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The Guardian - UK
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Graeme Wearden (until 2.30) and Nick Fletcher

Pound hits another 31-year low as Hammond launches Wall Street charm offensive –as it happened

Chancellor of the Exchequer Philip Hammond.
Chancellor of the Exchequer Philip Hammond. Photograph: Joe Giddens/PA

European markets edge lower

With investors cautious ahead of the US non=farm payroll numbers on Friday, markets slipped back once more. Brexit concerns and continuing weakness in the pound added to the nervousness, amid growing anxiety about whether the UK would stay in the single market. Things were not helped by a profit warning from budget airline easyJet. The final scores showed:

  • The FTSE 100 finished down 0.47% or 33.29 points at 6999.96
  • Germany’s Dax dipped 0.16% to 10,568.80
  • France’s Cac closed down 0.22% at 4480.10
  • Italy’s FTSE MIB was the exception, up 0.09% at 16,491.62
  • Spain’s Ibex ended down 0.24% at 8757.4
  • In Greece, the Athens market slipped 0.20% to 574.22

On Wall Street, the Dow Jones Industrial Average is currently down 19 points or 0.1%.

Meanwhile the pound is down 0.85% at $1.2640 - off its worst level of $1.2623 - and 0.42% lower against the euro at €1.1324.

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

IMF and World Bank defend free trade

At the IMF and World Bank meeting, there has been a strong defence of globalisation. Larry Elliott reports:

The leaders of the International Monetary Fund and the World Bank have launched a strong defence of open markets and free trade, as concern grows that the Brexit vote and calls for protectionism in the US presidential election represent a backlash against globalisation.

Christine Lagarde, the IMF’s managing director, said international trade had been a force for good in the past few decades but that without a more equal division of the benefits of growth there was a risk of barriers going back up.

As part of a concerted push back against protectionism, the World Bank’s president, Jim Yong Kim, said China had lifted 700 million people out of poverty as a result of trade and opening its economy to competition.

Kim said the UK’s vote to leave the European Union, the US presidential race and looming elections in Europe were adding to uncertainty. “These are all risks. Uncertainty is normally very bad for most developing countries.”

Outlining her global policy agenda, Lagarde said: “Policymakers should act and use a balanced mix of all policy levers to revive demand and raise productivity, and ensure the gains from technology and globalisation – which have led to unprecedented global welfare gains in recent decades – are shared more broadly.

“A retreat from globalisation and multilateralism is a serious risk at a time when international cooperation and coordination are as critical as ever.”

The full story is here:

Carney - May's comments not an attack on Bank

Following UK prime minister Theresa May criticising the Bank of England’s quantitative easing programme and chancellor Philip Hammond’s subsequent comments backing Mark Carney to stay on at the Bank of England, the governor is defending himself in Washington.

He said he agreed with the spirit of May’s comments on QE and admitted monetary policy had “distributional consequences” but said it was not the job of the central bank to offset those.

And he said May’s comments were absolutely not an attack on the Bank’s independence.

As a reminder, this is what May said:

Because while monetary policy – with super-low interest rates and quantitative easing – provided the necessary emergency medicine after the financial crash, we have to acknowledge there have been some bad side effects.

People with assets have got richer. People without them have suffered. People with mortgages have found their debts cheaper. People with savings have found themselves poorer.

A change has got to come. And we are going to deliver it.

FTSE 100 closes below 7000 - just

Just days after all the excitement about the UK’s leading index soaring through the 7000 barrier and heading towards a new high, it has sagged back below that level with a bit of a whimper.

It has closed down 33.29 points at 6999.96 as the uncertainty over Britain’s exit from the European Union continued, with the trade off between migration controls and remaining in the single market still unresolved. Fears of a hard Brexit continued despite chancellor Philip Hammond maintaining the government would seek the right Brexit for both the UK and EU.

Updated

Better than expected US weekly jobless claims - coming ahead of Friday’s non-farm payroll numbers - have renewed talk that the Federal Reserve would have leeway to raise interest rates, and thus helped push the dollar higher.

