A triple-dose of disappointing American economic data has sent shares falling across Europe, with the FTSE 100 down 150 points and the Dow Jones industrial average down 2% in early tradingLatest: Stock markets slidingEarlier: UK unemployment rate hits six-year low 2.51pm BST Investors are continuing to rush into safe-haven government bonds.This is driving down the rate of return (or yield) on US, German and UK sovereign debt.US 10-year yield falls by most since March 2009 (!) and UK, US 10-year both below 2% http://t.co/8m7ZRnitb2 pic.twitter.com/HfYBMFFXkM 2.44pm BST European markets are deeper in the red too, as traders watch the Dow Jones industrial average shed points like theyre going out of fashion.The FTSE 100 is now down 161 points, a 2.5% slide today, to 6226 points. 2.40pm BST DJIA takes out 16,000 and now down 360 points! 2.39pm BST This is sheer panic that Im seeing in the market now, says Betty Liu, anchor on Bloomberg, as the US stock market continues to fell. 2.38pm BST And the S&P 500 index, the broader measure of the US stock market, has now shed all its gains for this year.It is down another 1% in early trading. 2.37pm BST Make that a 310 point drop on the Dow Jones...... 2.36pm BST Make that a 290 point tumble on the Dow.... 2.33pm BST Over in New York, the Wall Street opening bell has been rung, and shares are (as expected) losing ground fast.The Dow Jones Industrial Average has immediately lost 265 points to 16048, a tumble of 1.4%. 2.27pm BST Proper 'growth scare' market sell off happening at the moment. 2.27pm BST Todays slump in Greek bank shares comes just 11 days before the results of the new eurozone bank stress tests are released.Those tests will show whether banks need to raise fresh capital. 2.16pm BST Paul Diggle of Capital Economics says todays shock fall in the US Empire State manufacturing index, to a six-month low of 6.2 in October, is a worry.It adds to the weaker tone of the data and could be the first real sign that the stronger dollar and global slowdown are taking their toll on activity. 2.07pm BST Money is flowing out of shares, and piling into safe-haven government bonds.Thats driving up the prices of US Treasuries and UK gilts, which pushes down the yield, or interest rate, on the debt. 2.02pm BST The US stock market opens in 30 minutes, and analysts predict a selloff. The Dow Jones industrial average could shed another 200 points....US stocks bath on open FUTURES S&P -23.25 NAS - 43 RUSSELL 200 - 10.7 DAX -204 10 TR +1-01.05 2.00pm BST Italian bank shares are now being suspended, after falling too sharply: Italy's Monte dei Paschi di Siena shares suspended after 4.5 pct drop - RTRS 1.57pm BST Another day, another sea of red across Europes markets:-8% now #Greece #aseeverything not awesome. ICYMI http://t.co/Jy6SVU9939 MT @charlesforelle: Greek banks today. NBG -13%, Piraeus -14, Alpha -14, Eurobank -20 1.46pm BST A triple-dose of bad economic news from America just hit the financial markets, driving shares lower.US retail sales fell 0.3 per cent in September, the first decline since January, and rather worse than the 0.1% decline expected. 1.15pm BST US bond prices are strengthening today, pushing down the yield on its 10-year bonds below 2.2%.Traders who sold their Treasuries this year, anticipating that prices would weaken as the Federal Reserve ended its QE bond-buying programme, cant be happy....This. RT @FerroTV: US 10-year bond yield. The pain trade of 2014. pic.twitter.com/cJ04hqKjXE 1.13pm BST Another sign of alarm in the markets, the yield (or interest rate) on Greek 10-year bonds has jumped today, from around 7% to 7.5%.That means traders are pushing down the value of Greek debt, as speculation swirls in Athens about early elections and a possible cabinet reshuffle....Well, hello, #Greece 10yr bond chart! It's been months since I've seen you! How have things been? Not so good, huh? pic.twitter.com/Z4bpmsnxYn 1.10pm BST European stock markets are in retreat again this afternoon, as nervous traders continue to push share prices down.The FTSE 100 has shed another 85 points to 6306, a fresh one-year low. Around half that loss is due to Shire, the pharmaceuticals firm, down 26% as its takeover by AbbVie hits trouble.The sharp decline in the price of crude oil is serving to increase downside risks to inflation in the near-term, 12.55pm BST PricewaterhouseCoopers says the clampdown on European bank bonuses announced this lunchtime will have a major impact:PwC on EBA bonus clampdown "the vast majority of major banks operating in the EU will need to change their remuneration policies" 12.52pm BST Back to this mornings unemployment data.And our economics editor Larry Elliott writes that while the headline numbers look good, the slowdown in employment growth is a concern: You have to go back a long way to find a time when unemployment fell as quickly as it has in the past 12 months. Modern records began in 1972 the year David Bowie released Ziggy Stardust and Mary Peters won gold in the pentathlon at the Munich Olympics and there is no precedent for the 538,000 drop in the internationally agreed measure of joblessness.Unsurprsingly, that was the cue for the government to give itself a pat on the back. Our plan is working, said the prime minister. Britain is fast becoming the employment capital of the west, according to Danny Alexander, the Liberal Democrat chief secretary to the Treasury. 