Mark Carney hints on rate retreat

Sterling fell -0.65% earlier as Bank of England governor Mark Carney fudged a rate hike commitment in the near future. Carney was speaking to MPs before the Treasury Select Committee.  He said a rate rise now “isn’t consistent” with longer term economy and inflation goals. Sterling was also knocked back by remarks from the OECD which claimed UK growth prospects would be boosted if Brexit was reversed.

The OECD zeroed in on the risk of falling UK investment and the price pressures – not helped by this morning’s +3% inflation confirmation from the ONS – that Brexit may bring. 

A short time before 4pm sterling was trading at $1.3167 while the euro was down -0.47% at $1.1753. The dollar took strength from more Wall Street bullishness – the Dow hit an intraday 23,000 higher earlier – not to mention weaker business sentiment from Germany.

At close of business the FTSE 100 was down 10 points at 7,516 with Pearson climbing more than +7% while ConvaTec shares recovered slightly,  up almost +4%, from Monday's massive crash. Investors failed to be impressed by Merlin Entertainment's tie-up with Peppa Pig – its shares were down almost -16%.

• UK FTSE 100 7,516.1 -0.14%
• Dow 22,981.28 +0.10%
• S&P 500 2,556.09 -0.06%
• Nasdaq 6,619.35 -0.07%
• Nikkei 225 21,336.12 +0.38%
• DAX 13,025.21 +0.17%
• CAC 40 5,374.66 +0.22%
• Gold 1,287.60 -1.18%
• Oil WTI 52.11 +0.46%

OECD downbeat on UK productivity & prospects

The OECD’s latest survey is pretty dismissive on UK prospects at points. “Over a quarter of workers in the United Kingdom have only low skills, which holds back labour productivity and job quality. Raising skills is a priority given plans to reduce net migration,” it said. 

About 45% of UK exports “are destined for EU27 countries,” it added, “and are greatly facilitated by EU membership, which implies participation in both the EU single market and customs union.” Clearly Brexit anxiety continues to run deep. 

UK price pressures for many remains relentless: Shutterstock

“The pound in your pocket is depreciating,” admitted Laith Khalaf, senior analyst, Hargreaves Lansdown, “as the rising price of goods continues to chip away at its value. Consumer spending remains remarkably resilient in the face of inflationary pressures and weak wage growth, but the current squeeze on household budgets is a slow burner, as it takes some time for economic reality to hit home.”

Unite gives Airbus-Bombardier union cautious approval

Earlier Unite welcomed Bombardier’s move to link hands with Airbus which means Airbus has a major stake in Bombardier’s C-Series aircraft. It also means the plane can be built in the US, thereby niftily swerving punishing 300% tariffs. 

“This news gives us cause to have some hope," Unite said, "but we are far from out of the woods and there is still much work to do to secure Bombardier jobs in Northern Ireland and the rest of the UK.”

“The deal could take a year or so to get through the relevant competition authorities while Boeing in the US is unlikely to sit idly by. During this period there is a danger that tariffs will be imposed and the C-series will be effectively locked out of aviation’s largest market."

Breaking news: The Evening Standard is reporting that Turkish billionaire Murat Ülker is considering buying Newcastle United Football Club. Ülker though faces competition from the Chinese. Owner Mike Ashley put the club up for sale yesterday.