That of course means the pound continues to be pressured, as if there were not enough negative noises around the UK currency. Jasper Lawler, market analyst at CMC Markets, said:

There were three G’s selling off in markets; the Great British pound, gilts and gold. An apparent shift in UK politics under the wing of Teresa May towards an interventionist and anti-business agenda was not received well in markets. The pound slid again in what has become a relentless barrage of selling, UK government bonds were sold and the FTSE 100 underperformed its European peers.

Comments from the German chancellor have also been taken as another sell signal for the pound.

Connor Campbell at Spreadex said:

It seems that we are firmly back in Brexit-dominating territory – even the mildest squawkings from the news-wire are causing pain for the pound. Today it was the turn of Angela Merkel to make sterling’s life even more difficult, the German leader resolute in her claim that freedom of movement is a must if Britain wants to stand any chance of remaining in the single market.

This, alongside seemingly the very idea that Chancellor Phillip Hammond has had to make a trip to Wall Street to reassure US banks about London’s position as a financial hub post-Brexit, has led the pound to its latest 31 year nadir against the dollar and a 5 year low against the euro.

At the moment the pound is down 0.8% at $1.2646 and 0.47% lower against the euro at €1.1319.

Updated

Philip Hammond has also been on CNBC, reports Reuters:

Any future decision on whether the British government should approve another round of quantitative easing to spur the economy will be taken “carefully and cautiously,” finance minister Philip Hammond said on Thursday.

“I approved a round of quantitative easing back at the beginning of August as a response to the shock that the economy had felt, but we are conscious of the impacts that QE has and we will use it carefully and cautiously,” Hammond, who is currently in New York, said in a television interview with CNBC.

On Wednesday British Prime Minister Theresa May said low interest rates and quantitative easing have bad side-effects.

And Reuters:

British finance minister Philip Hammond said on Thursday that he would focus on increasing the country’s economic output by improving productivity, but that overall growth could slow as Britain barred most low-skilled European Union migrants.

“What we need to drive is a growth in GDP per capita. We need to see our economic expansion coming from an improvement in productivity, not simply from bringing ever larger numbers of low skilled people into the economy,” Hammond said in an interview with Bloomberg TV in New York.

Economic data earlier on Thursday showed British productivity continued to lag other countries after several years in which growth has been driven by a growing workforce, which includes higher numbers of EU migrants.

Hammond also said Britain’s government was looking at the costs and benefits of remaining in a customs union with the EU, as being outside would have “frictional costs” for manufacturers such as carmakers.

Here’s Bloomberg’s take on their interview with chancellor Philip Hammond:

The U.K. will use Brexit to build on historic trading relationships outside of the EU, Chancellor of the Exchequer Philip Hammond told Bloomberg TV in New York.

“We want to get the right Brexit for Britain,” Hammond told Bloomberg Editor-in-Chief John Micklethwait.

He described the U.K. as “mid-Atlantic in the way it does business,” and said capitalism faced problems across the developed world.

“We have a problem, not just a British problem but a developed world problem, in keeping our populations engaged and supportive of our market capitalism economic model,” Hammond said.

Hammond, who is on a visit to U.S. to meet Wall Street bosses and attend meetings of the International Monetary Fund, said he would make protecting London’s financial sector a priority for him.

“It will be one of the U.K. government’s objectives to ensure that parts of the financial services sectors that are Europe-facing are able to continue doing business in Europe.”

Updated

Philip Hammond may not want to disclose whether he thinks the value of sterling is too high or too low, but he might be pleased to know it has come off its lows of the day.

The pound is currently at $1.2646, down 0.8% on the day but above the new 31 year low of $1.2623 it reached earlier.

Hammond backs Carney

Question: Should Mark Carney (one of Britain’s best known foreign workers) stay on longer as Bank of England governor?

I think the governor is doing a good job. The bank is fulfilling its remit very effectively. It helped us recover from the financial crisis and helped us smooth the shock that came on 23rd June.

