US retail sales fell more than expected in August amid weak purchases of cars and a range of other goods, pointing to cooling domestic demand that further reduces expectations of a Federal Reserve interest rate increase next week.

The Commerce Department said retail sales fell 0.3% after edging up 0.1% in July. Sales were up 1.9% from a year ago. Excluding cars, gasoline, building materials and food services, retail sales slipped 0.1% last month after a similar drop in July.

The World at One
BBC Radio 4

A former government advisor is warning there are still security concerns with the construction deal agreed to build a nuclear power station at Hinkley Point. Dr Paul Dorfman, from University College London, says there are still "very clear problems" with the Chinese companies involved. 

They included accusations from the US that one of them has been involved in nuclear spying, he added. 

The World at One
BBC Radio 4

George Osborne "vetoed" some of the safeguards now being imposed on the Hinkley Point nuclear deal, says a former cabinet minister.Ed Davey, the former energy secretary, told the World at One that "George Osborne was so keen to send positive signals to the Chinese that he was prepared not to go the extra mile for national security".

US stocks opened slightly higher, helped by Apple's jump on reports that some of its newest iPhones have sold out even before they are due to arrive at stores. Apple shares rose 2.3%, its fourth straight increase, as reports continue to point to strong demand for the new iPhone 7, which are due to arrive in stores Friday.

US data was mixed, with August retail sales falling 0.3% from the July level. The producer price index was unchanged from July. About 15 minutes into trading the Dow Jones stood at 18,059.56, up 0.1%. The S&P 500 rose 0.1% to 2,127.57, and the tech-rich Nasdaq advanced 0.3% to 5,187.63. 

House of Commons
Parliament

Shadow energy minister Barry Gardiner says that his party supports "this important project" which "must now go forward without any interruption or delay".

The prime minister's decision to review the contract to build the Somerset reactor in July -  amid concerns about the costs and the potential security impact of Chinese involvement - not only risked the £18bn project's future but "rocked confidence in investors".

He calls the new safeguards are "just window dressing to make it appear that the government intervention achieved something".

The government "already has such powers prevent the sale of any element of the UK's critical infrastructure", he tells MPs.

House of Commons
Parliament

Business Minister Greg Clark announces that following the review of Hinkley Point the government have "made two important changes".

Under the first, the government will be able to prevent the sale of EDF’s controlling stake in Hinkley point prior to the completion of construction.

The government have also set up a "new legal framework for future foreign investment in British critical infrastructure".

After Hinkley, the British government will take a special share in all future nuclear new build projects which "will ensure that significant stakes cannot be sold without the government’s knowledge or consent".

The Office for Nuclear Regulation will be directed to require notice from developers or operators of nuclear sites of any change of ownership or part-ownership. 

This will "allow the government to advise or direct the ONR to take action to protect national security as a result of a change in ownership".

These changes bring the UK into "line with other major economies" and will ensure that "future foreign investment always works in the UK's best interest".

US factory production fell last month amid cutbacks in appliances, home electronics and machinery. The Federal Reserve says factory production dropped 0.4% in August, following two months of gains. 

A broader measure of industrial output, which includes mines and utilities, also dropped 0.4%. Manufacturers have struggled for the past 18 months with sluggish global growth, the strong dollar, and reluctance among US businesses to spend more on large machinery and equipment.

Chris Johnston
Business reporter

Image source, Getty Images

Another day, another IPO on the London stock exchange. After Pure Gym yesterday, rubbish merchants - sorry, the UK's second-largest "waste management services provider" - Biffa says it will do the same, external to raise a hefty £270m.

Chief executive Ian Wakelin says these are "exciting times" for Biffa: "The group has a 100-year history at the forefront of the industry providing collection, processing and disposal of waste and recyclables. We believe there are multiple levers for continued organic growth."

House of Commons
Parliament

Former Conservative candidate for London mayor, Zac Goldsmith, asks if Hinkley will have "generated the most expensive energy in the history of energy generation?"

Business secrerary Greg Clark replies that securing a reliable source of energy for 60 years is a "good investment in the stability of our energy supply". 

He then quotes Sir Winston Churchill that "diversity and diversity alone is the key".

BBC Monitoring
News from around the globe

Image source, Reuters

The French financial daily La Tribune is running a piece headlined "Hinkley Point: the British government says yes, but…"

The paper quotes the French Secretary of State for Industry, Christophe Sirugue, as saying "We are very pleased. Of course, this affirms French excellence in the field of nuclear energy... This validates the French government's commitment to the overhaul of nuclear power and gives credibility both to our expertise and to our excellent relations with the British. And, ultimately, it's about 4,500 jobs [in France]".

