Fed rate of interest rise expected within the ‘near term’

 Many Fed policymakers expect that rates of interest must be elevated within the “near term,” based on the minutes from the US central bank’s last policy meeting released on Wednesday.

The readout in the Oct 31 to Nov 1 meeting, where the Given stored rates unchanged, also demonstrated policymakers generally agreed the economy was poised for strong growth. Several Given officials also saw improved chances the US Congress would pass significant tax cuts that will boost business investment.

Although some policymakers stated they still required to see more data before deciding the timing of the rate hike, most of the officials stated the unemployed rate made an appearance to become lacking for inflation to stay at its current weak level.

“Participants expected solid development in consumer spending soon, based on ongoing strength within the work market,” the Given stated within the minutes. “Many participants believed that another rise in the prospective range for that federal funds rate was apt to be warranted soon.Inches

The central bank has elevated rates four occasions inside a tightening cycle that started at the end of 2015. The Given presently predicts yet another rate rise this season and three more hikes in 2018.

The meeting marked among the last policy reviews to become attended by Given chairman Janet Yellen, who announced on Monday she’d resign from her seat around the Fed’s Board of Governors once Jerome Powell is confirmed and sworn directly into replace her as mind from the central bank.

President Jesse Trump nominated Mr Powell, who’s expected to stay in place when Ms Yellen’s four-year term as Given chief leads to Feb.

Within the minutes, policymakers involved in what has turned into a regular debate over why inflation has continued to be underneath the Fed’s 2pc target for quite some time. Most agreed that tightness within the work market may likely fuel greater inflation within the medium term.

A few of the people who election on policy, however, expressed concern within the inflation outlook, based on the minutes. These policymakers emphasized they’d be searching at approaching economic data before deciding the timing of future rate increases.

A few policymakers were concerned enough about persistently weak cost gains they recommended the Given think about a new framework that dedicated to allowing greater inflation to compensate for periods of low cost increases.

Because the last policy meeting, Ms Yellen has stuck by her conjecture that inflation will quickly rebound toward the Fed’s target, although on Tuesday she stated she’s “very uncertain” relating to this and it is available to the chance that prices could remain low for many years.

America’s most effective lady is losing her job. What which means.

choice to stay on as a governor — comes amid growing worry about the reduced figures of ladies in financial aspects and also the challenges they face in moving ahead within the field.  Only 13 % of full professors in PhD-granting financial aspects departments are women. Male financial aspects majors outnumber their female peers by nearly 3 to at least one.

For many Given watchers — and others on social networking — the decision to exchange Yellen spotlighted an engaged that female leaders might find familiar.

“You have a good example of this incredibly, superlatively qualified woman getting replaced by Yellen lite,” stated Heidi Hartmann, an economist and president from the Institute for Women’s Policy Research, talking about Powell’s support of Yellen’s interest-rate decisions. “It’s not a great message if you are attempting to diversify leadership and integrate dug-in professions where males are very protective of the turf.”

Simply getting started in the profession may take determination. To determine sexist attitudes within the field, Alice Wu, a student in the College of California at Berkeley, found greater than a million posts with an online forum, Financial aspects Employment Market Rumors, to review how economists discuss women out there. One of the words most connected with females: “hotter,” “lesbian,” “anal,” “slut,” “hot,” “feminazi,” “marry” and “dated.” The terms for males? “Mathematician,” “pricing,” “adviser,” “motivated,” “Nobel.” The study set off a firestorm, using more than 1,000 economists lately signing a petition asking the American Economic Association to start its own job site.

A minumum of one activist group recommended the conclusion on Yellen had sexist overtones.

“This unusual and sexist decision ought to be deeply disturbing to both liberals and conservatives alike, who recognize the unparalleled nature of Yellen’s success and understand the significance of maintaining stability within our banking system,” Shaunna Thomas, co-founding father of UltraViolet, a group centered on feminist issues and social networking advocacy, stated inside a statement.

The White-colored House rejected the concept gender would be a factor.

“The mere suggestion is definitely an affront to Chair Yellen,” White-colored House press secretary Sarah Huckabee Sanders stated inside a statement. “The president decided on a highly qualified nominee, and it has expressed just the utmost respect on her service.”

Some female economists stated that little ought to be read in to the decision, mentioning it isn’t surprising Trump may wish to go their own way.

