Pound dips on BoE deputy governor’s rate hike caution; eurozone PMI growth slows –as it happened

All the day’s economic and financial news, as Sir Jon Cunliffe says the timing of Britain’s first interest rate rise since 2007 is an “open question”

And finally, here’s our latest Brexit dashboard, showing the state of the UK economy. It’s not a very cheery picture this month:

Related: The Brexit economy: the storm clouds are gathering

A quiet day in the City ended with the FTSE 100 up just 20 points.

Mining firms had a good day, led by Antofagasta which gained 2.8%.

Bad news 2: World wine production has dropped to a 50 year low, after spring frosts and summer heatwaves ravaged Europe’s tender vines.

Bad news 1: Britain’s mountain of consumer debt is reaching dangerous levels, according to credit rating agency S&P.

Related: UK's £200bn consumer debt unsustainable, S&P warns

Back to gender equality in the City, or rather the lack of it.

My colleague Jill Treanor reports that two of the world’s biggest banks – Goldman Sachs and JP Morgan- haven’t yet signup to the government’s new charter aimed at addressing the issue….

Related: Virgin Money boss criticises US banks' failure to join gender equality charter

Newsflash from America: US companies are growing at a faster rate this month.

Data firm Markit’s manufacturing PMI, which tracks activity at US factories, has jumped to 54.5 in October, from 53.1 last month.

#US: Markit #PMI catching up to #ISM (still big gap though!)

#US GDP growth was slightly above 2.0% q/q AR in Q3, according to Markit #PMI composite $EURUSD $GBPUSD

Over in Moscow Cyprus’ head of state Nikos Anastasiades is holding talks with president Vladimir Putin on the second day of an official visit aimed at strengthening economic ties between the two countries.

Cyprus is without doubt Russia’s friendliest EU member state and this afternoon the Greek Cypriot president Nicos Anastasiades went out of his way to make the point.

“We want to inform the Russian leadership about recent developments in the Cyprus issues, discuss issues related to ties with the European Union and Russia, essential regional issues and the possible role of Cyprus in solving them.”

Caterpillar’s strong results have helped to send the US stock market to fresh record highs, once again….

Dow hits record, again and again.

Caterpillar, the machinery and construction giant, has smashed Wall Street forecasts.

The firm, famous for its yellow diggers, hiked its profit forecasts and announced that revenues had surged by 25% to $11.4bn in the last quarter.

“Results were better than expected across the board, with construction, mining, energy all strong,”

Caterpillar is on such a tear.

This is Caterpillar's $CAT third earnings triple play in a row. Couldn't find a CAT bull 2 years ago. Up 130%+ since start of 2016.

John Mann MP has now issued a statement, criticising the Bank of England for not appointing more women to top jobs (an issue raised earlier).

“Last week, the appointment of Sir Dave Ramsden to the Deputy Governorship at the Bank of England was confirmed. It is shameful that when so many talented women are at the forefront of the private sector, the trade union movement and the academic world, institutions like the Treasury and the Bank of England keep turning to the same group of men to fill their appointments.

I hope to see an increasingly diverse range of nominees come before the Treasury Committee as new vacancies arise”

Speaking of Greece…. the country’s third bailout review began in earnest today.

“We have managed to help the debt burden, a lot has been done there. We stand ready, if they do their part, to do more if necessary. At the end of the programme in the summer next year, we will look again at how sustainable the debt is.”

Over in Berlin, Wolfgang Schäuble has formally stepped down as Germany’s finance minister and taken up a new position as president of the Bundestag.

And to mark the occasion, hundreds of finance ministry staff assembled themselves into a big fat zero for a photo which was presented to Schäuble last night.

Auf Wiedersehen, Herr Minister! Ihre Kolleginnen und Kollegen im Bundesfinanzministerium. #Schäuble

'Here's how many of Macron's proposals we will accept'

Sir Jon Cunliffe isn’t the only BoE policymaker sounding wary of raising interest rates next month.

Last week, fellow deputy governor Sir Dave Ramsden revealed that he wasn’t in the majority of MPC members who felt, in September, that a rate rise was close.

Carney also has to worry about credibility. He has previously come under fire for hinting at rate increases that never arrived, with one lawmaker branding him an “unreliable boyfriend” in 2014. That label has stuck with him ever since, and, even though he has stuck resolutely to the MPC’s “coming months” language in recent comments, he’s under pressure to deliver this time.

Sterling has fallen a little this morning, following BoE deputy governor Sir Jon Cunliffe’s cautious words about interest rates.

The pound has lost a quarter of a cent against the US dollar, to $1.317, and a similar amount against the euro to below €1.12.

Analysts have typically favoured the pound as the likelihood of a rate rise increases, and so any signals to the contrary could weigh on sterling.