It is Mark Carney’s decision...I would welcome his decision to stay if that’s the decision he makes.

And there the interview ends.

Updated

Question: isn’t UK economy doing ok?

Media is focussing on backward data. UK economy was stronger than we thought.. but the concensus of forecasters is suggesting growth will slow as we go through period of negotiation until we have certainty over our position with EU.

Business investment is the key focus. Business postpones decisions if climate is uncertain. We want to bring back certainty as soon as we can.

Question: Investment outside London?

We have a productivity problem in UK, and one of drivers is regional disparity. We are hugely underinvested in transport links [in northern region].

We will continue to support Northern powerhouse and other regions.

On infrastructure, lot is done by private sector. In public sector, we have an opportunity to borrow cheaply and we have further capacity for targeted investments in productive infrastructure. But with our debt to GDP ratio we cannot have unrestrained programme of public spending.

After shock of Brexit decision there will be a period of uncertainty, we have to support the economy through that.

Question: Sterling gone down since Brexit. Does UK economy work at this level?

We don’t target exchange rate level. Market makes its judgement, and that can change quickly.

The market determines the appropriate level and we are committed to free floating exchange rate system.

UK government is pro-business - Hammond

Question: Theresa May seemed more critical of business than previous PMs. Is government anti-business?

Absolutely not. We are pro-business.

But we [Western economies} have a problem in keeping populations supportive of capital market model. People feel economy is not working for them, they are losers. We have to re-engage those people who feel they do not have a stake any more.

We have to address signs of a sizeable amount of people becoming disenchanted.

We have to deal with rogue operators. We have examples in UK of companies abusing market power, abusing workers. We have to deal with that.

PM said there is a limit to the power of government but doesn’t mean they have no power at all. They have to make sure markets work properly. Sending out strong message that best way to make people free and prosperous is to have a free liberal economy.

Updated

Question: is there any economic advantage to Brexit?

In the long term yes and outside the EU we will build on historic trading links. Our economy is more mid-Atlantic than Europe.

One reaction so far:

Question: EU will say you either get migration controls or single market. From conference it appears migration is more important.

Hammond: I don’t agree. There will be discussions and there will have to be give and take on both sides... if there is a solution that is advantageous to both sides. We don’t delude ourselves our European partners owe us any favours.

They still want access to UK market.

It has to be a win-win solution.

But we have to realise the Brexit vote said implicitly that we should not have freedom of movement in way we had in the past. That is about control, not saying people from Europe cannot come into the UK.

This is a negotiation, we both have our starting positions and will discuss it.

Updated

We have an economy heavily integrated with the EU after forty years.

One of things we have to do is analyse benefits and costs of being in a customs union.

Question: could we not have a longer transition period that 2 years?

No doubt the process of negotiation is something we will begin to discuss. The arrangements for UK’s exit, and arrangements for future relations.

No one thought Article 50 would be used, it does not answer a lot of the questions.

On passporting, allowing banks etc to trade across Europe:

There are different options, passporting, equivalents. It will be one of our objectives that financial services companies doing business in Europe can continue to do so.

Problem is not highly skilled workers coming to UK - Hammond

On the number of foreign workers being limited:

The problem is not highly skilled workers, banks, surgeons.. coming to the UK. The issue is people with low skills competing for entry level jobs.

Our economy is growing but GDP per capita is not. Have to drive that. We will need some low skilled people but our demographics are different to elsewhere in Europe. We have population still growing before immigration.

Updated

Financial services key part of economy - Hammond

Hammond’s interview is live, and begins with Brexit and the worries of financial firms about what it will mean for them.

He says we don’t recognise a distinction between hard and soft Brexit. It has to be the right Brexit for UK and EU.

On financial services, he says it is an important part of the UK economy.

We’ll place high priority on right solution.

There are some specific needs and issues we have to understand.

On euro clearing, he said ECB tried before to force clearing to take place within EU, and the court said it had no power to make such a rule.

