Business news and markets: live

Business news and markets: live

08.24 London’s blue-chip index has nudged up 0.24pc to 6,592 points in the opening minutes of trade, buoyed by the data out of China this morning showing the world’s number two economy reversed its first half slowdown.

Here’s Jonathan Sudaria, a trader at Capital Spreads:

Quote China’s GDP figures reported a steady growth rate coming out in line with expectations.

Bulls will be content with the fact that the recent downward trend of the last two quarters has been broken.

Royal Mail share price watch

08.13 Shares in the 500-year-old postal service have edged up around 0.8pc this morning, to 484p, a 47pc premium on the 330p opening price.

BoJ governor says effects of policy starting to emerge in economy

08.05 Haruhiko Kuroda has hailed the Bank of Japan’s ultra-loose monetary policy, saying its impact was spreading in the economy and prices. He said the economy was likely to continue its moderate recovery.

Quote The BOJ will continue with quantitative and qualitative easing, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining this in a stable manner.

FTSE poised to open up after China growth picks up again

07.58 Here’s Accendo Market’s Michael van Dulken on the expected open:

Quote FTSE 100 called to open +40pts at 6615, with sentiment getting a boost overnight from a re-acceleration in Chinese growth in Q3 as well as a turnaround in US bourses after the debt ceiling deal and a results beat by Google. Note S&P back at all-time highs and Nasdaq near 13yr highs.

US shutdown means inflation data will be unreliable for months

07.56 Research by the Cleveland branch of the US Federal Reserve (via the Wall Street Journal) suggests that inflation data from the US will be prone to error for months since the federal employees who normally spend the month collecting pricing information from shops were out of the office for the last two weeks due to the government’s partial shutdown. Still, it says, year-on-year inflation data will remain more or less reliable.

Here are the Cleveland Fed’s Randal Verbrugge and Sara Millington:

QuoteSince the CPI price collection relies upon field staff visiting shops, some of the October data will never be collected. As a result, the November CPI release, which is based upon October data, will have a much bigger standard error due to the smaller sample. We can estimate how much bigger by weighing the potential size of the October sample against typical sample sizes, historical standard errors, and the likely inflation rate.

The October sample will be half its usual size. Price collection happens during the working days of the month. The government was shut down for 11 working days, so the missing data represent about 50 percent of the price quotes (since there are 21 working days a month on average).

This level of error gives rise to considerable uncertainty about the true monthly inflation rate. For example, suppose that the October CPI ends up being estimated at its median, 0.14 percent, and we wish to have a wide-enough confidence interval so that we are wrong only 5 percent of the time. In this case, the range of uncertainty about this 0.14 percent estimate would be that true monthly inflation in September was somewhere between 0.05 percent and 0.22 percent.

Serious Fraud Office gags Wall Street Journal over Libor names

07.30 David Enrich, the Wall Street Journal’s European banking editor, has been ordered by the UK’s Serious Fraud Office to restrain from publishing the names of individuals the government plans to implicate in a Libor fixing criminal fraud case. Mr Enrich may not publish “any names in the indictments other than those of Tom Hayes, Terry Farr and James Gilmour” anywhere readers in England and Wales could see them.

In a move described by the Journal as “a serious affront to press freedom”, the SFO has threatened Mr Enrich with fines, imprisonment or the freezing of his assets should the names appear in any newspaper, television broadcast or other report viewable in England and Wales. The report in question will appear in the Wall Street Journal’s US and Asia print editions.

Chinese slowdown reverses in third quarter, but outlook unclear

07.10 Economic growth the Middle Kingdom has picked up to its fastest pace all year, hitting an annualised 7.8pc in the July to September quarter. GDP grew 7.7pc in the first quarter and 7.5pc in the second, both marking a slowdown from the last three months of 2012, when the economy expanded 7.9pc.

The latest GDP reading keeps China on track to achieve the government’s 2013 growth target of 7.5pc, stronger than other major economies but still the worst performance for the country in 23 years. Still, the current administration seems to be comfortable with slowing growth, after three decades of break-neck expansion.

Economists put the pick-up in third quarter expansion down to increased activity in the property market – but noted that since the government is bringing tougher measure to curb prising home prices, that this acceleration is ilkely to be temporary. The government also unleashed a “mini-stiimulus” over the summer which boosted investment in infrastructure like railways.

Falling exports are also expected to limit the strength of any surge in economic growth.

Here’s Shen Jianguang, chief China economist at Mizhuo Securities in Hong Kong:

Quote The Q3 GDP figure is in line with market expectations but the uncertainty is whether the current recovery is sustainable. We think the recovery in the third quarter was mainly driven by the strong momentum of the property market.

We think the government concerns about an over-heated property market are increasing, and tougher measures to curb rising prices may be forthcoming. We expect GDP growth will slow to 7.6 percent in the fourth quarter.

Best of the rest

07.00 The Times reports that Kuwait has made a £1.5bn bid to buy the More London complex next to Tower Bridge, the building which houses the City Hall headquarters of Boris Johnson.

Paul Tucker, departing deputy governor of the Bank of England, has told the Financial Times that hedge funds and shadow banking pose a major risk to financial stability and that regulators must “up their game” in overseeing these sorts of institutions.

The owner of the Grangemouth oil refinery has told its 1,300 workers they face “D-Day” as it demanded they accept cuts to jobs and pensions plus other changes to their working conditions to keep the plant open, reports the Guardian.

The More London complex near Tower Bridge

Top stories this morning

06.50 News that the Treasury has made almost £1bn from energy price hikes leads our finance page this morning. The revelation has prompted Tory MPs to urge David Cameron to scrap VAT on energy bills.

Shares in Google are worth nearly $ 1,000 each after a strong set of third quarter results pushed them up as much as 8pc. Katherine Rushton reports.

Alistair Osborne writes that plans to allow Chinese companies to take control of new nuclear plants could solve Britain’s energy puzzle.

And Ambrose Evans-Pritchard questions whether the deal done in Washington is enough to restore trust in Brand USA.

Good morning

06.45 Good morning and welcome to our daily business and markets live blog, your one stop shop for all the breaking business stories of the day.

Finance News – Business news from the UK and world


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