Summary

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  • Bank of England cuts UK growth forecasts

  • UK factories slowdown - report

  • Eurozone factories slowdown for sixth month - report

  • Shell shares slide after results disappoint

  • Sales of Rolls-Royce cars surge 42%

  • Thomas Cook shares jump

  • Kier leaps 40% on reduced debt

  • Pound dips through $1.21

  1. It's not just Brexit weighing on manufacturingpublished at 11:00 British Summer Time 1 August 2019

    man in  mask working at a machineImage source, Getty Images

    Thomas Pugh, UK economist at Capital Economics, has been looking at the PMI manufacturing indicator published earlier.

    He says the indication that manufacturing contracted at the start of the third quarter will not be a surprise to the Bank of England - which will announce at noon the outcome of its latest interest rate setting meeting - so rates will be left as they are.

    "Some of the weakness can be blamed on Brexit but it seems more plausible that a weaker global economy should take most of the blame. Indeed, manufacturing PMI’s in the eurozone and the US both fell in July as well. And it makes sense that as the manufacturing sector is more exposed to global economic conditions it would be hit first and hit hardest," he said.

  2. Piano firm fined by CMApublished at 10:45 British Summer Time 1 August 2019

    hands on a keyboardImage source, CMA

    The Competition and Markets Authority has fined Casio £3.7m for breaking competition law by preventing online discounting for its digital pianos and keyboards.

    The watchdog says Casio has admitted that, between 2013 and 2018, it broke competition law by implementing a policy designed to restrict retailer freedom to set prices online, requiring digital pianos and keyboards to be sold at or above a minimum price.

    The CMA said this was known as resale price maintenance (RPM) and meant customers could miss out on the best possible prices because, even when they shop around, they find all retailers tend to be selling at around the same price.

    Ann Pope, CMA senior director of antitrust, said: "A digital piano or keyboard can be a significant purchase, and customers should be able to shop around for a good price. Casio’s illegal action – telling retailers not to offer their musical instruments at discounted prices – made it harder for customers to shop around for a better price and meant they risked paying over the odds."

    The fine was reduced because the company co-operated, the CMA said.

  3. Thomas Cook shares rocketpublished at 10:34 British Summer Time 1 August 2019

    shopImage source, Getty Images

    Shares in Thomas Cook have jumped 28%, boosted by the disclosure that Nesat Kockar, founder and owner of Turkish tour operator Anex Tourism, has taken a stake in the tour operator.

    As a reminder, Thomas Cook is in £750m rescue talks with banks and its largest shareholder, Fosun, which effectively would end up with control of the troubled firm.

    While the 28% rise in shares sound impressive, it's only a rise of 1.7p to 7.1p.

    In 2015 the shares traded at 160p.

  4. Scottish firm in administrationpublished at 10:26 British Summer Time 1 August 2019

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  5. Kier shares jump 40%published at 10:20 British Summer Time 1 August 2019

    Keir logoImage source, Getty Images

    Shares in troubled contractor Kier have leapt 40% after it said its housing building unit had received "significant interest" and that its debt levels were falling.

    That is despite it admitting that full-year revenue would fall by £100m.

    In June Kier said it will cut 1,200 jobs and sell its homebuilding business, Kier Living, and shut or selling other interests, including its recycling and rubbish processing units.

    "The group has received significant interest in Kier Living, its housebuilding division, and has commenced the sale process for this business," the company said on Thursday.

    It also named Simon Kesterton as its chief financial officer from global design and engineering company RPC. The company said Bev Dew, finance director, will stand down from the board after full-year results on 19 September and is expected to remain on garden leave for the remainder of his notice period, which ends in May 2020.

  6. Ford: Hard Brexit increases risk to our businesspublished at 10:11 British Summer Time 1 August 2019

    Today Programme
    BBC Radio 4

    Ford signImage source, Getty Images

    Joe Hinrichs, president of automotive at US car giant Ford has been speaking to the Today programme about Brexit and what it means for its business in the UK.

    "We believe a hard Brexit puts a lot of risk to our business and to the automobile business in general," he says.

    "The odds of a no-deal Brexit have certainly increased in recent months. The key is going to be what happens at the borders, what happens in the ports and importantly what happens to the pound sterling."

    He adds: "We don't think it is in the EU's interest or the UK's interest for there not to be resolution to these very important topics."

  7. Sterling resumes declinepublished at 10:01 British Summer Time 1 August 2019

    Pound dollar

    The pound has started falling again after yesterday's respite.

    The currency dropped to a 30-month low of $1.2101 during Asian trading and is now hanging in above $1.21 at $1.2120.

    Worries over the impact of a no-deal Brexit are weighing on the currency.

    Meanwhile the dollar has strengthened as the head of the US Federal Reserve appeared to indicate that there would not be further interest rate cuts.

    The pound is now approaching the lows hit in 2016, after the referendum on membership on the European Union.

    The chart above shows dollar/pound rate over the last five years. You can see that before the referendum the pound was close to $1.50.

  8. Bank of England will change tone not ratespublished at 09:50 British Summer Time 1 August 2019

    Today Programme
    BBC Radio 4

    Bank of England buildingImage source, Reuters

    While the US Fed cut its main interest rate last night, there's no expectation we will see the same thing from the Bank of England today following the most recent meeting of its Monetary Policy Committee.

    But Karen Ward, chief market strategist at JP Morgan Asset Management, says that what we will hear is a "very different tone".

    She says: "Up until recently, the Bank has been saying that given unemployment is at a multi-decade low and the economy has been relatively resilient they should probably have high interest rates but because of Brexit uncertainty they weren't going to deliver.

    "So the tone has been that the next move would be up."

