations to take another ratings action on Britain, Kraemer said:
“No, we don’t have to wait.”
“We will review the UK every six months... and if necessary more often...
We will be watching the economic implications, the implications for the public finances, the constitutional implications like the whole Scotland situation...and things like the currency and if it will maintain its reserve status.”
S&P slashed the UK’s credit rating by two-notches to AA , from Triple A, after the Brexit vote last summer. It currently has a ‘negative outlook’ on the debt, suggesting another cut is possible.
That has given currency traders another reason to sell the pound, which is still bruised by Mark Carney’s comments this morning.
This ‘candlestick formation’ shows how sterling has fallen to a one-week low of $1.266, down 0.5%, and is barely above the two-month low struck after the UK election results.
Updated
Britain’s carmakers have added their weight to calls for Britain to agree a transition deal after it leaves the EU.
The Society of Motor Manufacturers and Traders warned that a “cliff-edge” Brexit was the worst possible outcome for the automotive industry.
Mike Hawes, the chief executive of the SMMT, said:
“We accept that we are leaving the European Union and we share the desire for that departure to be a success. But our biggest fear is that, in two years’ time, we fall off a cliff edge – no deal, outside the single market and customs union and trading on inferior WTO terms.
“This would undermine our competitiveness and our ability to attract the investment that is critical to future growth.”
The auto industry provides 12.0% of total UK export of goods, according to the SMMT, with 169,000 people employed directly in manufacturing, and over 800,000 in the wider industry.
Here’s the full story:
Tesco is busy apologising to customers caught up in its home delivery problems.
It says:
We’re currently experiencing an IT issue which is affecting some Grocery Home Shopping orders.
“We’re working hard to fix this problem and apologise to customers for any inconvenience this may cause.”
Its social media team are handling a lot of criticism too:
Hi Julia, we're working hard to contact all affected customers. Any orders cancelled due to system errors wouldn't have been charged. - Mike
— Tesco (@Tesco) June 20, 2017
Hi Donna, I am very sorry for any upset this has caused. Due to an unforeseen technical fault we were unable to process all of our orders.
— Tesco (@Tesco) June 20, 2017
Updated
Tesco home deliveries hit by glitch
In other news....Tesco customers are reporting problems with the supermarket giant’s home delivery service.
Many are complaining on social media that their orders have been cancelled.
According to a company spokesman, around 10% of orders have been affected. Tesco is blaming a “computer glitch”, and offering a £10 voucher as compensation, according to the BBC.
Here’s a few of the customers affected:
Text at 10.17am cancelling an order that should have arrived by 10am. Pretty awful.
— Bex Shearman (@Bexx_Shearman) June 20, 2017
Come on @Tesco - order cancelled until tomorrow - not cool when full of stuff needed for a small baby 👶🏼
— Kaite Helps (@kaitehelps) June 20, 2017
@Tesco you cancel an order and i have to ring to find out. Thanks very much cancel my delivery saver I'll shop at Sainsbury's
— Helen Heenan (@HelenHeenan1) June 20, 2017
@Tesco had a message left saying order cancelled and now a text saying delivery between 11 & 12???Am I getting shopping or not?🤔
— Victoria Clarke (@littleviki13) June 20, 2017
Updated
Here’s Paresh Davdra, CEO and Co-Founder of RationalFX, on Mark Carney and Philip Hammond’s speeches this morning:
For analysts who were awaiting Carney’s response to the BoE policy meeting last week, this announcement has dampened expectations of a significant policy change in the near future, with the governor citing low wage growth and mixed signals on consumer spending as the reasons for his decision.
There were some positives for investors from Hammond however, as he proposed arrangements for a transitionary period during the Brexit process and beyond which would see the customs union rules remain in place for the UK until new rules are implemented and other measures agreed that would protect the city and prevent disruption.”
Analysis: Carney's rebuke is for public consumption
Taken at face value, Mark Carney’s insistence that interest rates would stay at rock bottom levels until the smoke had cleared from the Brexit talks was quite a rebuke to colleagues who voted for a rate rise only last week.
The Bank of England governor was in combative mood as he listed the many reasons for keeping the base rate at 0.25%, not least the febrile atmosphere inside City trading rooms.