12.42pm BST Michel Barnier, the EU vice-president responsible for the internal market and the services sector, has hailed the EBAs clampdown on banks who are dodging bonus rules:I welcome the EBA's findings on bankers' allowances. Existing rules must be implemented properly: important signal to the rest of society 12.31pm BST The UK Treasury has played a straight bat to the call for banks to stop evading the EU bonus cap. A spokesperson says:We note todays report from the European Banking Authority (EBA), which looks at the practice of paying allowances at banks. We expect to receive the EBAs guidelines on this issue in due course, which will then be subject to public consultation. 12.29pm BST Important news in the banking sector -- Europes top banking regulator has said major banks should not try to get around the EUs cap on bonuses by handing their staff extra payments to top up their pay.The move sets the EBA up on a collision course with no fewer than 39 banks, who are paying their senior staff some allowances to bump up their take-home pay.The ruling of the European Banking Authority (EBA) has implications for 39 financial institutions, thousands of bankers and risks putting the UKs already strained relationship with the EU under further pressure. The chancellor, George Osborne, is already challenging the restriction on bonus payouts in the European court of justice.The announcement by the EBA which is likely to have an impact on UK banks such as Barclays, HSBC and the bailed-out Royal Bank of Scotland raises the prospect of thousands of bankers being denied any further of top-up payments. The regulator did not name any banks as it published its analysis into the way the industry had implemented the bonus cap, which restricts them to 100% of a bankers salary, rising to 200% if shareholders grant their approval. 11.55am BST City economists are rewriting their predictions for when the Bank of England will start to raise interest rates.Todays jobs report, showing weak wage growth, and yesterdays surprise fall in inflation means a rate hike in 2014 looks most unlikely.We are dropping our November 2014 rate hike call. We now consider that a combination of low inflation, international economic uncertainty and the absence of pay pressures means that the MPC will hold off from raising rates until August next year.UBS push back call for a BoE rate hike from November 2014 to August 2015With early wage increases remaining below 1% a year there is clearly no case for early rate increases - and we are pleased that this view is now widely accepted by the financial markets.Following yesterdays weak CPI data, we continue to feel a first interest rate increase is unlikely before next years general election. 11.46am BST The lack of wage growth remains a thorn in the side of an otherwise fairly robust recovery, says Ben Brettell, senior economist at Hargreaves Lansdown.He adds:A year-on-year increase in earnings of 0.7% is nothing to write home about, and remains considerably below the rate of inflation. Many economists predict that we will see wage growth start to come through over the next twelve months or so, but this has been the forecast for a while and it is yet to materialise. The weakness in wages reflects subdued productivity, which has been hamstrung by a lack of capital investment. 11.33am BST Martin Beck, senior economic advisor to the EY ITEM Club, has echoed the TUCs concerns (see here) over Britains weak wage growth: Its a blow to workers, and also to the Treasury, he explains:Despite record employment rates, the traditional relationship between more people in work and faster pay growth still shows little sign of being re-established. Real pay continues to drop, carrying on the trend that began six years ago. Weak pay is bad news for household budgets, but also for the levels of income tax receipts and the UKs fiscal position.Employment rose by a modest 0.1% in the three months to August, while hours worked saw no change. Our estimate of GDP growth at 0.8% over the same period implies output per worker is picking up and, as pay rises are still very weak, unit labour costs should fall. Overall, a sustainable and low-inflation expansion should remain on track. 11.24am BST The PM is tweeting again:Lower unemployment isn't just a number. It's more people with the security of a job and providing for their families. pic.twitter.com/CKSx8Tgodt 11.24am BST The ongoing pay squeeze means that British workers arent sharing in the recovery, says TUC General Secretary Frances OGrady:The real value of wages has fallen again this month. This is not only the longest and deepest pay cut on record but there is no end in sight. Detailed analysis of the figures show that even the cash increase in pay was entirely due to the finance and business sectors. With these never ending falls in living standards and so many new jobs insecure, low-paid and self-employed, Britains workers have been excluded from the recovery. 11.10am BST The London mayors special economic advisor, Dr Gerard Lyons, tweets that Britains unemployment rate needs to fall further, despite hitting a six-year low.Another welcome set of jobs data today for London & UK economy & although unemployment rate still too high it is moving in right direction. 