Trump tax overhaul plan lifts stock markets
Stock markets lifted by Donald Trump outlining plan to slash tax, the biggest overhaul in US tax in decades
Corporation tax will drop from 35pc to 20pc and the number of tax bands will be reduced to three at 12pc, 25pc and 35pc
Mark Carney defends the Bank of England at independence anniversary speech; Gordon Brown and Fed vice-chair Stanley Fischer also scheduled
Mr Carney says that critics "confuse independence with omnipotence"
FTSE 100 retreats as pound jumps higher on Brexit negotiations progress
Icap founder Michael Spencer splashes out on a stake in premium Gilpin gin company
City veteran Michael Spencer has splashed out on a stake in Westmorland Spirits, the owner of a premium gin brand made with unusual ingredients.
The founder of financial services firm Icap, together with fine wine and spirits merchant BI, has acquired a 25pc stake in the London-based company that makes Gilpin's gin.
Mr Spencer bought the stake through IPGL, his private investment group, to take advantage of the booming demand for the spirit.
The investment from the two backers will go towards increasing distribution of Gilpin’s Westmorland Extra Dry Gin and developing new products. Westmorland will also use BI’s expertise and distribution centre to increase exports and enter new markets. Mr Spencer is the chairman of BI.
Read Isabelle Fraser's full report here
Fischer avoids Fed monetary policy in speech; says the central bank's macroprudential tools are not battle tested
Live from 3.15pm: @federalreserve Vice Chair Stanley Fischer on the central banking framework. https://t.co/YsvSdWOYpN#20YearsOn
— Bank of England (@bankofengland) September 28, 2017
FED'S FISCHER DOES NOT COMMENT ON U.S. ECONOMIC OUTLOOK, MONETARY POLICY IN PREPARED REMARKS TO BANK OF ENGLAND CONFERENCE
— Hyung Joong Kim (@Ssouldoc) September 28, 2017
Fed vice chair Stanley Fischer's speech at the Bank of England has turned out to be a bit of a dud and the dollar is as static as it has been all day.
No comments from the outgoing FOMC policymaker on the economic outlook or future Fed policy but he did say that he is concerned that the "US macroprudential toolkit is not large and not yet battle tested".
Here's the conclusion:
"Let me conclude by observing that, while the crisis and its aftermath motivated central banks to reappraise and adapt their tools, institutions, and thinking, future challenges will doubtless prompt further reforms.
"Or, if I may be permitted a few final words on my way out the door, the watchwords of the central banker should be "Semper vigilans," because history and financial markets are masters of the art of surprise, and "Never say never," because you will sometimes find yourself having to do things that you never thought you would."
Fed vice chair to speak at BoE; US stocks nudge down
Just one more potentially market moving speech to come from the Bank of England this afternoon. US Federal Reserve vice chair Stanley Fischer is due to speak at the top of the hour in one of his last ever public appearances as a member of the Federal Open Market Committee.
Mr Fischer said that he will step down from the central bank in October due to personal reasons and his departure was considered a blow to chair Janet Yellen's chances of being selected for another term by Donald Trump. A critic of Mr Trump's plans on deregulation, will he use the platform to take a parting shot?
Markets are now open across the Atlantic and the Dow Jones has nudged down into the red early on.
Are doubts setting in on Mr Trump's tax reform plans?
Accendo Markets head of research Mike Van Dulken explains why markets might be showing a little caution this afternoon:
"It's a cautious market welcome to a US tax reform framework, details still lacking (especially for individuals) and no clarification on how the whole thing will be paid for without increasing the national debt.
"Plus we've been here before with Trump reform (healthcare, infrastructure, deregulation), with next to nothing to show for it, almost a year since the election and 8-month since he took office. Progress, perhaps, but the proof's in the cutting."
Troubled Telit warns investors to expect weaker numbers as it adjusts to life after Oozi Cats
Troubled Telit Communications, the internet of things specialist that lost its chief executive Oozi Cats earlier this summer over his alleged links to a historic fraud, shared more bad news this morning as it reduced its profits and sales forecasts for the year.
In a trading update the firm narrowed its full-year estimates as interim boss Yosi Fait warned of upcoming restructuring costs, but sought to reassure investors over the financial health of the company.