“I think it truly reflects how polarized our occasions are that [Trump] didn’t feel he could appoint somebody that had her origins under President Obama,” stated Betsey Stevenson, a professor in the College of Michigan who had been part of Obama’s Council of monetary Advisors. “This looks in my experience like attempting to thread the needle,” obtaining a Republican Given chair who’d continue Yellen’s financial policy, she stated.

Trump appeared to point exactly that within an interview a week ago.

“You enjoy making your personal mark,” Trump told Fox Business’s Lou Dobbs, “which is among most likely the things she gets just a little against her.” In Thursday’s Rose Garden announcement, Trump known as Yellen “absolutely an amazing person” who’d “done an awesome job” and said he was naming Powell, an old investment banker, to become chair “because he’ll provide just that kind of leadership: He’s strong, he’s committed, he’s smart.” Trump noted his private-sector experience and “real-world perspective.”

Wharton’s Conti-Brown said that although Trump’s reported preference for officials out of “central casting” should not be discounted, “I think this pick is all about ongoing the Yellen Given without Janet Yellen.” Also, Republicans have been longtime critics of Yellen. The “more persuasive” argument, he stated, is the fact that “to renominate Janet Yellen could be an admission through the Republicans they have been noisally and badly wrong about financial policy.”

Alice Rivlin, who had been smoking chair from the Given Board of Governors throughout the Clinton administration, stated, “I don’t think this decision reflects either on Janet or on her behalf gender,” adding: “Donald Trump loves to do things their own way, which is a really partisan moment. So I am not surprised he desired to change leadership in the Given.” Powell is “a very credible candidate,” Rivlin stated.

Yellen’s tenure was marked not just on her handling of financial policy and headline economic figures, economists stated, however for her deft leadership from the Given, helping to bridge the deep and heated divides that sometime exist between people.

“She corralled the cats,” stated Diane Swonk, a Chicago-based economist.

Others pointed to Yellen’s listening skills and her willingness to discuss financial policy and macroeconomics when it comes to their tangible benefits on workers and communities, an impression that Karen Dynan, a former Treasury Department chief economist, stated might have helped draw more women to financial aspects.

“She can be hard, but she’s also warm and compassionate along with a good listener. And i believe it has made her extraordinarily effective,” she stated. “The switch side of her being constructive regarding attracting more women in to the field is it might be discouraging when she isn’t reappointed after getting done a great job.”

Yet Stevenson stated she’s positive that the pioneering example Yellen has provided for women in the area of financial aspects will over-shadow that. While Trump’s decision may break from precedent, Stevenson stated, it is possible other people, of either gender, might have faced an identical fate in the present political atmosphere.

“She should be reappointed,” Stevenson stated of Yellen. “But she also should not have access to her legacy be that they wasn’t reappointed.”

Read also:

How most leadership training programs fail women

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The truly amazing unwinding: Given begins slow demise of their publish-crash stimulus

The Fed has announced it’ll begin the truly amazing unwinding from the gargantuan stimulus programme it started near to about ten years ago within the teeth from the worst recession in living memory.

As broadly expected, the Given dicated to start reducing its portfolio beginning in October, and stored rates of interest at a variety of 1% to at least one.25%.

The move, announced following a two-day meeting by Given officials, will begin the gradual decrease in the central bank’s $4.5tn portfolio of bonds along with other securities, bought to help keep rates of interest negligable so that they can kickstart the economy.

The Given chair, Jesse Yellen, has stated she’s hopeful the unwinding is going to be as uneventful as “watching paint dry” and also the Given intends to reduce its balance sheet in this steady but very slow manner that it’ll not modify the wider economy.

Stock markets have ongoing to create new records despite Yellen’s obvious signals the giant sell-off is originating which rates of interest will probably continue their steady but very slow climb back towards historic norms.

“tad complacent”. Writing after Yellen’s last press conference he recognized Yellen’s capability to fine-tune “the message the Given is attempting to share as well as in deflecting political questions that they would prosper to avoid”.

But he cautioned that her thought that the united states economy was bouncing away from a slowdown within the first quarter might be too positive which the decrease in the total amount sheet, coupled with rising rates of interest, “will most likely push lengthy-term rates of interest greater within the next couple of years. While still low inflation should limit the rear in yields, it’ll likely feel just a little worse than ‘paint drying’ for investors heavily allotted towards the lengthy finish from the treasury market,” he authored.

