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Business news - LIVE: Markets deliver ominous signal US recession may be looming

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Ben Chapman
Wednesday 14 August 2019 13:03 BST
Democratic debate: Elizabeth Warren on who the current economy is working for

Markets have delivered an ominous sign that recession may be on the way while Germany’s economy shrank and Chinese industrial output slumped to a seventeen-year low amid deepening fears about the worldwide fallout from Donald Trump’s trade war.

Yield curves inverted on UK and US government debt on Wednesday, signalling deepening pessimism about both countries’ economic futures.

America has fallen into recession after the last seven times yield curves have inverted. An inversion means long-dated government debt is delivers a lower return than short-dated government debt.

Meanwhile, a poll this week found that the number of fund managers predicting the global economy could enter contraction in the next year jumped to its highest since 2011.

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Hello, and welcome to The Independent's live coverage of business and economics news around the world.

Germany's economy shrank by 0.1 per cent in the second quarter as global trade conflicts, falling exports and troubles in the car industry dragged growth downwards.

German car makers, a crucial pillar of the economy, face tougher emissions standards in Europe and China and a switch to electric cars, while Brexit uncertainty has weighed on confidence.

ben.chapman14 August 2019 09:12

Oil prices fell on Wednesday on disappointing economic data from China and a rise in US crude inventories, erasing some of the sharp gains in the previous session after the US said it would delay tariffs on some Chinese products, easing trade tensions.

Brent crude was down 46 cents, or 0.8 per cent, at $60.84 a barrel  after rising 4.7 per cent on Tuesday, the biggest percentage gain since December.


ben.chapman14 August 2019 09:14

The number of fund managers predicting a global recession has jumped to an eight-year high according to a poll by Bank of America Merrill Lynch.

It found that 34 per cent of respondents think it is likely the world economy will begin to contract, up from just 6 per cent in April.

Concerns about the impact of a trade war topped the list of concerns, cited by more than half of investors.

The IMF forecasts 3.2 per cent growth this year, down from 3.6 per cent last year.

ben.chapman14 August 2019 09:24

Philip Hammond has launched a blistering attack on Boris Johnson, saying the new prime minister is allowing "unelected people" to "pull the strings" in Downing Street.

The former chancellor attacked "absurd" claims from "hardliners" about a no-deal Brexit and said the first weeks of the new government were "not encouraging".

The comments will be seen as an attack on Dominic Cummings, Mr Johnson's top policy adviser.

Full story from political correspondent Ben Kentish here:

ben.chapman14 August 2019 09:34

BREAKING: inflation unexpectedly rose to 2.1 per cent in July, the Office for National Statistics says.

Chris Jenkins, assistant head of inflation at ONS, says: "The inflation rate increased slightly, with computer games, consoles and hotel prices rising more than they did last year.

"Conversely, air, international rail and sea fares did not rise by as much as 12 months ago."

ben.chapman14 August 2019 09:36

Brexiteer Ian Duncan-Smith has hit back at Philip Hammond over his no-deal comments.

Duncan-Smith accuses the former chancellor of doing "nothing to prepare us for leaving with no deal". 

The former Conservative Party leader told the BBC: "By not preparing to leave with no deal, they made it certain that we'd have to swallow everything that the European Union gave us.

"So the crime that has been committed in political terms was committed by him and those who did not prepare us to leave."

ben.chapman14 August 2019 09:38

Boris Johnson's generous business donors have been revealed in the latest register of MP's interests.

Brown's, a posh hotel in Mayfair, threw the new prime minister a £12,000 victory bash on 23 July.

London hotels have been boosted by the weak pound which has fallen sharply since the Brexit vote and is predicted to plummet further if the UK leaves the EU without a deal.

Private equity firm boss Hazem Ben-Gacem donated £25,000 while Carphone Warehouse co-founder David Ross stumped up £10,000.

ben.chapman14 August 2019 09:51

Rising inflation is not good news for consumers who have seen the spending power of their wages eroded.

Today inflation came in at 2.1 per cent while yesterday we heard that wages jumped 3.9 per cent, implying a real-terms average pay increase of 1.8 per cent.

ben.chapman14 August 2019 09:55

One thing that is definitely set to cost more is regulated train fares - which includes season tickets in southeast England and many off-peak return tickets and peak-time fares around major cities.

The fares are set to rise by 2.8 per cent next year, in line with the July rate of RPI inflation.

Commuters from the new transport secretary’s constituency will pay an extra £84 a year to get to work in London from the start of 2020.

Grant Shapps is MP for Welwyn Hatfield. From January next year, the price of an annual season ticket from Welwyn Garden City to London will rise from £3,016 to £3,100.

Everthing you need to know from Simon Calder, our travel correspondent, is here:

ben.chapman14 August 2019 09:59

UK house prices grew 0.9 per cent in the year to June, the same increase as in May, official figures show.

The lowest annual growth was in London, where prices fell by 2.7 per cent over the year to June 2019, less than the 3.1 per cent fall in May 2019. Average house prices in London have now been falling over the year each month since March 2018.

Across the UK, the average house cost £230,292, down from a peak of £232,000 in August 2018.

ben.chapman14 August 2019 10:06

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