Get all your news in one place.
100's of premium titles.
One app.
Start reading
The Guardian - UK
The Guardian - UK
Business
Graeme Wearden (until 2.30pm) and Nick Fletcher

Bank of England policymaker warns that consumer slowdown will 'intensify' - as it happened

The City Of London Skyline.
The City Of London Skyline. Photograph: Alamy Stock Photo

Mixed day for European markets

Wall Street may be bouncing higher in the wake of better than expected jobs data, but the picture was more mixed in Europe. US investors shrugged off concerns about President Trump’s meeting with his Chinese counterpart Xi Jinping, while the ADP employment data suggested a better than expected outcome from Friday’s non-farm payroll numbers. In the UK, the FTSE 100 moved ahead but the German and French markets fell back. The final scores showed:

  • The FTSE 100 finished up 9.86 points or 0.13% at 7331.68
  • Germany’s Dax dipped 0.53% to 12,217.54
  • France’s Cac closed down 0.18% at 5091.85
  • Italy’s FTSE MIB edged 0.02% lower to 20,253.37
  • Spain’s Ibex ended 0.4% higher at 10,402.7
  • In Greece, the Athens market added 0.53% to 669.97

On Wall Street, the Dow Jones Industrial Average is currently up 152 points or 0.74%.

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

UK interest rates could start to rise in the second quarter of next year despite continuing uncertainty over the outlook for the country’s economy, says Jonathan Loynes at Capital Economics:

Market expectations for the future path of UK interest rates have continued to nudge lower in recent days in response to evidence that the economy’s growth rate has slowed a bit in the first quarter and some dovish noises from policymakers...The implied timing of the first 25bp hike in rates – derived from overnight indexed swaps (OIS) – has shifted back from late 2018 earlier in the month to the middle of 2019. This has pushed 10-year gilt yields down to six-month lows of just above 1%.

As MPC member Gertjan Vlieghe stressed on Wednesday, there certainly are some good reasons for the MPC to tread cautiously. While the economy has proved resilient to the vote for Brexit, the outlook is very uncertain and there are signs that growth has started to slow as higher inflation pinches households’ spending power. Meanwhile there are few signs as yet that the inflationary effects of the post-referendum drop in the pound are feeding through into broader price pressures. There is also a danger that a premature policy tightening would push the pound sharply higher and hence halt the rebalancing of the economy towards the external sector.

Bank of England
Bank of England Photograph: Toby Melville/Reuters

But we think the markets have gone too far in pushing rate hikes out beyond next year. After all, the current unprecedentedly loose policy stance was initiated to prevent the 2008 recession from turning into a 1930s style depression and enhanced to mitigate the expected damage from of the vote for Brexit. Yet with depression risks having long receded, there is a strong case for scaling back the emergency stimulus. This case will become clearer if, as we expect, the economy continues to confound the worst fears of the impact of Brexit.

Accordingly, our central forecast is now for Bank Rate to start to rise in the second quarter of next year and then climb to about 1.25% by the end of 2019. ..This would be an earlier and rather faster rise than the markets and most forecasters are anticipating. We would stress that such a path for interest rates would primarily reflect a fairly healthy economy rather than serious inflation worries. Nonetheless, it is likely to put at least some upward pressure on gilt yields. We forecast the 10-year yield to rise to 1.5% by the end of this year and to 2.5% by the end of next year.

US crude stocks in surprise increase

US crude stocks unexpectedly rose last week, taking some of the shine off oil prices.

Crude inventories rose by 1.6m barrels to 535.5m, according to the Energy Information Administration, compared to expectations of a 100,000 decline. Brent, which had been as high at $55 a barrel earlier, lost some of its gains and is currently at $54.32, still up 0.28% on the day.

Updated

In the current US market resurgence, the Nasdaq Composite has just hit a new record high of 5929, two days after the previous one.

Despite the slightly disappointing service sector figures, Wall Street has continued its positive mood, with the Dow Jones Industrial Average now up around 180 points. Connor Campbell, financial analyst at Spreadex, said:

Mixed signals from the US economy couldn’t prevent the Dow Jones from finally bursting back into life this afternoon.

