Seven days in the Square Mile

The Week - - City City -

The out­look for the Bri­tish econ­omy was clouded by a slew of poor data. In a big blow for Chan­cel­lor Philip Ham­mond, the Of­fice for Bud­get Re­spon­si­bil­ity re­ported that UK pro­duc­tiv­ity growth in the first two quar­ters was much worse than ex­pected, forc­ing a likely down­grade in growth pro­jec­tions and tak­ing a ham­mer to Ham­mond’s £26bn Bud­get war chest. Mean­while, sep­a­rate of­fi­cial fig­ures showed that Bri­tain’s trade gap hit a record £14bn in Au­gust, be­cause of fall­ing ex­ports to non-eu coun­tries. Man­u­fac­tur­ing and ser­vices sur­veys also in­di­cate slow­ing ac­tiv­ity, and sales of new cars fell in Septem­ber for the first time since 2011. Stock mar­kets shrugged off tur­moil in Spain to con­tinue their gen­er­ally up­ward as­cent. The bull run on Ja­pan’s stock mar­ket passed a mile­stone, with the Nikkei 225 clos­ing at its high­est level in 21 years. The schisms ex­posed at the Tory party con­fer­ence trig­gered fresh spasms in cur­rency mar­kets: the pound fell to $1.30, its low­est level in a month, be­fore bounc­ing back. Agri­cul­ture and Hor­ti­cul­ture De­vel­op­ment Board re­search sug­gested farm prof­its could halve in “a worst case sce­nario” post-brexit. The Govern­ment is fac­ing scru­tiny from Euro­pean reg­u­la­tors over claims it pro­vided il­le­gal state aid to BT. For­mer PM David Cameron took a role with the US elec­tronic pay­ments firm First Data – his first sig­nif­i­cant job since leav­ing No. 10.

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