Former Given chair Ben Bernanke began the enormous stimulus programme, referred to as Quantitative Easing (QE), in 2008 following the economic crisis stepped the planet economy in to the worst recession because the Great Depression.

The Fed’s balance sheet of treasury securities and US-backed mortgage-related securities increased from about $800bn to $4.5tn because the central bank gone to live in stimulate economic growth by reduction of longer-term rates of interest, for example individuals for mortgages and company bonds.

Stephen D. Williamson authored lately. “With respect to QE, you will find top reasons to be suspicious it works as marketed, and a few economists make a great situation that QE is really harmful.”

The Ecu Central Bank started an identical QE programme in March 2015 and it is likely to continue the stimulus into 2019.

FTSE 100 snaps losing streak as the pound slips from hike hope highs

  • FTSE 100 rebounds as the pound’s momentum slows on the currency markets
  • BAE Systems jumps 2.9pc on Qatar Typhoon jet order; gold producers Fresnillo and Randgold Resources fall as precious metal prices continue to retreat
  • Pound slips from highs recorded last week after the Bank of England gave its strongest hint yet that interest rates will rise before the end of the year; Mark Carney speech (4pm) could lift sterling if he reaffirms the MPC’s plans for a hike
  • House prices nudged down a further 1.2pc in September, according to Rightmove

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US indices hitting highs pulls up European stocks; pound mixed ahead of Carney speech

Mark Carney could move sterling in his speech at the top of the hour

European stocks have been supported this afternoon by the bright start across the Atlantic, according to Spreadex analyst Connor Campbell.

He said on this afternoon’s action:

“A record-breaking open from the Dow Jones kept the European indices feeling positive this Monday afternoon.

“The Dow only needed to rise 0.3% after the bell to hit a new 22300-plus high; the S&P 500 followed suit, climbing above 2500 for the first time in its history. The recent surge from the US indices has lined up with the dollar’s September decline against the pound, where it has shed nearly 5% in the last 18 days.

“Over in Europe the US open allowed the FTSE to widen its gains once again. The UK index is now up half a percent, putting some distance between it and its sub-7200 low last Friday.” 

Just a reminder that we’ll be bringing you the latest updates from Mark Carney’s IMF speech at 4pm. Ahead of the appearance, the pound is putting in a patchy performance, nudging down against both the dollar and euro but moving higher against the currency markets’ laggard today, the Japanese yen.


Bell Pottinger scandal widens as Rentokil director who introduced the PR firm to the Guptas steps down

Bell Pottinger’s London office

The scandal surrounding public relations firm Bell Pottinger has deepened as the man who introduced the company to the billionaire Gupta family, Chris Geoghegan, has stepped down from his role at Rentokil.

Mr Geoghegan, BAE Systems’ former chief operating officer, reportedly earned a six-figure sum for brokering the controversial deal between Bell Pottinger and the Guptas, which ultimately led to the firm’s administration last week.

Cleaning and hygiene firm Rentokil has announced that Mr Geoghegan will be stepping down with immediate effect.

As a result, he also steps down as chairman of the firm’s remuneration committee and senior independent director. He had been on the board for just over a year, having been joint chief operating officer at BAE Systems from 2002 to 2007.

Read Rhiannon Bury’s full report here


Dow Jones on course for another record close

The Dow Jones is on course for another record close

US stocks have nudged up early on and the Dow Jones is on course for another record close with the Federal Reserve’s latest policy decision now in the sights of investors.

ING’s chief international economist James Knightley believes that that the markets are underestimating the chance of a fasted paced hiking cycle and that Wednesday’s meeting may not be the non-event some believe it will be.

He added that investors should give more credence to the Fed’s forecasts on interest rates:

“With just one hike priced in by the end of 2018, the market’s view on interest rates is still worlds apart from the Fed’s June projections, which pencilled in 100bp of rate hikes over the next 18 months. 

“Some market scepticism is understandable. The Fed has signalled higher interest rates on numerous occasions over the past couple of years, only to then subsequently not follow through with them. But also with several measures of inflation well below 2%, there is a sense that there is little need for tighter policy. 

“This latter point, in particular, may see some officials becoming less aggressive on their expectations for the path of interest rates. As such, we would not be surprised to see the dot diagram move closer to our forecast of three rate hikes rather than the four previously indicated.”