Michael Saunders, Kristin Forbes and Ian McCafferty were the three members on the monetary policy committee to warn that rising inflation needed to be calmed by an increase in rates.
You might think they would seem foolish now that a slap from the governor is visible on their livid cheeks.
But it is more likely that the governor was quite content to see the huge amount of coverage in the news media for the MPC’s dissenting minority. The slap, if we can call it that, was staged.
Knowing that rates cannot rise without thousands of businesses going bust and millions of households getting into financial trouble, Carney is playing a game. With the economy struggling as Brexit talks begin, the dangers are apparent.
For this reason he must talk tough to prevent consumers heaping more cheap credit on their already huge borrowing, thereby creating a dangerous lending bubble. At the same time he wants to keep the credit wheels turning to keep the economy from falling over.
He can’t do this alone. The committee needs to play its part. We must assume that Forbes’s replacement, the London School of Economics professor Silvana Tenreyro, and whoever takes over from Charlotte Hogg, have been briefed.
The drop in the pound has pushed up the value of multinational companies listed in London, as their overseas earnings are now more valuable.
Global advertising giant WPP is leading the way, up 2.2%. Other gainers include luxury fashion chain Burberry (+1.5%) and consumer good titan Unilever (+1.2%).
This has nudged the FTSE 100 up by 11 points to 7535, close to the alltime closing high of 7547.
The ‘intraday’ high for the FTSE 100 is 7598.
Updated
Carney’s caution suggests that UK interest rates will remain at their current record low throughout 2017, and possibly until 2019, says Howard Archer of the EY Item Club.
“Mark Carney’s cautious stance fuels our belief that interest rates will not be rising any time soon, given a stuttering UK economy and uncertainties over its outlook....
“We maintain the view that the Bank of England will hold off from raising interest rates in 2017. A tightening in 2018 also looks highly questionable given the cloudy outlook
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Mark Carney has “emphatically” distanced himself from the three hawkish MPC members who voted to raise interest rates from 0.25% to 0.5% last week.
So says Sam Hill of Royal Bank of Canada.
He adds:
Carney’s reference to the “coming months” implies that his vote for an unchanged policy stance is set to prevail at the August Inflation Report, and beyond whilst these uncertainties are resolved.
Whilst there are still many members we haven’t heard from since the election purdah period ended (Haldane comments will be published tomorrow), it is significant that the Governor has now shown that the range of views on the Committee is broad, with his own being distinctly different to those who voted for a hike last week.
It’s also worth remembering that the most hawkish MPC member, Kristin Forbes, steps down at the end of the month. Her replacement, Silvana Tenreyro, is expected to be more dovish.
Mark Carney comments come just a week after UK inflation rate jumped to 2.9%, well over the Bank’s 2% target, and much faster than wages.
So if the Bank resists pressure to raise interest rates to curb inflation, workers may suffer falling real wages for even longer.
Kathleen Brooks, currency expert at cityindex.co.uk, explains:
This morning’s comments are important because they suggest that the Bank of England will look through the period of high inflation, headline CPI is running at 2.9%, blaming the rise on the sharp drop in sterling last year.
This could spell more woe for the UK consumer, if the BOE is not going to take action to bring down prices, this could keep the squeeze on pay packets for some time.
She also suspects that the pound could keep falling:
In the very short term we are looking at $1.2650 – the bottom of the range from the last 10-days - if we break below here it would be a short-term bearish development.”
Updated
Mark Carney has laid a “a thick layer of dovishness” over the City today, says Neil Wilson of ETX Capital.
He writes:
Carney’s warning that ‘now is not the time’ to tighten should hardly be a surprise, given his record of favouring looser monetary policy, but it does reiterate the MPC’s preference for looking through the current high levels of inflation for the time being.
However, inflationary pressure could still force the Bank’s hand, he adds:
There are plenty who think that the Bank’s decision to cut last summer following the Brexit vote was folly and rising inflation offers a chance to correct that ‘error’. However the departure of arch-hawk Kristin Forbes leaves those calling for tightening in a greater minority than before
This is from Alpesh Paleja, the CBI’s principal economist:
Carney not close to voting for a rate rise, and churn on the #MPC could see a shift in balance of views. Also, loving the cake metaphor! pic.twitter.com/r0CEUG1nda
— Alpesh Paleja (@AlpeshPaleja) June 20, 2017
Carney speech: instant reaction
Mark Carney’s comments show that the Bank of England is not inching close to a rate hike, says Mike Bird of the WSJ:
Not a huge mkt reaction to Carney, £ off about 0.5% vs € & $. Confirmation if any needed that 3 hike votes don't reflect growing BOE mood pic.twitter.com/z3wJIjQ3Pc
— Mike Bird (@Birdyword) June 20, 2017
Allie Renison of the Institute of Directors is struck by Carney’s call for a ‘transitional deal’ to help firms cope with Brexit.
