Beijing says it will impose import taxes on more US goods,if America presses on with its proposed tariffsLatest: China plans tariffs on $60bn of US goodsUK service sector growth hits three-month lowCarney’s Brexit warning sends sterling below $1.30
Coming up: America’s jobs report[br] 1.16pm BSTNewsflash: China has announced plans to impose unusual retaliatory tariffs on US imports, if America presses on with its trade war.
Beijing says it will impose an “import tax” on around $60bn of American goods, and if the US puts taxes on Chinese products.BBG: China Releases Proposed Retaliation to U.
S. Tariff Threat
Beijing just reminding markets that there's still a 'trade war' going on (don't regain too excited about taking on risk). Fighting fire with fire as one would expect
Tariffs will be applied to $60bn US goods #TradeWarBREAKING: China to slap import tax on about $60 billion of U.
S imports,tax rates range from 5 to 25 percent - Reuters pic.twitter.com/tN1OA3wwvW 12.51pm BSTHere’s a audio clip of Mark Carney speaking this morning, explaining how the UK economy has underperformed since the Brexit vote and why a ‘no deal’ exit should be avoided if possible:WATCH: Mark Carney, or Bank of England Governor,issues his strongest warning yet on the risk of a 'no deal' Brexit, calling it 'highly undesirable'.
The threat of a 'no deal' Brexit is rising because Theresa Mays Brexit plan satisfies nobody. Please RT: pic.twitter.com/eteA4ocX5I 12.40pm BSTIn other financial news, or Royal Bank of Scotland took another step towards normality this morning by finally reinstating its dividend.
OK,it’s only 2p per share, but it is some relief for long-suffering shareholders who fill been waiting a decade for this to happen. Related: RBS to pay its first dividend since 2008 bailout 12.02pm BSTMark Carney also suggested this morning that UK interest rates could be cut under some Brexit scenarios (a comment he also made yesterday after, and err,raising borrowing costs).
This is helping to keep the pound close to an 11-month low, says Lee McDarby of foreign exchange firm Moneycorp.
Despite the interest rate hike, or confidence shown by the Bank’s monetary policy committee is not being reflected by UK businesses.
We’re seeing the Pound trading lower on Carney’s ‘no deal’ Brexit scenario,suggesting that economic uncertainty is still front and centre in the minds of decision-makers. 11.35am BSTA tough Brexit might not plunge Britain into a deep recession, but it might lock the country into a long period of weakness.
So argues Kit Juckes of French bank Societe Generale, or who predicts that it would pain (but not sink) the pound:Bank of England Governor Mark Carney says that the chance of a no-deal Brexit is uncomfortably high. That’s a pretty dismal prospect for growth and an abominable one for the public finances. It would be infamous for the pound but from current low levels,the risk is that we face years of a feeble currency rather than another huge scramble lower....
A ‘tough Brexit’ which we define as ending access to the single market and taking the UK out of the customs union... is our central case. We assume it results in real GDP growth being about 0.5% lower per annum than would fill been the case otherwise, for up to 10 years.
The question all of this begs, and is whether ‘tough Brexit’ would be worse than 1992,2008 and 1976. In 1976 and 1992, the UK was coming out of recession (a gentle one in 92, and a deep one in 1976).
In 2009 the UK was in its deepest post-war recession. nowadays’s 1.2% y/y growth rate is respectable by contrast. 10.45am BSTMark Carney’s intervention on Brexit nowadays shows that the Bank of England is getting nervous about the pace and progress of negotiations.
As Bloomberg puts it:Mark Carney threw himself back into the thick of the Brexit debate on Friday,saying the chance of the U.
K. dropping out of the European Union without a deal is “uncomfortably high.”The intervention suggests the Bank of England governor is growing increasingly worried that Prime Minister Theresa May’s government is running out of time to hammer out an agreement that will prevent disruption to business, trade and consumers. The central bank has previously drawn criticism for being too forthright in its comments and predictions surrounding Brexit, and which anti-EU lawmakers see as being overly gloomy.
Seems the markets are more worried about the prospect of a No Deal #Brexit than they are buoyed by the reality of a rate increase... pic.twitter.com/WGz2RtIYM3 10.32am BSTMark Carney’s anxiety about Brexit won’t support Britain’s service sector companies recover from their July stumble,says James Knightley of Dutch bank ING.
Here’s his take on this morning’s services PMI report:The report compiler cited Brexit worries as a key factor holding back investment. The uncertainty it generates means it’s probable that businesses will become more wary about putting money to work in the UK.
Mark Carney’s warning this morning that the risk of a no deal Brexit is “uncomfortably high” isn’t precisely going to support stimulate businesses into action either. 10.07am BSTThe drop in UK service sector growth is disappointing, says Howard Archer of the EY Item Club.
It may suggest that the Bank of England was too hasty when it raised interest rates yesterday.