Having been trapped between 20600 and 20700 for the past fortnight the Dow awoke from its slumber in style this Wednesday, rising 180 points to hit its highest level since the first Trump healthcare doubts entered the market on March 21. It helped that the dollar was fairly quiet after the bell; though it took 0.6% off the Japanese yen, it made minimal headway against the euro and lost 0.3% against sterling.

The thrust of the Dow’s gains seemed to stem from the ADP non-farm reading, which vastly outperformed expectations at 263k against the 184k (February’s figure, on the other hand, was revised from an extraordinary 298k to a more reasonable 245k). To maintain its gains the US index did have to ignore some concerning services PMIs, however; the Markit reading slipped to 52.8 from the initial 52.9 estimate, while the ISM figure plunged to a 5 month low of 55.2.

And here is more detail on what the ISM respondents have been saying:

  • “Growth on [a] number of projects has slowed a little, but revenue projections are steady.” (Construction)
  • “The details of the revisions to the Obamacare program are of great interest to us. There is a large amount of future uncertainty with what will happen. Meanwhile, the business continues.” (Finance & Insurance)
  • “Health care changes can affect our business. Uncertainty is making us hold on many projects.” (Health Care & Social Assistance)
  • “Market conditions are still favorable with animal proteins due to [the] strong dollar, low exports and [an] abundant supply. Unknown [are] the POTUS’ policies going forward on trade and immigration. Worker shortages have become a real problem in food production and produce growing areas.” (Accommodation & Food Services)
  • “Business is picking up. Service labor is tight. New legislation has had significant impact.” (Public Administration)
  • “Overall, business conditions are favorable, and the outlook is positive.” (Retail Trade)
  • “Continued optimism regarding the domestic business environment.” (Management of Companies & Support Services)
  • “First quarter has been brisk, and March has been as busy as I [have] ever seen, with many new endeavors.” (Utilities)

Despite the ISM figures coming in shy of expectations, they still show an economy heading in the right direction (any reading above 50 indicates expansion). The Institute said:

The majority of respondents’ comments indicate a positive outlook on business conditions and the overall economy. There were several comments about the uncertainty of future government policies on health care, trade and immigration, and the potential impact on business.

The other US services survey has also fallen short of expectations.

The Institute for Supply Management’s non-manufacturing PMI came in at 55.2 in March, below forecasts of 57 and down on the 57.6 figure in February. This is the lowest level since October last year.

Updated

And here is the first US service sector report, and it is slightly disappointing.

Markit’s final service sector PMI index for March came in at 52.8, down from an initial estimate of 52.9 and the 53.8 recorded in February.

The Markit composite index of services and manufacturing was 53 compared to the early reading of 53.2 and February’s 54.1.

Updated

Wall Street opens sharply higher

Ahead of two separate snapshots of the US service sector and following better than expected jobs numbers, American stock markets are heading higher.

The Dow Jones Industrial Average is up 88 points or 0.43% while the S&P 500 opened 0.33% higher and the Nasdaq Composite added 0.23%. US markets had been undermined recently by concerns that President Trump’s proposed tax and spending reforms could be stymied in the wake of his healthcare defeat.

On the jobs data, which comes ahead of Friday’s non-farm payroll numbers, David Morrison, senior market strategist at Spreadco, said:

ADP came in at 263,000 – miles above the 180,000 expected. The ADP number isn’t a good predictor of the actual non-farm payroll number. However, it can give a “heads-up” for a big surprise, up or down. So today’s reading suggests we should get a strong reading on Friday.

Despite a long run of strong jobs numbers there are some concerns that US economic growth isn’t as robust as it should be. Survey data such as Consumer Confidence, ISM Manufacturing and Non-Manufacturing PMIs may be robust, but “hard data” (with the exception of employment numbers) like Durable Goods, Retail Sales, Construction Spending, Vehicle Sales and Factory Orders have all disappointed recently. This is happening as the Fed proceeds to tighten monetary policy and even hints of starting to wind down its balance sheet later this year.