11.08am BST Heres my colleague Angela Monaghans first take on todays jobless report:UK unemployment has tumbled to its lowest level since 2008, when the fall of the US investment bank Lehman Brothers brought the global economy to the brink of collapse.The jobless rate in Britain fell by more than City economists had been expecting, to 6% in the three months to August, from 6.2% in the three months to July. The forecasts had been 6.1%. The last time the unemployment rate was lower than 6% was in August 2008, when it was 5.9%. 11.05am BST And this graph shows how economic inactivity rose in the last quarter, reversing a recent trend: 10.48am BST Charles Levy, senior economist at Lancaster Universitys Work Foundation, is also worried that job creation in the UK economy is slowing:Employment [in June-August] increased by only 46,000, far below the rate we have seen in the past year.That coupled with sluggish wage growth which remained at half the rate of inflation in August should start alarm bells ringing and be the focus of the Chancellors Autumn Statement. 10.34am BST Heres another reason for caution -- the number of people in Britain classed as economically inactive rose by 113,000 in the last quarter, compared to March to May 2014.That helped to drag the unemployment rate down, from 6.2% to 6.0%.Unemployment has continued to fall sharply because slower job creation was dwarfed by a big quarterly rise of 113,000 in the number of economically inactive people, almost half of which is accounted for by a rise in the student population. The fact that the latest fall in unemployment has been driven by rising inactivity rather than job creation explains why the associated fall in the number of people unemployed and claiming job seekers allowance (JSA) is also much lower than in previous months. 10.23am BST Rachel Reeves MP, Labours Shadow Work and Pensions Secretary, flags up that point that pay is still falling far behind the cost of living:A higher minimum wage is one solution, she argues:Working people have seen their real wages fall by over £1,600 a year since 2010. The Governments failure to act on low pay has led to millions of people struggling to get by, huge additional costs in Housing Benefit and Tax Credits paid to those in work, and the OBR warning about the impact on the public finances.Thats why Chuka Umunna and I will call on the Government to adopt Labours plan to raise the national minimum wage to £8 during a debate in Parliament on low pay later today. This is an important part of Labours economic plan to tackle the cost-of-living crisis and ensure we earn our way to higher living standards for all, not just a few at the top. 10.21am BST GMB general secretary Paul Kenny has urged the government to do more to push up living standards: The long-delayed recovery is welcome. It is essential that, as the public finances improve, that money is spent getting the two million still on the dole back to work and restoring living standards. 10.08am BST These five charts also tell the story of Britains labour market.The jobless rate has fallen steadily over the last year, to its near six-year low of 6.0%: 10.01am BST Here are the five main points in todays unemployment report (which is online here). 9.49am BST And heres Liberal Democrat Chief Secretary to the Treasury, Danny Alexander, on todays employment numbers:Our jobs rich economic recovery means that Britain is fast becoming the job creation capital of the western economies. Because our recovery plan is working, so is the country and in record numbers. Every job created is a family made more secure and is another step towards the stronger economy and fairer society that Liberal Democrats are committed to build. 9.48am BST Its great news that Britains jobless total has fallen below the two million mark, the prime minister tweets:The biggest-ever fall in unemployment in history, taking it below 2m, is great news. Our plan is working, but there's still much more to do. 9.45am BST This should go down well in Downing Street: Britain has just recorded its biggest annual fall in unemployment on record.The ONS says:There were 1.97 million unemployed people, 154,000 fewer than for March to May 2014 and 538,000 fewer than a year earlier. This is the largest annual fall in unemployment on record. Records for annual changes in unemployment begin in 1972.Largest annual fall in unemployment since records began in 1972 -remarkable. Critics argue we need quality as well as quantity of jobs.Large fall in unemployment. Best news might be that total hours worked flat on the quarter - possible evidence of some productivity growth. 9.44am BST So UK real wages continue to shrink as growth of 0.7% is behind the 1.5% CPI was in August and the 2.4% RPI was. 9.39am BST Real wages in the UK economy are still shrinking, but there are signs that the gap is closing at LONG last.The Office for National Statistics reports that average earnings in the UK rose by just 0.7% annually in the June-August quarter. 9.36am BST Employment growth has slowed, though, perhaps suggesting that Britains recovery slowed over the summer.The number of people employed in the UK rose by 46,000 in the three months to August, which is the smallest quarterly rise since March-May 2013. 9.35am BST The number of people out of work in the UK fell by 154,000 in the three months to August.That takes Britains jobless total down to 1.972 million. 9.31am BST Breaking: Britains unemployment rate has fallen to 6.0% in the three months to August.Thats the lowest since October 2008, the month in which Lehman Brothers collapsed..... 