Mr Cats resigned in August after an investigation by law firm Cameron McKenna into reports he was a fugitive from justice for a 25-year-old property fraud in Boston found evidence he had “knowingly withheld” a US indictment.
Telit’s underlying operating profits for the 2017 calendar year are now expected to be between $44m (£33m) and $48m, down 6pc on previous company guidance, according to analysts at Berenberg. Telit made $54.4m in equivalent profits last year.
Read Iain Withers' full report here
US GDP revised up to 3.1pc
A mixed bag of economics figures have dropped this afternoon from the US.
Second quarter GDP has been revised up to 3.1pc on an annualised basis, adding credence to Mr Trump's promise of 3pc growth.
That figure is, of course, just one quarter and initial jobless claims rising above expectations to 272,000 has slightly dampened that upgrade (although the jobs figure is not a complete outlier looking at the last couple of years of data).
Hurricane season is still impacting the labour market figures across the Atlantic, according to Capital Economics.
Its chief US economist Paul Ashworth said:
"The impact of Hurricane Harvey on weekly initial jobless claims is fading, but the impact from Irma is partly offsetting that drop back.
"Looking at the State breakdown, Texas claims declined to 20,000 from 28,000, but Florida claims increased to 18,000 from 10,000. Georgia was also affected by Irma, with a 3,000 increase in claims."
Lloyd's of London faces $4.5bn hurricane bill after profits slide in first half
Lloyd's of London has warned that it faces a $4.5bn (£3.4bn) hit from hurricanes Harvey and Irma after unveiling a profit slide for the first half of the year - before the catastrophic storms had happened.
The world's biggest insurance market said its pre-tax profits for the six months to June 31, a relatively benign period for natural disasters and before Harvey and Irma thrashed the US and Caribbean, had plunged 16pc to £1.2bn amid pressure on pricing, exchange rate movements and a dip in investment income.
That slip came despite the group benefiting from a low number of catastrophe losses during the period, suggesting the final six months of the year - when the hurricanes are factored in - could be particularly tough.
"Anything could happen, we're still in the hurricane season, but we can confirm that with the $4.5bn [estimate] there will certainly be an impact on profit," chief executive Inga Beale told The Telegraph.
Read Lucy Burton's full report here
Concerns mount over future of Bridgend Ford jobs as JLR cancels engine contract earlier than expected
The future of hundreds of jobs at Ford’s Bridgend plant has been thrown into doubt after luxury car maker Jaguar Land Rover confirmed it was ending a contract to produce engines there earlier than expected.
JLR, the UK’s biggest car producer, will terminate its contract with Ford “slightly earlier than expected” in 2020, to break the work in-house.
It is believed the supply deal with Ford will now end in September 2020, as opposed to December of that year.
“While we do not discuss the details of our contractual arrangements, we have informed our unions that Jaguar Land Rover intends to end our petrol engine supply arrangement slightly earlier than expected in late 2020,” said Ford.
Read Jon Yeomans and Alan Tovey's full report
Lunchtime update: Trump tax cuts boost stocks; Carney defends BoE
European stock markets have been lifted this morning by Donald Trump's tax overhaul boosting hopes that the president can keep his promise of improving economic growth.
The president's plan to slash corporation tax from 35pc to 20pc and a one-off tax cut to repatriate foreign earnings has pushed up the dollar on currency markets and brightened the mood on equity markets.
Back in the UK, Mark Carney has defended the role of the Bank of England at the 20th anniversary of the central bank's independence, saying that critics often "confuse independence with omnipotence".
Theresa May used her appearance at the '20 Years On Conference' to vehemently defended the free market in response to Jeremy Corbyn's attack on capitalism yesterday, the prime minister describing it as the "greatest agent of collective human progress ever created".
After retreating against the dollar buoyant from Mr Trump's speech, the pound has rebounded back into positive territory against the greenback after Brexit Secretary David Davis said that "decisive steps forward" have been taken in talks between the UK and EU.
Trump tax cut on repatriated foreign earnings could boost US investment
Donald Trump's one-off tax cut on repatriated foreign earnings currently hiding abroad could boost investment in the US economy, analysts have highlighted.