When Britain leaves EU, there will be countries not in euro but in EU requiring protection of single market. So not clear ECB could require euro clearing to be moved.

Hammond
Hammond Photograph: Bloomberg TV

Updated

And after Theresa May’s comments seen as critical of the Bank of England, Hammond seems more positive on governor Mark Carney:

Philip Hammond’s interview should be available to watch here shortly.

Updated

And on the state of the UK economy following the Brexit vote:

And following the UK productivity figures earlier:

Updated

Interviewer John Micklethwait tackles Theresa May’s criticism of business in her Conservative party conference speech on Wednesday:

So Hammond is reinforcing the comments made by Theresa May over the weekend, which suggested immigration controls would take priority over remaining in the single market. (Those comments of course started this week’s slide in the pound.)

Earlier German chancellor Angela Merkel said that Europe’s four freedoms of movement – for labour, capital, services and goods – could not be split up.

If Europe didn’t stick to the position that full access to the internal market is conditioned on freedom of movement, Merkel said, each member state would start doing what it wanted.

Updated

UK chancellor Philip Hammond is speaking at Bloomberg and journalist Heidi Moore is tweeting the highlights:

And on whether euro-clearing activities would move out of the City of London after Brexit, he said:

Updated

IMF managing director Christine Lagarde has been giving her press conference ahead of the fund’s meeting in Washington. And in the wake of UK prime minister Theresa May calling for the benefits of globalisation to be shared by all, Lagarde said:

The value of British government debt is falling today, matching sterling’s selloff.

This has pushed up the interest rate, or yield, on 10-year gilts to 0.89%, from 0.82% yesterday.

That implies it would cost the government more to issue new debt.

America’s labour market continues to improve.

Just 249,000 US citizens filed new claims for unemployment benefit last week, down from 255,000.

That’s the lowest since April, and means the ‘four-week moving average’ of new claims has hit its lowest level in over 40 years;.

And that’s likely to help the US dollar strengthen, and mean more pain for the pound.

Updated

Over in Germany: Deutsche Bank has announced plans to cut 1,000 jobs in its domestic market, as part of a restructuring plan.

This takes the total of jobs being cut to 9,000, including 4,000 in Germany itself.

The restructuring is meant to cut Deutsche’s costs, and help it build up its capital reserves.

There’s still no word on the ongoing negotiations with the US authorities over a fine for mis-selling toxic mortgage-backed securities before the 2008 crisis.

Updated

Over in New York, traders are expecting Twitter’s shares to tumble when trading begins in one hour’s time.

Twitter’s shares are down 17% in pre-market trading, after the Recode website reported that Google is unlikely to bid for the social media platform.

The pound’s still falling... down a whole cent today at $1.2640.

Naeem Aslam, chief market analyst at Think Markets UK, reckons sterling is being hit hard by speculators who are determined to drive it lower.

He says further losses are a real possibility:

Bears are out for blood and they want to squeeze every single drop out of this trade. Although this is the most crowded trade on the street today, but it is not preventing them to keep piling up their bets.

My biggest worry is that short squeeze can happen soon as we are approaching towards an important level of support which is at $1.25. However, if the selling pressure remains this aggressive, we could easily break this support and we could be looking at the level of $1.22.

Pound hits another 31-year low

A wave of selling has just swept the pound down to a fresh 31-year low against the US dollar, just $1.2664.

That’s the weakest level since June 1985, and means sterling has lost more than three cents since Theresa May pledged to trigger article 50 by March 2017.

Here’s some chart action from the Financial Times’s Katie Martin:

Updated

El-Erian: I'd hate to be Hammond today

Mohamed El-Erian

Mohamed El-Erian, chief economic adviser to German investment giant Allianz, says Philip Hammond faces a very tricky mission today.

Speaking on Bloomberg TV, El-Erian says Hammond will have to justify Theresa May’s conference speech yesterday:

I would hate to be the chancellor right now. He has a hard job explaining what his prime minister just said.

Hammond has three tasks, El-Erian adds:

He has to explain the notion of hard Brexit, explain PM’s comments about the rootless international elite and the harm they create, and explain the criticism of the Bank of England.

