Seven days in the Square Mile

Business and economic surveys continued to paint a mixed picture of the Brexit fallout. A report from the Bank of England’s regional monitors showed “no clear evidence of a sharp general slowing in activity”; and ONS figures showed that the economy expanded at a good 0.6% pace in the quarter leading up to the vote. A Markit purchasing managers’ survey in mid-july, however, pointed to a “dramatic deterioration”. Martin Weale, a “hawkish” member of the Boe’s policymaking committee, signalled the likelihood of a rate cut next week. Chancellor Philip Hammond said he may “reset” fiscal policy in the Autumn Statement. The US Federal Reserve and the Bank of Japan both met to decide on monetary policy. The Fed was expected to keep rates on hold. Investors expected the BOJ to add to its quantitative easing programme and possibly deliver another cut in rates to further below zero. The sharp drop in sterling threatened to derail the giant “mega-brew” merger between AB Inbev and Sabmiller; investors are unhappy about the structure of the deal. The global financial scandal surrounding the Malaysian state investment fund, 1MDB, intensified; Deloitte resigned as auditor. GSK said it would invest an extra £275m at three UK manufacturing sites, signalling its confidence in post-brexit Britain. The IMF said it would stand by its MD, Christine Lagarde, who faces trial for her handling of a g 400m payment to a businessman while France’s finance minister. Manny Roman, head of Man Group, was recruited by Pimco.