BoE rate-setter: Consumer slowdown will intensify

Gertjan Vlieghe

One of the Bank of England’s interest rate-setters has warned that the consumer slowdown in the UK will ‘intensify’ this year.

Dr Gertjan Vlieghe, a member of the Monetary Policy Committee, told an audience in the City that subdued wage growth, and the inflationary impact of the weaker pound, will hit household budgets.

Vlieghe says:

The consumer slowdown, which initially did not materialise, now appears to be underway. Given the hit to real income from a mix of subdued wage growth and rising inflation, I think the slowdown is more likely to intensify than fade away.

That fits with this morning’s report on the service sector, which showed that companies dependent on consumer spending, such as hotels and gyms, were lagging behind the rest of the sector.

He also produced this graph, showing how retail sales have weakened in recent months:

UK household consumption and retail sales

And this graph, showing how real wages (in red) are expected to hit almost zero as inflation erodes incomes.

Household comsp

Vlieghe also fears that business investment, which has been stronger than feared since the Brexit vote, could fall as Britain’s exit from the EU approaches.

He argues:

It is possible that the absence of a sharp reaction was due to the fact that firms have generally taken a benign view of the impact on their business of possible future changes in the UK-EU relationship. It is also possible that uncertainty about these changes is substantial, but the changes have been too far away to have a marked effect spending decisions so far.

As the time horizon now shortens, a more material reaction of spending in response to uncertainty might still occur. Much will depend on the detail of the final agreement, which might not be known until late in the negotiations.

The full speech (which also compares economist forecasting to a doctor trying to predict a heart attack) is online here:

Good policy vs accurate forecasts

Updated

Greek PM calls for emergency summit if bailout talks fail

European Council President Tusk and Greek PM Tsipras exit the Maximos Mansion after a meeting in Athens today
European Council President Tusk and Greek PM Tsipras leaving the Maximos Mansion after a meeting in Athens today Photograph: Michalis Karagiannis/Reuters

There are important developments in Greece today too, as European Council president Donald Tusk visits Athens.

Prime minister Alexis Tsipras has upped the ante, calling for an emergency meeting of EU leaders if tortuous negotiations over the country’s bailout programme do not end soon.

From Athens, our correspondent Helena Smith reports:

Exploiting the opportunity of a visit by European council president Donald Tusk to Athens, the Greek leader said EU leaders should meet later this month if euro area finance ministers failed to agree on the country’s economic progress on Friday.

Ratcheting up the rhetoric, Tsipras said political leaders might have to wade in to stop what he described as “endless” negotiations with international creditors over Greece’s latest compliance review.

“I think the initiative will have to be taken at the higher level to have a positive outcome before Easter, in any case, within April, even if this means calling a euro area summit,” he told reporters after holding talks with Tusk.

“But this endless negotiation must come to an end.”

The review is key to Greece being given further bailout funds to repay €7.5bn in maturing debt in July - or confront the prospect of default and euro exit.

Tsipras made the remarks as negotiations between Athens and creditors hit fresh snags in Brussels late Tuesday where the Greek finance minister Euclid Tsakalotos had flown to try and break the deadlock before Friday’s euro group.

The leftist-led government, facing criticism for failing to conclude the review – but also mounting pressure on the street – is at odds over demands for further pension cuts, tax hikes and labour market reforms.

Tsipras claimed that every time Greece was close to an agreement its lenders would call for further measures, adding:

“Some people are trying to hurt our recovery and bring a negative scenario back to the table for Greece and Europe during a sensitive time,”

Greek Prime Minister Alexis Tsipras, right, listens to European Council President Donald Tusk during their meeting at Maximos Mansion
Alexis Tsipras (right) listening to Donald Tusk today Photograph: ZUMA W/REX/Shutterstock

Athens had placed great hopes in Tusk’s visit. Attempting to sound a note of optimism, the former Polish prime minister insisted it was expedient the impasse was broken when the euro group convenes on Friday in Malta.