Carney much starker than Chancellor on imp. of transitional arrangements. Wd be, as BoE has asked fin. firms for contigency plans by July 14
— Allie Renison (@AllieRenison) June 20, 2017
#Brexit negotiations will test the U.K.’s ability to deliver an economy that works for all says Mark Carney at Mansion House breakfast #news
— Silvia Borrelli (@London_Silvia) June 20, 2017
Mark Carney on rising interest rates: “Now is not yet the time to begin that adjustment” #mansionhouse #news
— Silvia Borrelli (@London_Silvia) June 20, 2017
The Telegraph’s Michael Deacon knows exactly who Carney was aiming for, with his comment about Brexit being a piece of cake:
Mark Carney mocks Boris: "Before long we'll find out the extent to which Brexit is a gentle stroll to a land of cake and consumption"
— Michael Deacon (@MichaelPDeacon) June 20, 2017
Carney's got jokes pic.twitter.com/UeRNBgBBaE
— Sarah Rappaport (@SarahRapp) June 20, 2017
Apologies, there was a daft typo in that earlier entry about the pound.
To be clear, the pound has fallen to $1.2675, a one-week low, down from $1.275 before Mark Carney’s speech hit the wires.
Sterling is also down 0.5% against the euro, to 87.9p from 87.4p.
That means one pound buys €1.137, from €1.142 earlier this morning.
Hope that’s clear! Many thanks to all those who pointed it out.
Updated
Carney concludes his speech by questioning whether Brexit will be a cakewalk - a mischievous nod to Brexiteers who argued that Britain can ‘have its cake and eat it’ after it leaves the EU.
The governor says the success, or otherwise, of Brexit depends on whether the two sides can agree a ‘transition’ arrangement (something Philip Hammond also called for today).
Carney says:
“Depending on whether and when any transition arrangement can be agreed, firms on either side of the channel may soon need to activate contingency plans.
“Before long, we will all begin to find out the extent to which Brexit is a gentle stroll along a smooth path to a land of cake and consumption.”
Carney: I can't stop Brexit damage
Carney has a chilly warning for Britons -- Brexit is going to hurt the economy, and he can’t stop that happening.
However, the Bank can balance how this pain is shared; either through unemployment, or inflation, depending on how it sets interest rates.
Monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU. But it can influence how this hit to incomes is distributed between job losses and price rises.
Carney has also warned that Britain will suffer badly if the City of London faces higher barriers to trade:
One million people across this country work in financial services. The industry contributes 7% of output and pays taxes that cover almost two thirds of the cost of the NHS. At a time when the UK is running a 5% current account deficit, financial services runs a 1.5% trade surplus with Europe alone. The entire service sector runs a 5% surplus with the world and employs 85% of UK workers.
We could take these realities for granted. And it would be all too easy to give into protectionism. But as we learned in the 1930s, that road leads neither to equity nor prosperity. Raising barriers to trade disproportionately hurts the least well off through higher prices and fewer opportunities.
Carney is also warning against the creeping tide of protectionism, saying that stronger trade is the key to boosting global growth.
The governor says countries need to look outwards, not impose new barriers.
The G20 faces a choice – between levelling down by putting more restrictions on goods trade, or levelling up by liberalising trade in services.
Evidence from within countries suggests that there may be substantial scope to increase trade in services if barriers are removed. For example, in Canada – one of the few countries to track trade flows within its borders – services account for around 50% of all inter-provincial trade compared with only 25% of Canada’s international exports. If Canada were able to replicate the pattern of trade within its borders with other countries then services exports would triple.
Pound hits one-week low as Carney says rates shouldn't rise yet
Breaking: Sterling has fallen sharply to a one-week low as Mark Carney declares that Britain isn’t ready for higher interest rates.