Image source, Getty Images

Tom Greatrex, who's the chief executive of the Nuclear Industry Association, says the new government was right to mull over the Hinkley project. 

Its approval will make the five other nuclear plants being planned in the UK cheaper and easier to develop.

"What is important is that they have taken the opportunity to check, because there were members of the government - new prime minister, a new chancellor, a new energy secretary - who weren't as involved in this previously," Mr Greatrex tells the BBC.

"This is just the first. There needs to be more than this in the future, if we're going to be, ensure that we have that supply."

Image source, Reuters

On the markets, the FTSE 100 is trading slightly higher at 6,692 points as shares in supermarkets boost the blue chip index. 

Morrisons shares are up 8% after it said profits and sales grew in the first half of the year. Like a chain of shopping trolleys, it's pulled Tesco and Sainsbury shares higher too.

Next shares are down 5% after warning the High Street is "challenging", which sent M&S shares falling too.

Meanwhile, the pound was little moved after the Bank of England kept interest rates at 0.25%. Sterling is down slightly against the dollar and euro at $1.32 and €1.17.

Kamal Ahmed
Economics editor

In one sentence the Bank has revealed it is ready to upgrade its growth forecasts for the UK economy.  

Those who predicted the possibility of a recession following a vote to leave the European Union - which included the governor of the Bank of England - are having to revise their positions.

The UK economy has performed more robustly than many expected.

Consumer confidence has bounced back, and today's strong retail sales figures reveal that the positive figures of July were largely repeated in August.

Second, inflation has remained subdued, although upward price pressure in the economy is increasing as import costs rise due to the fall in the value of sterling.

The housing market is "less negative than expected" according to the Monetary Policy Committee of Bank economists, and business surveys of activity from organisations such as the CBI have also "picked up a little".

Employment rates remain at record levels.

And the Bank's own interest rate cut has added to economic confidence.

House of Commons
Parliament

SNP energy spokesman Callum McCaig says he is disappointed that the government has taken the "gamble with Hinkley". 

The deal "remains a rotten one" as it will cost the tax payer £30bn, for an £18bn project.

While the "risk of building remains with the investor", the project will "still make a profit at the expense of the bill payer" despite being 25% over budget and four years late, he argues.

House of Commons
Parliament

We're into some back-and-forth now between the government and Labour. 

Business secretary Greg Clark points out that "despite his intervention" Labour's Barry Gardiner had publicly supported the Prime Minister's review on Hinkley.

When the announcement was made on 29 July, Mr Gardiner told the BBC: "I'm hoping what they'll do is take two to three months to seriously review it", Mr Clark tells MPs.

"So much for the suggestion he wouldn't support the review in the first place."

Image source, Parliament TV

Labour has strongly criticised the government for the delay to the Hinkley decision and for the new safeguards it claims to have agreed.

The nuclear project must now go forward "without any further interruption", Labour's shadow energy minister Barry Gardiner told MPs.

"The government created a commercial crisis, sent shockwaves through the industry and unions alike, a diplomatic dispute with one of our key trading partners and in the end all they've done is pretend to give themselves powers which they already possessed," he said. 

"This statement is window dressing. It is face saving from a government that talked big and eventually backed down with a whimper."

Image source, Parliament TV

Business Secretary Greg Clark is in parliament telling MPs about the new deal for Hinkley Point. He says it enables the government to intervene if it has any concerns about the safety of any part of the reactor and its construction. 

"It was right the new government should take time to consider all components of the deal," he says, referring to Prime Minister Theresa May's delay in July. 

The new deal strikes the "right balance between foreign investment and national interest", he adds.

Image source, AFP

Away from Hinkley, the Bank of England has reassessed the health of the UK economy and believes it will grow more than previously thought.

The Bank "now expects less of a slowing in UK GDP growth in the second half of 2016", it said.

Governor Mark Carney and his team now expect growth in the third quarter, July to September, to be between 0.2% and 0.3%. They've also left interest rates unchanged at 0.25%.

BBC economics correspondent Andrew Verity tweets...

China General Nuclear Power Company (CGN) is backing the Hinkley Point project and plans to build its own nuclear power stations in Bradwell in Essex and Sizewell in Suffolk.