High tax rates have deterred earnings from being brought back into the country with some estimating a total of around $2.6tn sitting offshore, according to ING.
James Knightley, ING's chief international economist, added:
"If we see a sizeable proportion brought to the US it could boost investment spending (and potentially productivity) and/or incomes if special dividends are paid out.
"The dollar impact may be relatively limited given surveys suggest much of the holdings are already in dollars or dollar-denominated assets held overseas."
Bank of England governor Mark Carney: I am not omnipotent
The Bank of England is not omnipotent and cannot be expected to solve every economic problem in the UK, Mark Carney has warned.
Officials can do their best to keep inflation low and to support jobs and growth, the Governor said, but cannot boost long-term productivity or alter the fate of the nation.
Brexit, Government spending and structural reforms to the economy are much more important in the long-run, he said.
Instead, interest rates can be used to "smooth transitions" and to try to reach the best trade-off between inflation and jobs in a difficult economic climate.
Read Tim Wallace's full report here
Theresa May: Free market economy is the 'greatest agent of collective human progress ever created'
Theresa May has vehemently defended the free market in her speech at the Bank of England this morning in response to Jeremy Corbyn's attack on capitalism yesterday at the Labour party conference.
She said that a free market economy is the "greatest agent of collective human progress ever created".
Mrs May added:
"It was the new combination which led societies out of darkness and stagnation and into the light of the modern age.
"It is unquestionably the best, and indeed the only sustainable, means of increasing the living standards of everyone in a country
"We should never forget that raising the living standards, and protecting the jobs, of ordinary working people is the central aim of all economic policy."
Don't sit on the fence Theresa.
Ryanair faces legal action from regulator over cancelled flights
Ryanair is facing legal action by the Civil Aviation Authority for failing to give adequate advice to passengers after cancelling thousands of bookings.
Late on Wednesday it emerged that the Irish no-frills carrier could be hit with "enforcement action" from the CAA, which claimed it had failed to give passengers necessary and accurate information about their rights after their flights were cancelled, specifically on rerouting and refund expenses.
The regulator said it may take action against the carrier for breaches of consumer protection laws "if necessary".
Read Jon Yeomans' full report here
Will Trump's administration stick to its 20pc corporation tax promise?
Trump can now say to GOPe, "Guys, I tried to help you but #grassroots is too strong! You MUST pass #TaxReform!"
— Bill Mitchell (@mitchellvii) September 27, 2017
Markets are buoyant on the prospect of tax reform but Trump has promised much and is yet to deliver.
UBS analyst Geoff Robinson believes that funding pressure and the need to get the reforms through congress could lead to the 20pc proposed corporation tax nudging up.
He added:
"We expect that the administration is going to have to negotiate terms.
"There are nuanced comments within the tax reform proposals document that provide the policymakers the ability to dial up or down during the process of actioning the tax reform."
Trump tax plans lift the mood on the markets
This is the right TAX CUT @ the RIGHT TIME. We will ALL succeed & grow TOGETHER – as one team, one people, & one American family. #TaxReformpic.twitter.com/rtLWANJjIQ
— Donald J. Trump (@realDonaldTrump) September 27, 2017
Donald Trump's tax reform plans have lifted the mood on markets this morning but the FTSE 100 is the sole party pooper in Europe, remaining stuck in flat territory.
Mr Trump said that the tax overhaul, which will be the US's biggest in decades, will be a "revolutionary change" to make the States more competitive and will be a big win for middle-class workers "as jobs start pouring into our country".
The proposal to slash corporation tax from 35pc to 20pc has clearly won the approval of investors, according to IG chief market analyst Chris Beauchamp.
He added:
"The details are still to be fully worked out, but it is at least nice to see the administration making some attempt to get some work done at last. Whether the Democrats let it through is another matter."
Imperial Brands confirms role in Palmer & Harvey rescue deal
Tobacco giant Imperial Brands has confirmed it is working on a rescue deal for embattled wholesaler Palmer & Harvey.
Imperial told investors it was looking to “create a sustainable future” for Palmer & Harvey, which has been seeking new backers since the summer.