Given the rollercoaster the ECB and Bank of England has given the markets in the last few weeks, it would be naive to rule out any other shocks from the central banking top tier one would think.


Britain braces for higher energy prices this winter  

Winter electricity in the UK market is already 16pc higher than it was at this time last year

Energy bills in the UK could be set to rise this winter after the cost of power jumped well above last year’s prices.

The wholesale cost of winter electricity in the UK market is on average 16pc, or around £7 per megawatt-hour, higher than it was this time last year.

The price rises could spell trouble for British bill payers who faced a flurry of tariff hikes over the spring following last winter’s volatile energy trading.

Last year market prices surged higher due to safety concerns across almost a fifth of EDF’s 58-strong French nuclear reactor fleet.

This year, energy prices are climbing due to ongoing concerns around France’s nuclear plants as well as Germany’s reliance on power from coal, which is trading 50pc higher than last year.

Read Jillian Ambrose’s full report here


Mark Carney speech preview

Former BoE governor Mervyn King said that central bankers can use tricks and bluffs to manipulate markets

Interest rate forecast revisions have been flooding in since the Bank of England surprised the markets last Thursday by taking a hawkish turn but some have raised doubts that the latest rhetoric coming out of the central bank is little more than monetary policy dark arts.

The theory goes that the MPC’s hawkish rhetoric is designed to lift the pound, which will in turn bring down inflation without having to resort to the blunter tools at the central bank’s disposal.

Can Mark Carney reassure any doubters this afternoon in his speech at the IMF?

The markets have been here twice before with Mr Carney and the ‘Maradona theory’, the idea proposed by former governor Mervyn King that the markets can be manipulated by central bankers in the same way that Maradona could beat five defender by walking in a straight line through shoulder shifts and bluffs, could be wearing a little thin if rates aren’t raised before the end of the year.

Investec’s Philip Shaw, who like HSBC this morning and many others, has revised his forecasts since the latest twist believes the BoE is serious this time, however.

He said:

“The MPC’s latest prognosis has not come out of the blue. Indeed its concerns over tight labour markets and the prospects for inflationary pay increases have been evident since the spring. Accordingly unless the UK is hit by a negative demand shock over the next six weeks, we view the prospect of a 25bp increase in the Bank rate to 0.50% in November as our new baseline case. 


Study engineering at university if you want to become a billionaire, report suggests

Jeff Bezos, founder of Amazon and the second richest person in the world, studied engineering at university

Students who study engineering or business at university are more likely than their peers to become billionaires, a new study suggests.

Those who have already entered the job market and are either in a sales career or stock trader role are also among the most likely to become part of the world’s richest people club.

The findings are based on a study by the recruitment agency Aaron Wallis, which looked into the richest 100 people in the world to see if there was any correlation between their first careers and how wealthy they became.

It found that the most common first job among the top billionaires – who started in an organisation that wasn’t their own, as opposed to entrepreneurs who started their own company or those employed in a family business – was that of a salesperson.

Read Sophie Christie’s full report here


Lunchtime update: Pound comes off highs ahead of Carney speech

Bank of England governor Mark Carney is due to speak at the IMF at 4pm later today

The FTSE 100 has snapped its losing streak and rebounded back into positive territory this morning as the pound’s rally on currency markets cools.

Ahead of Bank of England governor Mark Carney’s speech at the IMF this afternoon, sterling has dipped slightly, coming off the highs it hit at the end of last week as hopes of an interest rate hike before the end of the year were reignited by the central bank.

A dearth of economics and corporate news means London is devoid of any big stock movements this morning. 

Engineer GKN has jumped 3.2pc to the top of the FTSE 100 on a bullish broker note while defence specialist BAE Systems securing the sale of 24 Typhoon jets to Qatar has lifted it 2.9pc.

At the other end, tobacco stocks are reacting negatively to the FDA changes to its e-cigarette requirements, which broke as trading was closing in Europe on Friday, while gold producers Fresnillo and Randgold Resources trail the blue-chip index as the precious metal’s price continues to retreat. 

It could be the calm before the storm, however. Attention on the markets is beginning to shift to the US Federal Reserve’s key policy decision on Wednesday with investors itching for clues over the US’s own interest rate hiking plans.