Wall Street may find some of this surprising, El-Erian adds, given that (in his view) the UK has benefitted a lot from globalisation, and the government has benefitted from the Bank of England’s stimulus programme.

Without low interest rates and QE, May would be facing an economic mess, he concludes.

Updated

Sterling is coming under more pressure, falling by 0.6 of a cent to $1.2690, close to yesterday’s 31-year low.

Paresh Davdra, chief executive of foreign exchange firm RationalFX, says chancellor Hammond may get a sceptical reception from Wall Street bankers today:

Philip Hammond’s visit to Wall Street later today will see the Chancellor try to convince the US’s biggest banks that Britain is open for business. It comes weeks after the Prime Minister’s own talks with Wall Street bankers and is the latest in a series of international visits from UK ministers in an attempt to allay fears over Brexit and drum up support for new trade. Although previously met with scepticism due to the uncertainty surrounding the UK’s exit from the EU, Hammond’s visit will be the first since the likelihood of a ‘hard’ Brexit by early 2017 was confirmed.

The Chancellor is expected to tell Wall Street that the UK is still a financial hub for global business. The challenge he will face will be in reassuring banks that the UK is indeed still a safe-bet investment in a week that has seen the pound plunge to a new three decade low against the dollar on the prospect of ‘hard’ Brexit and businesses within the City of London warn that it could cost the city £38 billion. Whilst a timetable for Brexit makes Hammond’s job easier in some respects, it remains to be seen if Wall Street can be convinced by him.”

The pound has dropped by 0.25% today but is still clinging onto the $1.27 level.

That’s above yesterday’s 31-year low, despite worries about a hard Brexit.

Theresa May’s broadside at ultra-low interest rates appears to be propping up sterling.

The pound vs the US dollar since 1980
The pound vs the US dollar since 1980 Photograph: Thomson Reuters

Over in Greece, the unemployment rate has dropped to a four-year low, but remains far too high.

The Greek jobless rate dipped to 23.2% in July from 23.4% in June – the lowest since March 2012, but more than double the eurozone average after years of austerity.

Updated

The skyline of Canary Wharf.

The pound continues to bob around the $1.273 mark, as traders wait for news of Philip Hammond’s meetings in New York.

That’s about half a cent above the 31-year low struck on Wednesday.

Angela Merkel’s comments about freedom of movement being intrinsic to the EU haven’t eased concerns about a ‘hard Brexit’.

And Theresa May’s attacks on the wealthy ‘global elite’ have also left City investors feeling vulnerable.

Chris Turner, the head of currency strategy at ING, explains:

May has pushed her party way across the centre ground – taking issue with self-serving individuals and businesses and appealing to the non-metropolitan voter.

That does not bode well for financial services in Brexit discussions.

(Thanks to Reuters for the quote)

Updated

Merkel: Brexit negotiations won't be easy

Newsflash from Berlin: the German chancellor Angela Merkel is telling industry leaders that Brexit is a “watershed moment” for the EU.

Merkel also says negotiations won’t be easy and will determine what access each side has to the other’s market. Talks cannot start until Britain triggers article 50, she says.

The chancellor also warns that Europe’s four freedoms of movement – for labour, capital, services and goods – can’t be split up.

If Europe doesn’t stick to the position that full access to the internal market is conditioned on freedom of movement, Merkel says, each member state will start doing what it wants.

Earlier today, Germany reported that factory orders jumped by 1%, thanks to a surge of domestic orders. This suggests that Europe’s largest economy isn’t being dragged back by Brexit fears (yet, anyway).

Updated

City traders are speculating about how long Mark Carney will remain as Bank of England governor, after Theresa May attacked the Bank’s loose monetary policy stance yesterday.

Carney is expected to decide by the end of 2016 whether to do five years at the Bank (the original plan), or sign up for an extra three years. He arrived in July 2013.