“Our finance ministers should do the work to achieve an agreement,” said Tusk who played a prominent role in bringing the country back from the brink when it came closest yet to exiting the euro in mid-2015.

He added:

“This is the only positive result for Greece and for the whole [EU] community.

“There is no political and substantial alternative.

Updated

US jobs report beats forecasts

Newsflash: America’s companies created many more jobs than expected last month.

The monthly ADP report shows that the US private sector created 263,000 new jobs in March, more more than the 185,000 which Wall Street expected.

It’s another signal that the US labour market is strong, and could indicate that Friday’s Non-Farm Payroll report will beat expectations.

However.... ADP have also revised down their figures from February, from 298,000 to 245,000.

And here’s economics editor Larry Elliott on today’s UK productivity figures:

Here’s our news story about March’s record-breaking UK car sales figures:

An employee installs a wiring loom into a Mini car at the BMW Mini car production plant in Oxford.
An employee installs a wiring loom into a Mini car at the BMW Mini car production plant in Oxford. Photograph: Geoff Caddick/AFP/Getty Images

We have more car news....but this time, it’s about strike action not rising sales.

British workers at BMW are to hold eight strikes over the next few weeks to oppose plans by the carmaker to close their final salary pensions, and move workers onto a less generous package.

It will begin in April 19 with a walkout at BMW’s Mini plant in Oxford, its engine facility near Birmingham, and a factory in Swindon.

Unite general secretary Len McCluskey says:

“BMW’s refusal to talk about affordable options to keep the pension scheme open means a sizable chunk of its UK workforce will be taking strike action for the first time in the coming weeks.

“Bosses in the UK and BMW’s headquarters in Munich cannot feign surprise that it’s come to this point. Unite has repeatedly warned of the anger their insistence to railroad through the pension scheme’s closure would generate and the resulting industrial action.

Updated

Uk productivity picks up

In other news, UK productivity has crept higher, but is still much lower than in other G7 countries.

New figures from the Office for National Statistics show that economic output per hour rose by 0.4% in October-December, up from 0.2% in July-September. It’s a sign that the economy was more productive at the end of 2016.

However, productivity has still failed to recover from the financial crisis, if you compare recent figures to the trend before 2008.

UK productivity

The ONS also reports that wages grew faster than productivity in the quarter -- something that might make the Bank of England worry.

UK service sector: What the experts say

Jeremy Cook, chief economist at the international payments company, World First, fears that the UK economy is entering choppier water.

Here’s his take on today’s service sector report:

“While the headline index number may have rebounded from a 5 month low in February, there is little to be enamoured with in this reading of the UK’s most important sector; consumers are under pressure, services sector companies that cater to them are weaker and margins are likely being pressured further.

Average prices are at the highest level in 8.5 years and whilst some consumer resilience is allowing some of this to be passed on in higher prices on the shelves we have to think that that consumer resilience will give way before the business need to keep prices raised does. In the short term, this means a turning of the screw for the man in the street and a poor outlook for High St profits. This sector makes up the majority of the UK economy and the prognosis is poor.”

Neil Wilson of ETX Capital is concerned that consumer-focused companies lagged behind in March:

Activity rose to its best level in three months and was a very strong rebound from the five-month low of February.

Prices are rising – largely due to input inflation – while job creation has slowed a little. Financial services was most resilient sector while consumer-oriented sectors struggled – evidence that chimes with data suggesting consumers might be about to pull back on some discretionary spending as inflation squeezes incomes. Inflation is overtaking wages and that means one thing – lower aggregate demand.

Kallum Pickering of Berenberg bank agrees with Markit’s prediction that UK growth slowed to 0.4% in the last quarter (and even provides a graph to back it up)

The key point is that the UK continues to enjoy a broad based expansion in output, and we strongly expect it to continue.

PMI vs GDP
PMI (in red) vs actual GDP (in blue) Photograph: Berenberg

Howard Archer of IHS Global Insight also fears a slowdown this year, as rising inflation hurts consumers.