FTSE 100 group Imperial cited its “close trading relationship” with debt-laden Palmer & Harvey, which is the UK’s biggest cigarette supplier.
The announcement follows reports that Imperial and Japan Tobacco International (JTI) are expected to roll over around £60m of outstanding loans to Palmer & Harvey. Such a move would be part of a rescue deal involving private equity firm Carlyle, Sky News reported.
Read Sam Dean's full report here
Mark Carney: 'Bringing inflation back to target too rapidly could cause undesirable volatility'
Bank of England governor Mark Carney: I am not omnipotent.https://t.co/pnNquLwnacpic.twitter.com/PtMNzjZUgk
— Ben (@Jamin2g) September 28, 2017
Mark Carney: Overall, the greater global supply of labour has lowered the relative wages of lower-skilled workers in advanced economies.
— Ann Pettifor (@AnnPettifor) September 28, 2017
After a brief rally before Mark Carney spoke, the pound has dipped again against the dollar and euro following his remarks. Let's pull out a few more highlights from the speech, which the markets have largely taken as falling on the dovish side.
Mr Carney emphasised that the Bank of England mainly has a key role to play in keeping inflation in check, adding that "bringing inflation back to target too rapidly could cause undesirable volatility in output and employment".
Defending the bank's role in the economy, he said:
"After all, even though monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU, it can influence how this hit to incomes is distributed between job losses and price rises."
It's interesting that Mr Carney has chosen to distance the Bank of England from being a major driving force behind the economy's direction and instead highlighted its influence on inflation, which is far above the central bank's 2pc target. Obviously, there are some mitigating circumstance on that one but odd nonetheless.
Mark Carney: Critics 'confuse independence with omnipotence'
Bank of England governor Mark Carney has used the opening remarks at the central bank's independence anniversary to defend its scope to affect the economy, saying that it "cannot deliver lasting prosperity".
Mr Carney argued that those who criticise the BoE "confuse independence with omnipotence" and that the UK's prosperity will be determined by Brexit.
He added:
"Monetary and financial stability are foundational. They are necessary for prosperity but they aren’t sufficient to deliver it.
"The biggest determinants of the UK’s medium-term prosperity will be the country’s new relationship with the EU and the reforms it catalyses. Most of the necessary adjustments are real in nature and therefore not in the gift of central bankers. "
Agenda: Dollar climbs on tax reform hopes; Carney due at speak at Bank of England independence anniversary
Sterling is under renewed pressure from a climbing dollar this morning after US president Donald Trump outlined his tax reform plans with big business cheering a proposal to slash corporation tax from 35pc to 20pc.
The plan, which will also reduce the number of tax bands from seven to just three at 12pc, 25pc and 35pc, led the Dow Jones and S&P 500 higher and pushed the pound down 0.3pc to $1.3365 against the greenback.
Bank of England governor Mark Carney's speech on the 20th anniversary of the central bank's independence due later this morning could help reverse the pound's drift downwards, however.
Global mkts in reflation mode after Trump tax plan. Stocks, Dollar rise, bonds plunge not only due to pro-growth agenda but also strong data pic.twitter.com/R3uTSRjUxf
— Holger Zschaepitz (@Schuldensuehner) September 28, 2017
The markets will have to wait until the afternoon to get their daily fix of economics data with final US GDP figures expected to show that the economy grew at an annualised rate of 3pc in the second quarter.
The FTSE 100 is in flat territory early on with little on the corporate calendar to inspire any big risers this morning. Tour operator TUI has nudged up 0.8pc after brushing aside the impact of hurricane season in its latest figures.
Interim results: Harvey Nash Group, Microsaic Systems, NetScientific, Midatech Pharma, Air Partner, Tissue Regenix Group, Frontier Smart Technologies Group, ECSC Group
Full-year results: Allergy Therapeutics, Produce Investments, Inland Homes, Clinigen Group, Hansard Global
Trading statement: 3i Infrastructure, TUI, RPC Group
AGM: Tavistock Investments, Byotrol, Filtronic, Kainos Group, Foresight 4 VCT, Ilika, NWF Group, MBL Group
Economics: Goods Trade Balance (US), Final GDP q/q (US), Unemployment Claims (US)