May’s criticism could, perhaps, encourage Carney to exit gracefully in 2018 after all. Or he might decide that London remains the place to be, as the Brexit story plays out.

May surprised the City by telling the Conservative party conference that ultra-low interest rates and quantitative easing had disproportionately helped the rich.

Charalambos Pissouros, a senior analyst at IronFX Global, told Reuters that this could signal a change of approach to monetary policy:

In our view, this suggests that once (BoE chief) MarkCarney’s term is finished at the BoE, he may be replaced by someone more hawkish on policy.

One of the prime minister’s advisers has hinted that the government is considering using the fiscal levers of spending and borrowing to generate growth.

George Freeman told Newsnight:

We have to think about, with money available at nought percent (how to) ... drive an industrial strategy, get infrastructure built. We need to make sure we are looking at all the mechanisms to making sure that money flows properly.

Updated

Analyst: on the road to a sterling crisis

Fears that the City will lose its EU ‘passporting rights’ have undermined the pound since June’s referendum.

Britain is already running a sizeable current account deficit of about 6% of GDP, due to the persistent gap between imports and exports.

So if London financial companies are locked out of the EU, Britain will suffer a fall in ‘invisible earnings’. That could be compounded by a drop in physical exports, depending on the trade terms that Britain agrees with the rest of the world.

Desmond Lachman, a resident fellow at the American Enterprise Institute, fears that the current account deficit will get even worse, pushing the pound down. He writes:

There appear to be at least two reasons to believe that market fears about the consequences of a hard Brexit for continued large capital flows to the UK are not misplaced. The first is that, were the UK no longer to have ready access to Europe’s single market for its exports, it would lose its attractiveness as a location for foreign companies’ European investments. This was precisely the point that the Japanese government made at the September G20 meeting in China – when it publicly warned its UK counterparts of the likelihood that Japanese companies would relocate out of the UK in the event of a hard Brexit.

The second reason is that a hard Brexit would almost certainly result in the loss of the ‘financial passport’ that City of London financial institutions currently enjoy for accessing the European market. A Financial Conduct Authority report in September suggested that as many as 5,500 UK financial firms could be affected by such a loss of passport rights. Major international banks including JP Morgan Chase and Goldman Sachs have warned that, if the City loses its financial passport, they will need to conduct at least part of their European operations from outside the UK.

A key point that those in favour of a hard Brexit overlook is that a rapid drying up of foreign capital flows to the UK would have dire consequences for domestic living standards. A further currency dip would raise import costs and increase inflation. Moreover, there is a likelihood that domestic economic policy would need to be tightened – both to contain inflation and to make room for a large narrowing in the external current account deficit that foreigners would no longer be prepared to finance. UK households would be forced to reduce their consumption levels painfully, while businesses would be forced to cut back on their investment plans, to the detriment of future UK growth prospects.

More here.

Updated

HSBC has knocked up a handy chart showing some of the possible relationships that Britain could have with the EU (and what it is giving up):

Updated

Philip Hammond needs to reassure Wall Street that London still wants to be a major financial centre, says the currency expert Kit Juckes of Société Générale.

He’s concerned that the pound hasn’t managed even a small rally this week, even though the latest economic data has been quite encouraging:

The FX market, for one, needs a lot of reassurance. Sterling really ought to have managed some sort of short-covering rally in the last day or two, as the market slowly gives up all hope of a further rate cut in 2016.

From here, in the absence of new news and with the major (depressing from the currency’s point of view) speeches from the Conservative party conference behind us, the fall in the pound versus the US dollar will probably be slow. But steady ...

Updated

Politics, eh?

Weak pound hits easyJet's profits

An asyJet passenger plane.

Ouch! Shares in easyJet have fallen by 6% in early trading, and the Brexit vote is party to blame.

The budget airline has told shareholders that it expects pre-tax profit to fall by about 28% this year, due to the slump in the pound, recent terror attacks and industrial action.

My colleague Angela Monaghan has the details:

The British airline said currency movements would cost the company £90m in the full year, largely because of the the sharp fall in the value of the pound since the Brexit vote on 23 June.

