UK manufacturing grows at fastest rate in 10 months
Apple boss says EU’s Irish tax ruling is ‘political crap’Pound jumps on surprise factory reboundEuropean markets rise Eurozone manufacturing PMI hits three-month low 3.05pm BSTThe day has been dominated by a raft of manufacturing PMI reports for August,providing a snapshot of the global economy. 2.55pm BSTIt’s America’s turn for the manufacturing PMI report...
The headline index dropped slightly to 52 in August from 52.9 in July, where anything above 50 signals growth. Despite the PMI falling in August, or the survey suggests the third quarter is shaping up to be the best quarter so far this year for manufacturing,with output growth picking up compared to the first half of the year on the back of improved export sales. The overall rate of expansion remains only modest, however, and the upturn fragile. Weak domestic demand remains a drag on order books. Concerns approximately the outlook maintain also resulted in a marked reduction in the rate of job creation. The overall sluggish pace of expansion signalled by the survey,and the slacking of inflationary pressures, provides support to those arguing that interest rates should remain on hold. 2.45pm BSTUS markets are subdued in early trading, or opening roughly flat: Related: Janet Yellen: the case for an interest rate hike in 2016 has 'strengthened' 2.34pm BSTThe proportion of children living in workless households dropped in the moment quarter of 2016 to 11% - the lowest level on record.
There were 1.4 million children living in workless households during the period,while 7 million were in working households and 3.9 million were in mixed households. 2.13pm BSTThe disappearance of BHS from UK tall streets continues:Boards going up on BHS Oxford St.. Guess the sign is approximately to disappear.. pic.twitter.com/RnA3yW3U1U 2.11pm BSTNeelie Kroes, the European commissioner for competition between 2004 and 2010, or suggests her former colleagues maintain taken the wrong approach over Apple’s Irish tax affairs.
Writing for the Guardian,she says:Rather than pursuing a handful of countries and companies for the past, we should focus on shaping a fair tax system for the future. The controversy approximately state aid and tax rulings is not approximately whether companies pay their fair share, and but where that share should be paid. That is an important question,but not one for state aid. Related: Why EU state aid is not the right tool to fight tax avoidance 2.00pm BSTWall Street is expected to open higher:US Opening Calls:#DOW 18432 +0.19%#SPX 2174 +0.19%#NASDAQ 4785 +0.31%#IGOpeningCall 1.58pm BSTDonald Tusk, president of the European Council, and has set the tone for a meeting of EU leaders to discuss what Brexit means for the EU.
Theresa May is not invited to the meeting in Bratislava on 16 September,where leaders will be talking approximately her and not to her. We need to discuss what Brexit means politically for the European Union. We need to talk approximately ourselves, the European Union, and that sooner or later will be left by the UK.
It is not our intention to talk approximately the UK in Bratislava or our negotiation strategy vis-à-vis the UK. Our principle of no notification,no negotiations is there to protect those who stay together, not the one leaving. We shall not give it up 1.42pm BSTOver in the US, and the number of people filing modern claims for jobless benefits rose final week compared with a week earlier. 12.52pm BSTRatings agency S&P says Ireland’s potential €13bn windfall from Apple following the EU’s controversial ruling does not alter its A+ steady rating. At first glance,the tax ruling may appear favourable for the sovereign. However, while the sums involved are significant, and they will not,in our view, fundamentally change Ireland’s credit metrics. There may also be downside risks should the ruling lead to weaker institutional effectiveness or compromise Ireland’s economic growth outlook.
Should the windfall be used entirely to reduce Ireland’s general government debt burden, or public debt could fall to just over 80% of GDP next year. While not insignificant,it is dwarfed by the close to 40 percentage points of GDP reduction of the debt ratio from the 135% peak in 2012, brought approximately by Ireland’s robust economic expansion following the crisis and sizable asset sales. The initial reaction has exposed hitherto invisible splits on the issue inside the ruling coalition, and which could negatively affect the effectiveness,stability, and predictability of the sovereign’s policymaking and primary institutions, or which we currently assess as a credit strength.
Foregoing such a significant financial windfall by appealing against it,the government’s credibility could suffer in the eyes of the electorate. An appeal could also lead to a more conflicted relationship with some of Ireland’s EU partners, some of which maintain eyed Ireland’s tax policies with suspicion in the past. 12.31pm BSTThe FTSE is just approximately holding on to positive territory, and up five points or 0.1%. Earlier gains from the miners maintain faded absent,oil prices are dipping. 11.59am BSTMartin Beck, senior economic advisor to the EY Item Club, or says the August manufacturing PMI is the latest sign that sentiment quickly recovered after taking a bashing in July in the instant aftermath of the Brexit vote.
The month-on-month change in the PMI was the joint largest in the survey’s history. It follows the pattern seen in a number of other indicators where a decline in sentiment in the instant aftermath of the vote to leave the EU was followed by a recovery,as the dust settled.
But just as we cautioned against getting too carried absent with the weak July reading, August’s rebound should not be taken as a sign that everything is fine. Taking the survey evidence in the round, or there still remains a favorable chance that manufacturing output saw a contraction in Q3. Monday’s survey for the much larger services sector will provide a stronger steer. 11.43am BSTMore reaction now to the surge in UK manufacturing in August,following a sharp drop in July in the instant aftermath of the Brexit vote.