Spreadex analyst Connor Campbell gave this preview of the US session:

“Looking to this afternoon, and while there’s no data on the cards it still could be a memorable US session. Even something as meagre as a 0.2% is enough for the Dow Jones to hit a fresh high, with the index on track to open above 22300 for the first time in its history.

“Given it wasn’t too long ago that it was fretting about North Korea, as well as Donald Trump’s (in)ability to deliver on his tax and infrastructure promises – issues that are still very much on the table – it’s remarkable that the Dow has risen so aggressively in the past week or so.”


Interserve hires finance director days after devastating profit warning

Interserve has recently won a five-year contract to provide spectator seating for the Edinburgh Military Tattoo

Support services group Interserve has appointed a new finance director just days after it issued a crippling profit warning.

Mark Whiteling will join the company at the beginning of next month, having recently held a number of non-executive roles at firms including Hogg Robinson and Connect Group.

Shares in Interserve rallied during Monday morning’s trading on the back of the news, climbing as much as 18.71pc to 96.75p.

Mr Whiteling had previously held senior roles at technology firm Premier Farnell. He was also finance director of marketing business Communisis and group finance director of logistics company Tibbett and Britten.

Read Rhiannon Bury’s full report here


Yen falls as Japanese PM considers calling a snap election

Shinzo Abe could call a general election to take advantage of a weaker opposition 

Another little interesting side-note on the forex markets is the Japanese yen, which has plunged into the red against all the leading currencies ahead of the Bank of Japan’s own decision on monetary policy on Thursday.

The currency is under pressure after weekend reports that the country’s prime minister Shinzo Abe is considering to do a “Theresa May” and call a snap election to take advantage of a weakened opposition.

If Mrs May did give the Japanese PM any sage advice on snap elections during her recent state visit, he’s obviously ignored it.


Sterling comes off highs; attention begins to shift towards Fed meeting 

All eyes will be on Fed chair Janet Yellen at her press conference on Wednesday evening

Sterling has slipped slightly on the currency markets this morning as it comes off the highs it hit on Friday following dovish Bank of England policymaker Gertjan Vlieghe’s speech backing the Monetary Policy Committee’s plan to hike interest rates to curb inflation if current economic trends continue.

The pound could be in for another bumpy ride this week against the dollar with Mark Carney due to speak later today and the US Federal Reserve’s meeting on Wednesday to dictate the dollar’s performance on the currency markets later in the week.

The Fed is expected to announce that it will begin to unwind its huge $4.5tn balance sheet but investors will be equally as interested in the central bank’s thoughts on sluggish inflation, which is weighing on the chance of an interest rate hike across the Atlantic before the end of the year.


Petra Diamonds misses targets as Tanzanian worries worsen

Petra recently suspended operations at its mine in Tanzania as the East African country looks to take more control of its mining sector

Shares in Petra Diamonds have slumped 7pc after the FTSE 250 miner reported a disappointing set of results and warned that legal challenges in Tanzania could mean it breaches its debt covenants once again.

The stock slid to 77.50p in early trade after Petra warned that failure to resolve a dispute with the Tanzanian government over diamond exports may result in it breaching two of its covenant measures.

The company said it would “monitor the situation very closely and take decisive action if required”.

Petra had already warned in June that it was in talks with its lenders after suffering a six-month delay at one of its major projects, resulting in it missing production guidance for the year.

Read Jon Yeomans’ full report here

Petra Diamonds

HSBC reverses position on sterling; revises 2017 forecast from $1.20 to $1.35 against the dollar

“We were very wrong.”

That’s how HSBC’s forex team started this morning’s note on sterling to clients, its tail between the legs as the currency smashed the bank’s forecast.

Its strategist David Bloom said that the Bank of England’s “unexpected hunger” to join the ECB and Federal Reserve in beginning to tighten monetary policy had lifted sterling above its estimates, adding that the pound has “happily ignored the political intrigue of Brexit”.

After forecasting the currency to plunge to $1.20 against the dollar by the end of the year, it now believes that it will remain around its current level of $1.35.

The bank does, however, believe that the pound is “likely to weaken in 2018 as the market questions the merit of rate hikes and politics belatedly gets a grip on it”.


Eurozone inflation takes small step in the right direction

Eurozone inflation picked up to 1.5pc in August, Eurostat has confirmed this morning, reversing the downward trend concerning officials at the European Central Bank.