EasyJet reports in pounds, but mosts of its costs are in dollars and euros. It buys fuel in dollars and pays air traffic costs and landing charges on its many European routes in euros.

Updated

The Wall Street Journal has a grim chart this morning showing how the pound is close to its weakest level (when measured against a basket of currencies):

Updated

London’s stock market has opened without drama, with the FTSE 100 index gaining 10 points to 7,041. That’s about 63 points below its record closing level.

Bank shares are among the risers, after officials from the International Monetary Fund tried to downplay worries about Deutsche Bank’s financial health yesterday.

Updated

Hammond to meet with Wall Street bankers today

Philip Hammond and his wife, Susan Williams-Walker
Philip Hammond and his wife, Susan Williams-Walker, arrive on day four of the Conservative conference. Photograph: Carl Court/Getty Images

The chancellor, Philip Hammond, is scrambling to New York today in an attempt to reassure America’s biggest banks about Brexit.

He is due to meet with Wall Street powerbrokers (the kind of elite savaged by Theresa May yesterday).

He will say London plans to keep its position as the world’s leading financial centre once the break from the EU is complete.

Hammond will arrive hot from the Tory conference and is expected to say:

One of Britain’s great strengths is the ability to offer and aggregate all the services the global financial services industry needs. This has not changed as a result of the EU referendum and I will do everything I can to ensure the City of London retains its position as the world’s leading international financial centre.

Whether it’s British employers or US firms who support thousands of highly skilled jobs in the financial sector, we are listening and taking the time to understand the issues thoroughly, in advance of opening negotiations with the EU.

We will continue to welcome the best and brightest talent and organisations from around the world, including the US. While the government has not finalised its future approach to our relations with the EU, the government’s position is clear; we want the best deal for trade in UK goods and services, including our world leading financial services industry.”

He’ll be meeting with top executives from Citi, BNY Mellon, Morgan Stanley, Goldman Sachs and others with operations in the City.

A report this week warned that a ‘hard Brexit’ could wipe out 70,000 jobs and cost £10bn in tax receipts. That’s the worst-case scenario, if City firms lose their passporting rights, which let them sell services across the EU.

Wall Street executives will want to hear that their concerns are taken seriously, following Theresa May’s attack on “citizens of the world” yesterday. They could also press Hammond on the idea that UK-based companies should provide a list of any foreigners on their books ...

Updated

The agenda: Brexit fears weigh on the pound

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

Concerns over Britain’s exit from the EU continue to weigh on sterling this morning.

The pound has sidled back to the $1.271 mark in early trading, close to the 31-year lows plugged yesterday.

Against the euro, sterling is close to a five-year low at €1.135. This week’s tumbles have already forced Britain to surrender the title of fifth-largest economy (in local currency terms) to France.

Yesterday, the prime minister, Theresa May, promised to build a “global Britain” after Brexit, telling the British public: “Come with me and we’ll write that brighter future.”

But is the UK going to lose its prized membership of the single market, in return for immigration controls?

Analysts at PNC Bank explain why this is a worry:

May’s position substantially increases the possibility that the UK will give up its right to export financial and other services to EU markets in exchange for control over immigration – a “hard Brexit”.

The UK’s exports of services to the EU account for more than 4% of the UK’s GDP, so trade barriers to them would cause a serious negative shock to the British economy.

Also coming up today....

Global policymakers are gathered in Washington for the International Monetary Fund’s annual meeting.

World investors are pondering whether America’s central bank might raise interest rates in November, following strong service sector data yesterday.

They’re also wondering whether the European Central Bank could start to “taper” its bond-buying programme soon.

In the City, budget airline easyJet, defence firm BAE Systems and furniture group DFS are reporting results.

On the economic front, Germany has just reported a 1% jump in factory orders (more on that shortly). And at 1.30pm, we get the latest US weekly unemployment figures. That will set the scene for tomorrow’s monthly jobs report.

We’ll be tracking all the main events through the day ...

Updated

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