Rolling coverage of the latest economic and financial news, as UK GDP falls for the first time in six months
- Latest: FTSE 100’s worst week since end-October
- US retail sales and consumer confidence fall
- Victory for small UK firms in Covid-19 insurance case
- Introduction: UK economy contracted in November – first time since April
- Smaller fall than economists feared
And finally….Britain’s FTSE 100 index has posted its worst week since the end of October.
The blue-chip index has fallen nearly 1% today, closing 66 points lower at 6735.
“Hard on the heels of the poor US employment data comes a disappointing retail sales number for December. Estimates were for it to be flat, but it fell by 0.7%.
The November number was revised down as well, making it a painful year end for the retail sector. It’s hard to think that the start of 2021 will show any improvement unless Biden can get cash into people’s pockets quickly.”
Related: 'No time to waste': Biden unveils $1.9tn coronavirus stimulus package
Much of the gains that there achieved recently were in anticipation of Biden’s stimulus announcement. Lofty equity valuations combined with concerns that countries are going to extend their lockdowns have encouraged traders to exit the market.
Pfizer said the rolling out of its vaccine in Europe will be slowed in the near-term as the pharma giant upgrades its production facility, the news is playing into the bearish move too.
Stocks are in the red as dealers are cutting back on their equity positions now that Biden’s relief package has been announced.
It is a little worrying that retail sales fell by 0.7% in December, the all-important shopping month. The November metric was revised from -1.1% to -1.4%. In addition to that, the New York Fed manufacturing reading for January was 3.5, the lowest in seven months. Lately there has been growing evidence the US economy is cooling and today’s reports adds weight to that view.
Related: UK edges towards double-dip recession as GDP falls 2.6%
Related: Why the GDP hit from UK lockdown 2.0 was smaller than expected
Related: Small businesses win Covid insurance payouts after UK supreme court victory
Related: Spanish snow storm leads to UK salad shortage
Related: Amazon.com and 'Big Five' publishers accused of ebook price-fixing
Related: The Gym Group reports 48% revenue fall under Covid lockdowns
The oil price is also dropping today, with Brent crude shedding 2.6% to around $55 per barrel.
Reuters reports that concerns about the latest lockdowns imposed in Chinese cities are pushing oil lower, alongside the general risk-off mood in the markets today.