The pound shed half a cent to $1.2675 against the US dollar, and is down against the euro too.
The Bank of England governor is arguing that it would be wrong to raise borrowing costs now, before we know how the Brexit negotiations will play out.
He also tells the audience at Mansion House this morning that wage growth is too weak to justify a rate hike.
Carney acknowledges that his monetary policy committee are split on this issue (they voted 5-3 to leave rates on hold last week). But he is not ready to join the three hawks pushing for higher borrowing costs.
Carney says:
Different members of the MPC will understandably have different views about the outlook and therefore on the potential timing of any Bank Rate increase. But all expect that any changes would be limited in scope and gradual in pace.
From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment.
In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and more generally, how the economy reacts to the prospect of tighter financial conditions and the reality of Brexit negotiations.
Updated
Now Mark Carney is on his feet.
The Bank of England governor begins his speech by touching on the tragic events of recent weeks, which have reminded us of the “fine balance between hope and despair”.
He says:
Despair at the murder of Jo Cox [one year ago last week]. Hope in her remarkable life of service – an inspiration that lives on in her family, friends, colleagues and many admirers.
Despair at the terrorist attacks in Manchester, Borough Market and Finsbury Park. Despair at the tragedy of Grenfell Tower.
Hope in the heroism, resiliency and the community of the responses. Hope when we recognise our common humanity.
The best tribute this City and this Country can give to the memories of those lost is to renew our shared commitment – whatever our differences – to promote the common good.
And that includes pursuing a Brexit, and building an economy, that works for all, he adds.....
Updated
The key message from Philip Hammond today is that Britain can achieve a Brexit that works for the people.
But it must have four strands:
- A comprehensive agreement on trade and services.
- A mutually beneficial transitional arrangement, avoiding disruption and dangerous cliff edges.
- Frictionless customs arrangements.
- An implementation period, when the UK will be outside the customs union, but customs rules will remain in place pending the new rules coming into force.
Andy Sparrow’s Politics Liveblog is covering all the details too (in a frictionless, mutually beneficial arrangement....)
Hammond fires a warning shot at those who want to take EU derivatives trading out of London.
This will lead to a lower-quality, higher-priced financial services, he warns.
As expected, Hammond says Britain will almost certainly need an implementation period after Brexit, so that customs border arrangements can continue.
Ireland’s land border must stay open and freeflowing too, he continues -- a very hot issue, as Theresa May continues to negotiate with Northern Ireland’s DUP party.
On trade, Hammond says Britain needs to be able to trade effectively with EU members after Brexit.
And on migration, the chancellor reads from the (notorious) Conservative manifesto that Britain needs to keep recruiting the “brightest and the best from around the world”.
Britain has benefitted from globalisation, he continues, but it can’t turn a blind eye to the hostility to it in parts of the developed world.
Britain is tired of austerity after seven years of it, the chancellor continues - perhaps a nod that he will loosen the pursestrings in the autumn budget.
But he is still committing to eliminating the budget deficit by the end of the next decade.
He also promises to provide assurances to the European Investment Bank (EIB) to ensure that funds keep flowing to UK businesses after Brexit.
Updated
Hammond: We need a new case for a market economy
Onto fiscal issues.
Hammond says the Conservatives are committed to keeping taxes as low as possible, to encourage growth.
He’s also opposed to raising borrowing to fund current consumption, as that only passes the bill onto future generations.
Stronger growth is the only sustainable way to deliver better public services and jobs, says Hammond.
I thought we had won that argument, but the general election has shown that we must make a new case for “a market economy and sound money” says Hammond (a nod to Jeremy Corbyn’s better than expected performance).
Hammond now turns to Brexit, saying that there is much work to do.
But the UK has a solid foundation, he argues. It was one of the fastest growing G7 economies in 2016.
He then takes a pop at his predecessor, adding that Britain has created millions of new jobs in the last few years “even if you only count George Osborne once”.
Hammond: Grenfell must never happen again
Philip Hammond is speaking now.
He begins by thanking the City of London corporation for rescheduling today’s event, after the appalling tragedy that was unfolding at Grenfell Tower.
The chancellor says that Britain has suffered a series of shocking events in recent weeks - terror attacks at Manchester, London Bridge, Finsbury Park yesterday, and at Grenfell.
