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Big electrical items are likely to become more expensive after Christmas because of the weaker pound, says Claer Barrett, personal finance editor at the Financial Times.

Retailers have protection in place against currency fluctuations - known as "hedges" - but many of them start to run out around Christmas time, she tells BBC Breakfast

That means imports will become more expensive, leading to higher prices and the possibility that the January sales might not be as generous as previous years.

She suggests shoppers might want to snap up household appliances and even cars before prices go up.

Shares in Innogy - the healthy assets of struggling power group RWE - began trading at €37.30 in Frankfurt. 

That's above the issue price of €36 in what is Germany's biggest listing in 16 years. 

Innogy now has a market capitalisation of more than €20bn. 

Jane Foley, head of FX strategy at Rabobank, explains the causes of this week's big slide in sterling and how it could lead to inflation next year that will "take money out of our pockets". 

The FT's Nathalie Thomas tweets:

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Jeremy Cook, chief economist at World First, says some analysts are predicting that sterling could go as low as $1.15. His own prediction is it will bottom out at $1.22. 

The sharp drop overnight looks like it was the "by product of a computer glitch", he tells the BBC. 

But factors like the US presidential election and further news on a so-called hard Brexit - where the UK leaves the EU single market - could trigger fresh falls, he says.

The FTSE 100 is 0.6% higher at the open, up 40 points at 7,039.

The 250 index is up 0.2% at 18,147 points.

Quick update on sterling: it is currently trading at $1.2456 against the dollar. 

Kathleen Brooks, research director at City Index, explains how a rogue "algo" - algorithm - sparked the wild ride for the pound overnight.

Dearbail Jordan
Business reporter

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No area of business is too small for the Competition and Markets Authority (CMA) to intervene it seems. 

The CMA has swooped in to delay a merger between Future Plc and Imagine Publishing for fear it would reduce competition between sci-fi magazines to the detriment of the "hobbyists and professionals" who enjoy the content. 

If the deal went ahead, it would mean SFX and Sci-Fi Now magazines would be owned by one company. 

Future said it will continue its discussions with the CMA "to agree a basis on which it can close the transaction as soon as practicable".  

What will happen next? We'll keep you posted.

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Business presenter Ben Thompson tweets:

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Deutsche Bank has been under intense pressure since US authorities said last month that they wanted the firm to pay $14bn to settle an investigation. 

German officials now say the government is holding talks with US authorities to help the bank reduce the size of the fine. 

Jean-Claude Trichet, a former president of the European Central Bank, tells the Today Programme he doesn't think the German authorities will let the lender go bankrupt.

"There's no Lehman moment there," he says.

He adds that Deutsche Bank isn't as vulnerable as speculators in the markets are thinking. The bank's shares plunged to a 33-year low before making back some ground this week.

The full interview will be broadcast on Talking Business on BBC News channel.

IHS economist Howard Archer tweets:

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The 6.1% drop in the pound against the dollar while we were all sleeping is the second-biggest intraday fall the currency has ever suffered, according to the Financial Times.

It's behind only the 11.1% tumble that resulted as the outcome of the EU referendum result became clear.

To put that in context, today's seen a bigger slide than during both the financial crisis and Black Wednesday. The pound has since made back some ground and is down 1.3%.

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Not much corporate news from London today, so here's a spot from Germany. Innogy - the healthy part of struggling energy company RWE - is due to start trading on the Frankfurt stock exchange this in just under an hour.

The float is Germany's largest IPO since 2000. 

Shares in Innogy - which includes RWE's network, retail and renewable units - were sold at €36 each - the upper end of a narrowed price range of €35 to €36.

The price values the 138.9 million shares on offer at €5bn, giving Innogy a market valuation of €20bn - more than twice RWE's market capitalisation. 

Image source, Getty Images

The fall in the pound could cause the "wrong sort of inflation" next year, says Jane Foley, an analyst at Rabobank. 

A rise in prices - which she says could happen by the middle of next year - would come from higher costs rather than higher demand. 

As a result, "it takes money out of our pockets and acts like a tax increase", she says.

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Sticking with the fall in the pound - which saw the euro worth 94p at one point this morning - one analyst says traders are reacting to hardening talk from Prime Minister Theresa May and EU leaders.

Jane Foley, head of FX strategy at Rabobank, says Mrs May's comments about immigration and leaving the European Court of Justice suggest there will be no entry for the UK into the single market.

It's prompted tough talk from within the EU, and she quotes French President Francois Hollande as saying of Brexit: "It is the crisis".

French and Europeans are taking the view that they must take a hard line to "avoid an existential crisis", Ms Foley says.

An outlying trade in sterling that resulted in a fresh 31-year low for the pound on Friday has been cancelled, said Thomson Reuters, which owns the Reuters foreign exchange brokerage platform RTSL. 

The cancellation resulted in the sterling's low of $1.1378, captured on charts in early Asian trading, being revised to $1.1491. 

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The "flash crash" that sent sterling tumbling has had a knock-on effect on Asian stocks. 

The biggest drop in the pound since Brexit has seen Asian investors flee high-risk assets. 

In early afternoon trade, the region's biggest market - Japan's Nikkei 225 - is down 0.4%, while South Korea's Kospi has fallen 0.5%. 

Hong Kong's Hang Seng is 0.5% lower, while Australia's ASX 200 is down 0.4%. 

Mainland Chinese stock markets are closed all week for the National Day holiday.

The "flash crash" sent sterling from about $1.26 to as low as $1.1378 on some trading platforms in Asia overnight.

The move occurred in a matter of seconds, in thin early trading. Sterling quickly bounced back to levels around $1.25 and was last fetching $1.2432, still down 1.5% on the day. 

Sterling has been "on a precipice since Sunday, since Theresa May and the March Brexit negotiations", said Sean Callow, senior currency strategist at Westpac. "I think we've underestimated how many people had money positions for a very wishy-washy Brexit, or even none."

"It seems like algorithm trading was behind all this in thin liquidity conditions," said a trader for a North American bank. "There were no reasons for sterling to make such big moves ... It was a crazy few minutes."