The ECB has been reluctant to signal a shift in monetary policy until inflation starts to rise back towards its 2pc target. After three months of decline or stagnation, the headline figure has finally started to rise again, jumping 0.2 percentage points in the latest estimate. 

Rising prices for transport fuel and accommodation services lifted the headline figure most while Ireland and Greece weighed heaviest on figures in the currency bloc.

The headline rate could begin to fall again in the coming quarters, however, according to Pantheon Macro eurozone economist Claus Vistesen.

He argued: 

“The inflation data in the Eurozone will be driven by two separate stories in the next three-to-six months. The headline likely will fall significantly as base effects push energy inflation lower. The ECB published an estimate earlier today to suggest that headline inflation could fall to 0.9% in the first quarter of 2018. That sounds a little too drastic to us, but we agree with the direction.

“If this forecast is right—and it will be unless oil prices soar—it will create an odd backdrop for the expectations of tighter monetary policy. Core inflation, however, likely will rise slightly providing cover for the ECB to reduce the pace of QE. In particular, we think non-energy goods inflation will increase in Q4 as a lagged response to higher PPI inflation. By contrast, risks are then tilted to the downside in Q1. Services inflation also should edge higher, albeit less so. We look for core inflation in France and Italy to deliver the main upside surprises.” 


Mark Carney speech could help kick-start the pound’s momentum once again

Arch dove Gertjan Vlieghe backing a rise last Friday was seen as an important step towards the Bank of England hiking interest rates

Sterling’s momentum on the forex markets has slowed to a stop this morning but a speech from Bank of England governor Mark Carney this afternoon could kick-start the currency’s recent rally once again.

The pound was lifted to its highest post-EU referendum level against the dollar on Friday after a speech from Gertjan Vlieghe, who is considered the most dovish member of the Bank of England’s Monetary Policy Committee, supported raising interest rates if current economic trends continue.

The Bank of England’s statement on Thursday alongside its decision to hold rates at 0.25pc said that a majority of the central bank’s policymakers backed hiking rates to curb inflation in the coming months and the backing of an arch dove like Mr Vlieghe was seen as an important step towards the MPC voting for a rise.

This morning’s gains on the FTSE 100 could be short-lived if Mark Carney’s speech cements the MPC’s position, according to IG chief market analyst Chris Beauchamp.

He said:

“While sterling’s weakness is giving it some much-needed respite, the gains could well prove fleeting if Mark Carney delivers further remarks this afternoon that follow up on last week’s hawkish turn. 

“Having seen such heavy losses at the end of last week there were bound to be plenty of candidates for dip buying on the index, and with UK stocks still broadly out of favour among institutions this rally could easily have legs,  especially with Q4’s seasonality just weeks away. However, it will all depend on Mark Carney today.”


House prices continue to be dragged down by London 

London continued to drag down the national average

London houses continued to plunge in value in September, dragging down the national average a further 1.2pc in September, fresh data from Rightmove has revealed today.

Only the North East, Yorkshire and the East Midlands saw an increase in prices while London prices fell by 2.9pc compared to the previous month. 

Rightmove said that the number of sales agreed was higher than a year ago, showing that demand remains strong.

House prices reaching their limit after rising for the last six years will be “unavoidable”, said Rightmove director Miles Shipside.

However, he did manage to pick out this silver lining in today’s figures:

“Interest rates cannot realistically drop any further to help buyer affordability, but the potentially good news for buyers’ finances, which have been under attack for years, is that there is some relief from the wage-rise cavalry.

“Average wage rises are now running at nearly double the annual rate of property price rises, and the longer any meaningful differential is maintained then the greater the improvement in buyer affordability.”


Hiscox braces for £110m of Hurricane Harvey claims

Chief executive Bronek Masojada said that the industry can cope with the costs from the two hurricanes

Hiscox said the devastation wreaked by Hurricane Harvey on the United States will cost the insurer $150m (£110m) in claims.

The FTSE 250 firm said the estimate was within the modelled range for a disaster of that scale and was based on an insured market loss of $25bn (£18bn).

It came as the company warned that “natural catastrophes” would run up a big bill for the insurance industry this year, but assured that the sector would be able to cope.

Alongside the aftermath of Hurricane Harvey, America is also grappling with the impact of Hurricane Irma, which made a devastating sweep through the Caribbean before slamming into Florida.