Grenfell was an “unimaginable tragedy”, Hammond continues, and his thought are with all those affected by it.
The immediate priority is to make sure that that the survivors have everything they need.
But that’s isn’t all.
We must also get to the bottom of the failure at Grenfell and take decisive action to make sure nothing like this happens again.
You should be able to watch the Mansion House speeches on the TV news. Bloomberg are streaming it.
Bloomberg expect Hammond to make the case for a softer Brexit that doesn’t cause as much damage to the economy.
The room at Mansion House is filling up nicely, to hear from Hammond and Carney.
Helena Morrissey, head of personal investing at LGIM and a driving force to get more women into the boardroom, is there.
On my way to Mansion House to hear the Chancellor. I'm assuming we'll be served "full English", even in this weather. Maybe no snuff though.
— Helena Morrissey (@MorrisseyHelena) June 20, 2017
So is conservative MPs Steve Barclay and Vicky Ford.
Off to Mansion House to hear @PhilipHammondUK set out how we improve UK productivity, address regional inbalances, & continue jobs growth
— Steve Barclay MP (@SteveBarclay) June 20, 2017
On way to listen to @PhilipHammondUK speech at Mansion House - worth an early start!
— Vicky Ford (@vickyford) June 20, 2017
The agenda: Delayed Mansion House speeches from Carney and Hammond
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The great and the good of the City of London are heading to Mansion House this morning, to hear from Bank of England governor Mark Carney and chancellor Philip Hammond.
The two men, who between them handle the UK’s fiscal and monetary levers, are expected to outline their plans to protect Britain’s growth prospects in the face of Brexit.
These speeches were originally scheduled for last Thursday night, before the City of London corporation cancelled the Mansion House event altogether following the Grenfell Tower disaster.
It was hardly appropriate to have City grandees hobnobbing in black tie and quaffing expensive vintages.
So instead, it has been rescheduled as a breakfast event this morning.
This is the first time we’ve heard from Carney since the Bank of England was dramatically split over interest rates last week. Three policymakers voted to hike borrowing costs, startling the City, while five voted for no-change.
As a reminder, the rescheduled release of BoE Governor Carney's Mansion House Speech, following the 5 - 3 vote, expected at 8.30BST
— RANsquawk (@RANsquawk) June 20, 2017
Hammond’s speech will also be closely watched. He had been expected use last week’s speech to argue against a Hard Brexit, and call on prime minister Theresa May to ensure Britain gets a significant “transition period” after Brexit, to help businesses adapt.
Over the weekend, the chancellor hinted that he might ease up on austerity following the Conservative Party’s election bloody nose.
Hammond had looked set to lose his job until May’s election flop. He has now re-emerged as big business’ leading proponent in government and might provide more details on Tuesday on how he thinks the two-year Brexit process should run.
Hammond may also give more details of his budget plans after saying on Sunday that he was “not deaf” to the weariness of voters to nearly a decade of spending cuts for many services and tight controls on public sector pay.
BoE Carney & Chancellor Hammond deliver the rescheduled Mansion House speech this morning over breakfast so we are expecting early comments
— Anthony Cheung (@AWMCheung) June 20, 2017
Also coming up today...
The other big news this morning is that the Serious Fraud Office has charged Barclays, and four former top executives, over its fundraising from Qatar during the 2008 financial crisis.
SFO has charged Barclays and four individuals with conspiracy to commit fraud and the provision of unlawful financial assistance
— Jill Treanor (@jilltreanor) June 20, 2017
The four former Barclays execs charged are John Varley, Roger Jenkins, Thomas Kalaris and Richard Boath.
— Jill Treanor (@jilltreanor) June 20, 2017
There is no immediate reaction from the bank or the former bankers
— Jill Treanor (@jilltreanor) June 20, 2017
We should also get more details of Argentina’s innovative plan to issue 100-year bonds, despite having defaulted on its debts more than once....
Hang on - is there another country called Argentina? https://t.co/uDdkCKiHSi pic.twitter.com/CECfofNJit
— Duncan Weldon (@DuncanWeldon) June 20, 2017
Here’s today’s agenda:
- From 8am: Philip Hammond’s speech at Mansion House
- 8.30am: Mark Carney’s speech at Mansion House
- 9am: Eurozone current account for April
Updated