Services activity has been particularly led by the consumer-facing sectors. Looking ahead, we suspect that consumer services activity will be increasingly pressurized by consumers’ purchasing power weakening over the coming months as inflation rises appreciably and earnings growth is muted.

This is likely to cause some consumers to cut back on their discretionary spending, including on services.

Markit: Hotels and gyms struggle, but City is booming

‘Services’ is a broad measure, covering around four-fifths of the UK economy.

And today’s report shows that consumer-focused sectors had a tough March, while the City powered on.

Markit says:

Within the service sector, the worst performance so far this year has been seen in consumer- oriented sectors, notably hotels and restaurants, as well as personal consumer services (which include businesses such as sports centres, gyms and hairdressers). The greatest resilience has been seen in financial services.

Economists Rupert Seggins has helpfully tweeted more details of the PMI reports:

undefined

Pound rallies after service sector PMI

The news that Britain’s service sector grew faster than expected in March has boosted the pound.

Sterling jumped by half a cent against the US dollar to $1.248, as traders welcomed the pick-up in activity in Britain’s dominant sector.

The pound vs the US

Paul Sirani, chief market analyst at Xtrade, says:

“Today’s services PMI figure has bucked the trend of weak data seen on Monday and Tuesday, paving the way for the pound to make its long-awaited recovery.

“Despite underwhelming manufacturing and construction data, the services sector is a key component of the UK economy and today’s number is very encouraging.”

Updated

Despite beating forecasts, March’s UK PMI report does include some worrying signs.

For starters, UK service sector firms created fewer new jobs than in February, with new hiring hitting its slowest pace since August 2016.

Markit says this left some firms struggling to get their work done.

A combination of rising workloads and softer employment growth contributed to a renewed accumulation of backlogs across the service economy. Some firms noted that squeezed margins and rising wage bills had led to the non- replacement of voluntary leavers.

Secondly, firms hiked their prices at their fastest pace in eight and a half-years.

This was overwhelmingly linked to higher input costs during recent months. Survey respondents also noted that resilient demand had provided scope to pass on some of their increased costs to clients

UK service sector growth picks up

Breaking: Britain’s service sector has posted its strongest growth of the year, after suffering a slowdown over the winter.

Data firm IHS Markit reports that business activity growth hit a three-month high in March, driven by a pick-up in new work.

Bosses interviewed for the survey said they are optimistic about prospects over the next year --almost half forecast growth while only one-in-nine expect a fall in activity.

Some companies said that “Brexit-related uncertainty” was holding back investment decisions. But on the upside, some firms are seeing more demand from abroad thanks to the weak pound.

This drove the Services PMI up from 53.3 to 55.0 - the highest reading since December 2016.

The PMI has now been over 50 points (the level between expansion and contraction) for eight months.

Services PMI

Encouraging stuff. But Markit also predicts that the wider UK economy has probably slowed in the last quarter.

Chris Williamson, Chief Business Economist at IHS Markit, explains:

“The survey data indicate that UK business activity growth regained some momentum after having slipped to a five-month low in February, but the upturn fails to change the picture of an economy that slowed in the first quarter.

“The relative weakness of the PMI survey data compared to that seen at the turn of the year suggests the economy will have grown by 0.4% in the first quarter, markedly lower than the 0.7% expansion seen in the fourth quarter of last year.

“Much of the disappointment in growth so far this year has been evident in consumer-oriented sectors, in part linked to spending and incomes being squeezed by higher prices.

UK car sales hit record levels

Wow! Britain’s car market has just enjoyed its strongest month ever.

Car registrations surged by 8.4% year-on-year in March, to 562,337, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).

That smashes all records going back to the 1976, beating the previous record in August 1997.

UK car sales

The blowout figures were partly driven by a rush to buy cars before vehicle tax changes kicked in this month. This new Vehicle Excise Duty regime pushes up the annual tax bill for more expensive cars, and those which emit more CO2 than average.