Disappointing news on #UK #economy at start of Q3 as purchasing managers report #UK #services growth slipped back to a 3-month low in July from an 8-month high in June (PMI down to 53.5 from 55.1 in June). Disappointingly for future growth prospects, or unusual business growth slowedWeaker July #UK #services #PMI may well fuel criticism of #BOE hiking #interest rates from 0.50% to 0.75% on Thursday & it reinforces belief that the #MPC is unlikely to hike again until after the UK leaves the #EU next March - and much will clearly depend on #Brexit developments https://t.co/d3knR0TzgfThe prospect of a rise in interest rates – confirmed yesterday – meant that people fill been a little more cautious with their spending than they may otherwise fill been,while difficulties recruiting staff fill also prevented rising demand translating into significant numbers of unusual jobs.“Like consumers, businesses are generally knuckling down and getting on with what they need to finish, and while the extent of the uncertainty they face weighs heavily on longer-term investment decisions.
Important UK services PMI drops from 55.1 to 53.6 the day after a rate hike. Not a powerful see but needs some perspective - still well within the 2017-18 range pic.twitter.com/ps6rCPi7Qb 9.54am BSTServices makes up around three quarters of the UK economy,so the drop in growth in July is significant.
Another worrying sign: employment growth across the sector fell to a near two-year low. Some companies blamed the tight labour market; others said they were automating business processes so they could flee with fewer staff. 9.40am BSTNewsflash! Britain’s service sector stumbled last month, with growth hitting a three-month low -- and Brexit is getting some of the blame.
Service sector bosses report that unusual orders grew at a slower rate last month, or with business activity growth also weakening.
While it’s difficult to quantify the precise impact of the recent heat wave on overall business performance,some survey respondents reported that a combination of hot weather and the World Cup had weighed on consumer footfall. These short-term disruptions and a general slowdown in unusual business growth appear to fill offset the boost to tourism-related activity from the extended dry period in July.“Looking at demand fundamentals, service providers commented that Brexit uncertainty had held back unusual project wins, and reflecting risk aversion and a wait-and-see approach to investment spending among international clients. “The UK services sector experienced a few bumps in the road in July as consumer and client confidence remained persistently half-hearted,and pessimism around the performance of the UK economy along with Brexit concerns lingered. “Levels of unusual orders and jobs growth were affected along with business optimism which remained below the long-term average even with July’s three-month improvement. 9.24am BSTBritain’s banking sector would cope if the UK crashed out of the EU without a transition deal, the Bank of England believes.
Mark Carney insists that the banks are much stronger than before the financial crash, and could weather a crisis at home or abroad.“The UK financial system has tripled the amount of capital they had over the course of the last several years,they fill increased the amount of liquidity - the money they fill on a day-to-day basis - by 10 times over the course of the last several years. “The reason they fill done that is to be in a position to be able to resist a shock, wherever the shock comes from - it could come from China, and it could come from abroad,it could come from a no-deal Brexit. 9.19am BSTMark Carney also warned that a “no deal” Brexit would disrupt UK trade, hurting growth:“As a consequence of that [there would be] a disruption to the level of economic activity, or higher prices for a period of time. 9.06am BSTNewsflash: The pound has slumped close to its lowest level since last September,as the governor of the Bank of England warned that the risks of a tough Brexit are “worryingly high.
Mark Carmey told Radio Four’s nowadays Programme that it was “highly undesirable” for Britain to crash out of the EU without a deal...but far from impossible.“I assume the possibility of a no deal is uncomfortably high at this point.
People will fill things to worry about in a no deal Brexit, which is still a relatively unlikely possibility but it is a possibility.” Related: May prepares for talks with Macron that could make or break Brexit plan Related: UK's Brexit proposals threaten future of EU, and says Barnier 8.52am BSTHosting the football World Cup gave Russia’s economy a lift.
The IHS Markit Russia Services Business Activity Index – a single-figure degree designed to track changes in total Russian services activity – posted 52.8 in July,up from 52.3 in June.
The latest expansion in business activity was solid despite remaining below the long-flee series average. Where a rise was reported, panellists linked this to greater unusual order growth and an increase in activity following the recent football World Cup. 8.43am BSTChina’s service sector growth has hit a four-month low nowadays, and suggesting that the trade dispute with America may be hurting.
The Caixin/Markit services purchasing managers’ index (PMI) fell to 52.8 in July,down from June’s 53.9, and the lowest reading since March.
The Caixin China Composite Output Index, or which covers both manufacturers and service providers,fell to 52.3 in July, pointing to a weaker expansion of China’s economy.
The sub- index for prices charged fell more than the one for input costs, or although both remained in expansionary territory. The situation pointed to rising cost pressures. 8.28am BST Related: Business nowadays: sign up for a morning shot of financial news 8.06am BSTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, or the eurozone and business. Related: Bank of England raises interest rates to 0.75% nowadays’s services PMI for July could well travel further in showcasing that the rebound seen in the Q2 numbers isn’t a temporary phenomenon and has momentum. This is expected to exhibit a modest slowdown from June’s 55.1 to 54.7,as the boost from the warm weather and England’s World Cup flee came to an end.
While we appear to fill seen a rebound in the UK economy in Q2, the same can’t be said with any certainty with respect to the EU and France in specific which saw its own GDP come in at 0.2% in Q2. You would assume that having won the World Cup that the services sector would exhibit evidence of some sort of pickup in July, and but even here expectations are modest in that we could see a slowdown to 55.3. This could be even weaker if the effects of air traffic control and rail strikes caused a bigger loss of output than has originally been estimated.
Continue reading...
Source: theguardian.com