Seven days in the Square Mile
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.