Mike Hawes, SMMT Chief Executive, explains:

This bumper performance probably means we will see a slowdown in April, exacerbated by the fact there are fewer selling days this year given Easter timing. Looking ahead to the rest of the year, we still expect the market to cool only slightly given broader political uncertainties as there are still attractive deals on offer.”

As usual, Ford cars were the most popular:

SMMT

Bloomberg’s Maxime Sbaihi flags up how the eurozone had a good quarter:

Eurozone PMI shows growth a six-year high

Boom! The eurozone’s private sector has posted its best quarter since the start of the financial crisis.

Data firm Markit reports that Eurozone output and new order growth accelerated to near six-year records in March.

That drove its service sector PMI up to 56.0, up from 55.5, and the ‘composite PMI’ (which also includes manufacturing data) up to 56.4.

Eurozone PMI

The report found that:

  • March saw the strongest inflows of new business into the eurozone economy since April 2011.
  • Employment growth was the sharpest in over nine- and-a-half years.
  • Price pressures remained strong in March. Input cost inflation was close to February’s 69-month record, reflecting rising global commodity prices and the historically weak euro exchange rate.
  • Business optimism rose to a fresh series-record high, improving at service providers and remaining relatively elevated at manufacturers too.

Markit’s Chris Williamson says the report signals an “impressive” rate of economic growth:

“This is a broad-based upturn among the euro’s largest members, with 0.6% growth signalled for both Germany and France, while Spain looks set to have enjoyed 0.8-0.9% growth in the first quarter, according to the PMI data. Growth has also perked up in Italy during the first quarter despite a slight pull-back in March, with the surveys indicating a 0.3-0.4% expansion.

“Most welcome for a region still suffering near- double digit unemployment is a rise in the survey’s employment index to its highest for almost a decade, suggesting we should expect to see the jobless rate fall further in coming months.

Updated

Another good month for Germany:

We have good news from France; its private sector has posted its fastest growth in 70 months.

Italy’s services sector has slowed a little, with its PMI dipping to 52.9, from 54.1

European markets are muted this morning, as investors digest the news that North Korea fired a ballistic missile into the Sea of Japan overnight.

That missile test appears to be a defiant signal from Pyongyang ahead of the US-China summit later this week, where North Korea will be high on the agenda.

Naeem Aslam of Think Markets says:

Keeping the peace in Asia is just another item on the agenda which will be important for both leaders to talk about.

North Korea tested another missile last night and this has increased tensions over in Asia. This will also add another dimension to President Trump and President Xi’s meeting. The US Secretary of State, Rex Tillerson, has already made the US’ position clear by signalling that the US will not tolerate such activities.

So the FTSE 100 has climbed by 20-odd points, but other European markets are down a little.

European stock markets this morning
European stock markets this morning Photograph: Thomson Reuters

Spanish services sector growth beats forecasts

Spain Flag

Zing! The second first healthcheck on the eurozone has arrived, and it’s a belter.

The Spanish service sector PMI has beaten expectations by hitting 57.4, close to February’s 18-month high of 57.7.

Spanish firms reported a rise in new orders, and better market conditions. This encouraged them to take on more staff, which is great news given Spain’s persistent unemployment problem.

Spanish PMI data

But many companies also said they hiked prices, passing on higher costs to customers.

Markit says:

In response to rising input costs, companies increased their output prices. Moreover, the rate of charge inflation accelerated to the fastest since July 2007. Four of the six monitored sectors saw output prices rise, led by Post & Telecommunications. The Financial Services and Hotels & Restaurants categories were the only two to post declines.

Updated

Swedish Flag
Swedish Flag

March was a very kind month for the Swedish economy.

The Swedish service sector PMI has bounded up to 61.3, from 59.8 -- a rather high reading, and well into expansion territory.

That follows very solid manufacturing figures on Monday, which showed the fastest growth in seven years.

Updated

Ireland Flag

Ireland’s service sector has recorded another strong month, although growth did slow slightly.

The Irish Services PMI has dipped to 59.1 in March from 60.6 in February. That’s the weakest reading of 2017, but still showing a solid expansion.

Investec, which compiles the survey, says:

The increase was recorded amid greater volumes of new work and reports of an improved economic environment.