Read the full report here


Ryanair dives after ‘messing up’ pilot holidays

Ryanair has plunged this morning after announcing the cancellations 

The fall-out from Ryanair cancelling 40-50 flights every day for the next six weeks after it bungled its pilots’ holiday schedule has sent its shares diving 3.5pc this morning.

The company’s marketing officer Kenny Jacobs said that the airline had “messed up” their pilots’ holiday schedule but added that less than 2pc of its flights will be cancelled.

Rebecca O’Keeffe, head of investment at Interactive Investor said that the error will be “truly damaging” for the company.

She commented:

“Ryanair is notorious for not caring about what sort of headlines they get, working on the basis that all publicity is good publicity – but not this time. Previously, the carrier was happy to suggest that you get what you pay for and despite negative press lots of flyers embraced the fact that they knew the score and were happy to fly without the frills.

“However, the current situation is truly damaging, with flyers left high and dry with last minute cancellations or apprehensive that they might be affected. Is this a planning issue with Ryanair or is it a shortage of pilots? If the former, then it suggests some truly poor processes. If the latter, then we may see wages rise to fill the gaps. Either way, it’s not good news for Ryanair.”


Global stocks nudge up to fresh all-time high

The rally on European stock markets following a positive session in Asia has lifted the MSCI World Index to a fresh all-time high as investor sentiment continues to normalise and attention shifts to the US Federal Reserve’s latest policy decision on Wednesday.

Let’s take a quick look at the big movers in London this morning.

A quiet morning on the corporate front means engineer GKN and insurer Admiral being lifted by broker notes is enough to take them towards the top of the FTSE 100 leaderboard. BAE Systems’ rise on a Typhoon jet order from Qatar still leads the index early on, however, while HSBC has clawed back some of the ground it lost last week.

Gold’s retreat as risk appetite continues to return to normal has pulled precious metal producers Fresnillo and Randgold Resources to the bottom of the FTSE 100. After jumping to $1,347 per ounce on geopolitical worries two weeks ago the price has retreated back down to $1,315 with the markets giving a muted response to the latest escalation on the Korean Peninsula.

Spreadex analyst Connor Campbell commented on this morning’s rebound:

 “Having been battered in the wake of last week’s sterling super surge, the FTSE is using a quiet Monday morning to claw back some of its losses.   At one point last Friday the UK index hit 7195, its worst price since the end of April. Now it’s trying to push on to 7250, sitting a few points shy of that target after rising around half a percent.

“As for the pound, it has had little reason to really move just yet, instead opening relatively flat against both the dollar and the euro. Not to worry though – that means cable is just below last week’s $1.36-crossing 1 year peak, while against the euro sterling is sitting pretty at a 2 month high.”


Agenda: FTSE 100 rebounds as sterling’s momentum slows

BAE Systems leads the blue-chip index early on

The FTSE 100 has rebounded into positive territory this morning as sterling’s dominance on the currency markets eases, pulling the index off the four-month low it plunged to on Friday as the pound jumped to its highest post-EU referendum level.

BAE Systems is leading the rally early on after Qatar signed a letter of intent to buy 24 Typhoon jets from the defence specialist while engineering firm GKN is following shortly behind after being lifted by a broker note.

Only a handful of stocks have retreated early on with Randgold Resources dropping furthest as gold begins the new week in the red.

There’s little of note on the economics calendar today after last week’s action-packed diary. House prices continued to nudge down, retreating a further 1.2pc in August compared to the previous month, according to Rightmove’s latest data.

This morning, the pound has held onto the strong gains it made at the end of last week after the Bank of England’s MPC gave its strongest hint yet that interest rates will rise this year. Against the dollar, sterling is in flat territory at $1.3575 while against the euro, it has edged up to €1.1374, a two-month high,  ahead of final eurozone CPI figures due at 10am.

Interim results: M. P. Evans Group, Secure Income Reit, Concurrent Technologies, Learning Technologies Group, Ergomed, Medica Group

Full-year results: Bluefield Solar Income Fund, Green Reit, Finsbury Food Group, City of London Investment Group, Petra Diamonds 

Trading statement: Dairy Crest Group

AGM: Ormonde Mining

Economics: Rightmove HPI m/m (UK), NAHB Housing Market Index (US), Final CPI y/y (EU)