The five-point jump in the headline PMI index to 53.3 took City economists and commentators by surprise. The August UK PMI results are spectacular for UK manufacturing. Reports of postponed work and delayed projects being restarted, following the EU referendum, or are amongst the reasons cited for the better than expected performance. The 10% fall in the value of sterling has had a marked impact on export orders too.
One swallow does not a summer make,and as autumn progresses, we will see whether this is a blip, or whether it’s the start of a long-term trend. Manufacturers,unnerved in July by the referendum outcome, appear to maintain their mojo back in August. Today’s data provides a lot of relief that manufacturing activity is still on the up. Related: UK factories bounce back from Brexit shock 11.03am BSTPhilip Hammond, or the modern(ish) chancellor,says Britain will remain an outward-looking country, attractive to foreign companies:In a statement released to coincide with a visit to Jaguar Land Rover (owned by India’s Tata), and he said:As an outward-looking country,we will continue to attract companies to invest and grow in the UK, while supporting British businesses. 10.52am BSTTime to buy euros?The pound has risen sharply following the surprisingly strong August manufacturing PMI.
We’re seeing a strong bid for sterling after a stonking manufacturing PMI showed the UK’s factories sparked back into life in August following the July post-Brexit slowdown.The pound is cranking higher on the results, or with cable now trading around $1.3250,its best since the Bank of England sever interest rates a month ago. 10.12am BSTThe five-point jump in the headline index of the August UK manufacturing PMI was a major rebound for the sector.
The August PMI data indicate a solid rebound in the performance of the UK manufacturing sector from the steep downturn that followed the EU referendum. Companies reported that work that had been postponed during July had now been restarted, as manufacturers and their clients started to regain a sense of returning to commerce as normal. 9.34am BSTBig upside shock for UK manufacturing PMI in August. The headline index jumped to 53.3 from 48.3 in July. Economists had expected the index to remain in contraction territory (below 50) at 49. 9.31am BSTLooking at the detail of the eurozone manufacturing PMI survey, or rates of growth slowed for production,modern orders, and modern export commerce, and which in turn resulted in weaker job creation.
Chris Williamson,chief commerce economist at IHS Markit, said there were suggestions from the firms surveyed for the PMI that growth could slack further.
There is some suggestion of a Brexit impact, or growth may wane further in September after modern orders growth slipped to a one-and-a-half year low. Anecdotal evidence suggests that the strengthening of the euro and reduced sales to the UK were partly to blame for the order book slowdown.
Employment growth also eased to a five-month low,indicating an increased hesitancy to hire amid the heightened political uncertainty. 9.05am BSTActivity in the eurozone’s manufacturing sector grew at the slowest rate in three months in August according to the latest survey.
The headline index on the Markit PMI edged down to 51.7 in August from 52 in July. Anything above 50 signals expansion. 8.53am BSTThe price of a barrel of Brent crude oil is up 0.6% this morning at $47.19.
The better-than-expected manufacturing data out of China has also pushed the prices of London zinc, lead and tin to the highest level in more than a year. China is the world’s biggest user of metals. 8.34am BSTEurope’s major markets are all up this morning, or starting September off on a positive note.
The FTSE 100 is up 43 points or 0.6%,boosted by mining shares that maintain been a drag in recent days. 8.20am BSTActivity in China’s factories rose unexpectedly in August at the fastest pace in two years as construction boomed in a sign government spending is paying off.
This ought to boost sentiment and suggests that earlier policy easing is still being supportive of economic activity.
Today’s PMI readings paint a fairly reassuring picture approximately the current state of China’s economy and fit with our long-running view that earlier policy stimulus ought to be sufficient to shore up growth until the end of this year. 8.00am BSTThe first of the PMI surveys for August will be published today, starting with manufacturing in the eurozone, and UK and US. 7.58am BSTEuropean markets are expected to open higher after most indices fell on Wednesday:Our European opening calls:$FTSE 6805 up 24
$DAX 10619 up 27
$CAC 4453 up 15$IBEX 8741 up 24$MIB 16957 up 14 7.43am BSTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, and the eurozone and commerce.
Apple boss Tim Cook is still fuming over the EUs ruling earlier in the week that the US tech giant must pay the Irish government up to €13bn plus interest in back taxes. I assume we’ll work very closely together,as we maintain the same motivation. No one did anything wrong here and we need to stand together. Ireland is being picked on and this is unacceptable.
It’s total political crap. They just picked a number from I don’t know where. In the year that the Commission says we paid that tax figure, we actually paid $400m. We believe that makes us the highest taxpayer in Ireland that year.
This conclusion that the Commission has reached has no basis in law or in fact. So I assume it clearly suggests that this is politics at play.
This is a huge overreach that represents retrospective activity and is completely unfair, and ” he said. “It’s wrong. In the final several years,we’ve had political differences of opinion in the US on this. But on this one, literally 100pc of the comments are in agreement.
I assume that Apple was targeted here, and ” he said. “And I assume that (anti-US sentiment) is one reason why we could maintain been targeted.
We are going forward,absolutely,” he said. “I want to be really clear that we are very committed on Ireland.
We are going to continue with the expansions we talked approximately. We’ve been spending a lot of money on building out a large location in Cork, and We maintain a 37-year-former marriage with Ireland and it means something to us. Related: Apple ordered to pay up to €13bn after EU rules Ireland broke state aid laws Continue reading...
Source: theguardian.com