Irish services PMI

Japan's services sector growth hits 19-month high

National flag of Japan.CYM4GH National flag of Japan.

Overnight, we’ve learned that Japan’s service sector grew at its fastest pace in 19 months in March.

The Japanese services PMI rose to 52.9, up from 51.3, helped by a rise in business confidence.

That suggests that the country’s economy strengthened last month, says Paul Smith, senior economist at IHS Markit:

Growth is broad-based. Both the manufacturing and service sectors are enjoying upturns, supported by firm demand for goods and services.

With capacity pressures subsequently intensifying, this is having a positive spillover into the labour market. Jobs continued to be added at a solid pace in March.

The agenda: Service sector reports

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

Britain’s service sector makes up almost 80% of the economy, from financial firms in the City of London to restaurants and tourist attractions around the country.

So today’s healthcheck on the service sector should give a good insight into how the economy fared last month.

The Service sector PMI, produced by data firm Markit, lands at 9.30am GMT - and it expected to show steady growth last month.

City economists predict that the PMI will increase from 53.5, from 53.3 in February -- meaning growth accelerated at a faster rate last month. That would be a good sign for economic growth in the first three months of 2017.

But after weaker-than-expected figures from manufacturing and construction companies this week, a disappointing reading can’t be ruled out.

Markit are also publishing service sector reports from across the eurozone this morning. That’s likely to show a solid rise in activity in March, as the eurozone recovery continues.

But RBC Capital warns:

We expect some weakening in the March services PMIs for Spain and Italy today.

Also coming up today

Gertjan Vlieghe, one of the Bank of England policymakers who set interest rates, is giving a speech at 1.30pm BST.

Vlieghe is one of the more dovish members of the Monetary Policy Committee, so investors will be listening out for any comments on interest rates.

Investors are getting edgier about the summit meeting between presidents Trump and Xi later this week.

The Chinese premier is in Helsinki today, on a trip to build closer economic and political ties with Finland; we might get some comments from Xi on the importance of free trade (an issue he highlighted at Davos back in January).

Former Finnish prime minister Alex Stubb is tweeting about the visit:

On the economics calendar, we get the latest UK car sales figures at 9am BST.

Then at 1.15pm BST the latest US ADP employment figures are released, showing how many new jobs were created by American companies last month. That will set the scene for Friday’s non-farm payroll report (the wider measure of US employment).

European stock markets are expected to open a little higher.

Updated

Sign up to read this article
Read news from 100's of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
“I laughed my head off! Like, ‘Oh my God, what have we spawned?’” Keith Richards shares his response to the Sunset Strip shredders of the 1980s
Richards never had any interest in becoming a lead player – and the early innovators of the shred movement did not change his mind
Guitar World
Guitar World
“A few years ago, I decided, ‘I'm just going to play trumpet every day, no matter what. And after a couple of years of doing it, I'm going to make a record’”: Flea covers Frank Ocean and explains why he’s scratching a long-standing itch on his new album
Watch him doing double duty on trumpet and bass in the company of Jimmy Fallon
MusicRadar
MusicRadar
Anna Kendrick And Kieran Culkin’s Reactions To An Interviewer’s Michael Cera Comment Are Going Viral Again
“I think the interview is projecting his own insecurities here.”
Bored Panda
Bored Panda
Nicki Minaj Sued Over $275K Unpaid Concert Production Costs — Firm Claims Bills Ignored for Years
Nicki Minaj is embroiled in a legal battle as a production company claims she owes over $275,000 for concert production costs. The lawsuit highlights financial risks in the entertainment industry.
International Business Times UK
International Business Times UK
Age Of Attraction Could Become My Love Is Blind Replacement, But It Needs To Fix Some Things
I can see a future but with many changes.
Cinemablend
Cinemablend
Weird Al Just Unexpectedly (And Brutally) Trolled The Rock’s Live Action Moana Wig
Ouch!
Cinemablend
Cinemablend
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.
Download on the AppStore Get it on Google Play