UK national income pushed +0.5% higher in the last quarter of 2017. The figure was slightly better than expected but still leaves UK annual growth at its lowest clip for five years. Something for both pessimists and optimists to clash on.
Either way, UK growth remains substantially behind most other first world economies and is certainly the slowest of all the G7 economies. The GDP data saw the pound spot rate drift to 1.4162 having hit more than 1.426 earlier.
Some excitement from Japan: remarks by central bank boss Haruhiko Kuroda that his country was nearing the bank’s 2% inflation goal saw the yen lift higher – coming close to its strongest level for 16 weeks – with the dollar fetching as little as 108.60 of the Japanese currency.
In Davos Bank of England governor Mark Carney made clear any rise in interest rates would depend closely on Brexit progress. Carney also gave Chancellor Philip Hammond some back-handed support, saying the UK economy would benefit from a “deeper” relationship with the EU.
The FTSE 100 was up almost 50 points tonight at 7,665.54 with Next shares getting a +3% boost while Mediclinic Int saw a similar swing though listing in the opposite direction.
- UK FTSE 100 7,665 +0.65%
- DAX 13,334.09 +0.27%
- CAC 40 5,531.95 +0.93%
- Euro Stoxx 600 400.51 +0.49%
- Dow 26,071.72 +0.34%
- S&P 500 2,853.54 +0.50%
- Nasdaq 7,457.50 +0.61%
- Nikkei 225 23,816.33 +0.03%
- Gold 1,355.40 -0.92%
- Oil WTI 65.77 +0.38%
US growth misses a beat
While much of the US attention was in Davos today, on home turf economic growth lurched somewhat: most economists had been expecting a +3% rate climb for Q4. But a rise in imports helped slow the annualised rate of US economic growth to +2.6%.
The glitch didn’t stop President Trump expounding on US growth prospects meanwhile in Davos. The momentum appears with him, still; most US economy watchers appear to be holding onto a +3% growth performance figure for the full year.
The US is still absorbing the numbers from the Trump tax code revamp; some claim US workers – particularly blue collar ones – will see a substantial pay rise. But some of the pay rises will be one-off and many workers, particularly in unregulated industries, may be lucky to see any rise at all.
BNP Paribas admits to currency rigging
BNP Paribas is to pay a $90m fine for conspiring to rig foreign currency markets. The bank admitted to the price-fixing for several African and Middle Eastern countries between 2011 and 2013. "BNP Paribas USA deeply regrets the past misconduct that led to this settlement, which was a clear breach of the high standards on which it operates," the bank said in a statement.
Last week HSBC agreed to a $101m fine for rigged currency moves. HSBC says it will improve compliance; HSBC has been in trouble with the authorities over currency practices before. Last November HSBC was ordered to pay €300m to French authorities for tax evasion practices.