    But she says: "I think we will hear from them that's no longer the case, that the next move is much more likely to be down but at this stage they don't see enough in the data to justify moving today."

  9. Chinese shares fallpublished at 09:50 British Summer Time 1 August 2019

    Hong Kong's Hang Seng closed down 0.8% at 27,565.70, while the Shanghai Composite lost 0.8% to end at 2,908.77.

  10. UK production falling at quarterly rate of 1%published at 09:41 British Summer Time 1 August 2019

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  11. 'Killer combination' hits UK manufacturerspublished at 09:39 British Summer Time 1 August 2019

    The monthly survey of purchasing managers by Markit/CIPS is closely watched. Here's what Duncan Brock, from CIPS had to say about the latest figures.

    “A killer combination of economic uncertainty and the weakest production levels for seven years, battered the manufacturing sector into contraction for the third consecutive month in July.

    "New orders fell as businesses used up stockpiled materials, EU businesses moved supply chains out of the UK and weakness in the global economy stifled demand from both domestic and export markets.

    “However, optimism for the future stayed relatively buoyant in the hope that certainty will once again return to UK shores soon and in spite of the increase in no-deal Brexit rhetoric.

  12. UK manufacturing contractspublished at 09:35 British Summer Time 1 August 2019
    Breaking

    cutting machine showing off sparksImage source, Getty Images

    Purchasing Managers Index (PMI) data for the UK which has just been published.

    It shows manufacturing continued to contract in July with a reading of 48. (Any figure below 50 shows a decline.) That is a six-and-half year low and the level it reached in June.

    It was slightly better than the Reuters poll of economists which had expected a fall to 47.7.

    The output component of the index fell to 47.0, its lowest since July 2012.

  13. Germany leads manufacturing downturnpublished at 09:20 British Summer Time 1 August 2019

    chartImage source, IHSMARKIT

    Chris Williamson is chief business economist at IHS Markit, which compiles the Purchasing Managers' Index (PMI), which shows manufacturing activity in the eurozone contracted in June at the fastest rate since 2012.

    "The eurozone PMI dashboard is a sea of red, with all lights warning on the deteriorating health of the region's manufacturers.

    “Forward indicators also deteriorated.

    "The downturn is being led by Germany, reflective of a further worsening conditions in the auto sector and falling global demand for business equipment. However, output is also falling in Italy, France, Spain, Ireland and Austria and is close to stalling in the Netherlands. Greece notably bucked the deteriorating trend.

    "Rising geopolitical concerns, including trade wars and Brexit, and worries about slower economic growth both domestically and internationally were all widely reported as having subdued current demand and hit confidence in the outlook."

  14. 'Worrying news' on eurozone manufacturingpublished at 09:10 British Summer Time 1 August 2019

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  15. Shell shares lead FTSE 100 lowerpublished at 08:59 British Summer Time 1 August 2019

    Shell signImage source, Getty Images

    With a 4% fall, Shell shares are the biggest losers among FSTE 100 companies today.

    Earlier it reported second quarter results, which showed that its most closely watched measure of income fell 25% to $3.6bn.

    "This set of earnings is weaker than most were looking for and were below expectations in all the main divisions," Morgan Stanley analyst Martijn Rats said.

    "Earnings remain hard to forecast and volatile."

    It blamed lower gas prices and reduced profit margins in oil refining.

    However, on Tuesday Shell's rival BP reported better than expected results.

  16. Market movers: Aston Martin up; Intu down againpublished at 08:42 British Summer Time 1 August 2019

    After being hammered down 12% yesterday Aston Martin shares have recovered a bit, up almost 5% today.

    But shares in shopping centre owner Intu are down another 6%. That adds to yesterday's 20% loss, following the company's trading update which showed income falling.

  17. London Stock Exchange buys data firmpublished at 08:25 British Summer Time 1 August 2019

    lseImage source, Getty Images

    London Stock Exchange has confirmed it will buy financial data firm Refinitiv for $27bn.

    Thomson Reuters sold Refinitiv last year to a group led by money manager Blackstone.

    It turns LSE into a rival for financial data firm Bloomberg.

    Shares jumped 6%.

  18. FTSE 100 starts higher: Shell slumps; Barclays risespublished at 08:09 British Summer Time 1 August 2019

    In early trading the FTSE 100 is adding to Wednesday's losses.

    The benchmark index is down 29 points at 7,556.

    Not helping is a 4% loss for Royal Dutch Shell. It released worse than expected results earlier.

    Barclays is 0.8% higher after its trading update.

  19. BA pilots want a share of the airline's profitspublished at 07:44 British Summer Time 1 August 2019

    Today Programme
    BBC Radio 4

    British Airways pilotsImage source, Getty Images

    Later today British Airways and the pilots union Balpa meet at Acas to try to resolve their dispute over pay.

    Pilots have voted in favour of a strike, but Brian Strutton, general secretary of Balpa, says the union still wants to resolve the dispute through negotiation.

    He hopes that BA will offer pilots a share of the profits.

    "During BA's lean times pilots made sacrifices. They had pay cuts... so what pilots are saying is that now BA is highly profitable... they want a share of that," he said.

    The average pilot at BA makes £100,000 a year. A new cadet is on about £26,000.

  20. Merlin hit by 'poor weather'published at 07:28 British Summer Time 1 August 2019

    legolandImage source, Getty Images

    Legoland owner Merlin Entertainments warned investors about a rough trading patch, external.

    "Although we enjoyed a strong Easter and Spring Break performance, trading since then has been affected by poor weather, difficult conditions in a number of markets and limited momentum from 'The LEGO Movie 2'," it said today.

    Profit for the first half of the year fell to £25m from £33m a year earlier.