Via the @FT : how @BankOfEngland staff research assesses the #inflation impact over time of a #currency depreciation. #economy #sterling #fx

Virgin Money boss Jayne-Anne Gadhia also told the Treasury committee about how sexism used to be rife in the financial sector.

She explained that during her time at Royal Bank of Scotland….

“There was a very male culture and I’ve talked previously about part of that being the sort of win-lose culture.

“Undoubtedly there was a pervading sexism where I remember a very senior woman being very upset one day telling me that she was expected to sleep with her boss.

Sexism was pervasive in finance, says Virgin Money boss

Jayne-Anne Gadhia also suggested there was no excuse for the Bank of England not to have a decent number of women in senior positions.

Currently the Financial Policy Committee is entirely male, while Silvana Tenreyro is the only woman on the Monetary Policy Committee.

Can't succeed in #WomenInFinance mission unless Bank of England has more women in its policymaking committees, says @JohnMannMP

Over in parliament, Jayne-Anne Gadhia, the CEO of Virgin Money, has been discussing how to tackle gender imbalances in Britain’s financial sector.

Newsflash: The eurozone’s collective government debt pile has shrunk, as a percentage of the region’s economy.

Eurozone government debt was equal to 89.1% of GDP at the end of June, down from 89.2% in the first quarter of 2017.

Euro area #GovernmentDebt slightly down to 89.1% of GDP at end Q2 2017 (89.2% in Q1 2017)

Euro area seasonally adjusted #GovernmentDeficit up to 1.2% of GDP in Q2 2017

Today’s purchasing managers report shows that Europe’s recovery is still strong, says economist Rupert Seggins:

Euro Area economy still going strong according to the October PMI (55.9). France PMI at a more than 6 year high. Price pressures reported.

Morning Note: 1. Fed chair decision 'really, really close' 2. China party congress wraps up. 3. Eurozone manufacturing outperforms

Eurozone PMI data mixed – services falls short of forecasts but manufacturing beats #Markit #PMI #EUR

Newsflash: Companies across the eurozone are growing at a slower rate than expected this month.

The Composite Purchasing Managers Index has dropped to 55.9, down from 56.7 in September. That’s a weaker reading than expected, but still shows solid expansion (anything over 50 shows growth).

After reaching a fresh six-year high, the French PMI points to annual GDP growth of around 0.7% at the start of Q4

Catch-up complete? French composite PMI above Germany (third time in 5 years).

Whitbread’s claim that Britain is entering a third wave of coffee drinking, and happy to pay more for more complicated brews, might amuse their rivals at McDonalds…..

Whitbread shares have fallen by over 4% in early trading, as traders react to the slowdown in sales and falling profits at its Costa Coffee chain.

Whitbread will be well aware of the pressures facing the purses of UK consumers. Weaker like-for-like numbers this time round will add to worries that customers are feeling the pinch.”

a period in which consumers’ preferences for coffee become more sophisticated and are willing to spend more per cup for higher quality and innovative drinks.

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Sir Jon Cunliffe also warned European cities that they won’t knock London off its perch as the region’s financial centre, despite Brexit.

He told the Western Mail that some City banks will move operations over the Channel, or even the Atlantic, once Britain leaves the European Union.

We have an expertise in financial services and we have a critical mass of talent and deep knowledge and those sort of big economic agglomerations and economic activity exist because they add value and they reduce costs.

“It may be that some activities that are carried out in London have to move to the continent. And maybe some activities carried out in London no longer become efficient, and rather than moving to the continent, they just go back to New York or somewhere else, or maybe they don’t happen at all.

One of the Bank of England’s top policymakers has cautioned against assuming that UK interest rates will rise next month.

“In our August forecast we forecast that rate of growth [GDP] of about 1.5% a year, and it is going to continue for the next two to three years. And pay is going to gradually pick up from around 2% to around 3.5% by the end [three year forecast period].

“And that is going to put some domestic pressure on inflation, as the imported inflation eases off. Now if that forecast comes to pass over the forecast period, interest rates will need to go up.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Today we get our first insight into how Europe’s economy is performing this quarter, with the ‘flash’ survey of purchasing managers at companies across the eurozone.

The PMIs ended the second quarter higher than they begun it, suggesting some pick-up in momentum toward the quarter’s end and the continued strength of new orders in both the manufacturing and services sectors suggests that should continue into the third quarter.

UK RNS today #1 – Whitbread – 7% rise in interim revs/profits, holding FY expectations. 'Clear plan for growth'

UK RNS today #2 – Carpetright – small lfl UK sales rise but lower profits vs last yr. Hopeful H2 improvement

UK RNS today #4 – Hunting – improved trading, modest profit expected; Bunzl – perf consistent with expectations

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