9.29am BST heads up. UK unemployment data out in 5 mins. Expected flat at 6.1%. Also UK earnings out too. Avg 3mnth wage growth expected 0.7%. $GBPUSD 9.27am BST OK, its nearly time for the main event of the morning, the latest UK employment report.Its due at 9.30am sharp, and will give a new healthcheck on Britains labour market. 9.22am BST Theres a lot of argument about whether the drop in the oil price is good (lower fuel prices, more cash in consumers pockets), or bad (sign of weak demand, a blow to petro-countries).For example:@RichardBarley1 lower oil pricrs are reflationary boosting consumption and corporate earnings therefore very good in current climateDeclining oil prices are a powerful tool for disinflation, which isn't going to help countries that already have depressed core inflation. 9.17am BST Just in.... Italys economy shrank by more than previously thought in the last three months, but didnt actually contract at the start of the year.ISTAT, the Italian statistics body, has revised its data to match new international standards. And it now reckons that:Istat lowers #Italy Final 2Q GDP to -0.3% on Yr vs earlier -0.2%, with new accounting rules. (DJ) 9.14am BST Europes main stock markets have all in the red, today, with London leading the selloff due to the tumble in Shires shares (details).The FTSE 100 is down 77 points, or another 1.2%, at 6316 points.*EURO STOXX 50 INDEX FALLS 10% FROM JUNE HIGH 9.05am BST The oil price has fallen again today, hit by growing concerns that the global economy is slowing.The price of a barrel of Brent oil for delivery in November is down another 1.3% at $83.91, a fresh four-year low.Brent Crude touches new 4 year low below $84Oil getting CHEAP. Brent now just below $84The worlds weakening appetite for oil comes with the market awash with plentiful supplies of crude. Libyas production has recovered strongly even as the country descends further into chaos, while Iraqs oilfields have remained insulated from the violence in the north. Meanwhile, US output remains strong, leading to a glut of supply in the Atlantic Basin and the North Sea. 8.55am BST Shire shares crash 28% after AbbVie reconsiders £34bn takeover bid http://t.co/nJtsZnDd0X 8.42am BST But while Shires takeover wobbles, another UK firm - CSR - is being taken over by a US rival.CSR, the Cambridge-based semiconductor firm, has agreed to be acquired by Qualcomm for $2.5bn (£1.57bn). That trumps an earlier bid from Microchip Technologies, and values CSRs shares at 900p each. 8.25am BST #Inversion Aversion Day ! Shire Down Most Since 2002; Astra, S&N Fall on Inversion Doubt 8.22am BST Shires tumbling share price, and the knock-on effect on other pharmaceuticals firm, has knocked 40 points off the blue-chip FTSE 100.Its down another 0.6%, to 6354 points.Shire move itself (-28%) is contributing to 34pts off the FTSE today alone. Astrazeneca also taking 8pts off FTSE. 8.17am BST 8.15am BST OUCH. Shares in UK pharmaceuticals firm Shire have fallen by more than a quarter as its planned merger with AbbVie appears to unravel.Shares slid by 28% to £36.50, to £14.88, wiping over £8bn off its market value.More than £8bn slashed from market value of Shire, as shares plummet 27% to £37.10 on US bidder AbbVie "reconsidering" £32bn bid..AstraZeneca and Smith & Nephew also showing losses of 3% in early trading 8.05am BST France received another blow overnight, by the way: Fitch put its credit rating on negative watch.Fitch warned that the outlook for the French economy has deteriorate, and that risks to its recovery remain on the downside. It also reckons that Frances debt-to-GDP could peak at 99.7% in 2017. 8.00am BST And heres another sign of deflationary pressures building in China:Producer prices, which measures how much they receive for their wares, fell by 1.8% annually last month.#China | Sept PPI -1.8% y/y ...31st straight month of declines pic.twitter.com/wxHff0MyoV 7.58am BST China inflation at 5-yr low is the main mkt headline, equities set for lower open with Shire seen slumping, oil stabilising after big falls 7.57am BST Chinas consumer inflation has fallen to its lowest level in five years, fuelling fears that the world economy is sinking into a low-growth, low-flation bog.The Chinese consumer prices index slid to 1.6% in September, down sharply on Augusts 2.0%, renewing calls for Beijing to do more to spur Chinese growth and demand.China's inflation falls to 1.6%, a near 5-year low. Sub-1% soon? pic.twitter.com/SK5YUxcWBLThe low inflation readings will open the door to further targeted monetary and fiscal easing. There is also less need for a strong currency to offset imported inflation.Chinas soft inflation profile heightens the risk of deflation, thus requiring further monetary policy easing. 7.52am BST Good morning, and welcome to our rolling coverage of the financial markets, the world economy, business and the eurozone.We are likely to see only another small increase, or perhaps even a slight fall, in employment over the three months to August. Even so, we expect further drops in the workforce to bring the headline ILO unemployment rate down to 6.1%. Meanwhile, headline wage growth may have crept up to 0.7% in August, although this would remain well below CPI inflation of 1.5% in that month. UK labour market stats out at 9.30am. Consensus forecast is unemployment to fall to 6.1% and earnings growth at 0.7%. Continue reading...
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