Yahoo Finance Pound surges to become best performing currency this year
The pound has surged to become the best performing currency among developed economies this year with the Bank of England expected to carry on raising interest rates.
Sterling has gained 2.3pc against the dollar this year, ahead of all others in the so-called G10 group of major economies.
Over the last month, the pound has gained 3pc against the dollar - surpassing even all currencies in emerging economies - and flying in the face of scepticism about the outlook for the UK economy.
Both the Bank of England and Office for Budget Responsibility have improved their outlooks over the last month, with the latter saying the UK will avoid a recession this year.
Francesco Pesole, FX strategist at ING, said: "The pound is set to be the best-performing currency of the first quarter of 2023, having gained 2.5pc against the dollar.
"Along with the improvement in the economic outlook, sterling is definitely drawing benefits from the market’s conviction that the Bank of England will need to continue raising rates."
Traders are betting there is a 75pc chance that interest rates will increase by 0.25 percentage points in May. They are pricing in a 52pc chance of another hike of the same amount in June.
It comes as a closely watched measure of inflation in the US slowed sharply last month, suggesting the Federal Reserve may be close to ending its aggressive programme of interest rate rises.
The pound has fallen 0.1pc against the dollar today, just below $1.24, but has gained 0.2pc against the euro, which is worth just less than 88p.
06:51 PM
Have a lovely weekend!
That's all from me. We'll be back on Monday morning with the latest news.
Until then, here's a piece of market wisdom to end your week...
In markets, you more often than not don’t have the luxury of being confident. You have to go with likely, even if you’re not highly confident in that likelihood. https://t.co/LNhSqUkoXk
— Dow (@mark_dow) March 31, 2023
06:44 PM
Staff at NHS outsourcer Capita locked out of computers amid cyber attack fears
In case you missed it: an outsourcer that works with the NHS and handles the BBC licence fee has suffered an IT outage, fuelling speculation of a possible cyber attack.
Staff at Capita were unable to log into their computer systems on Friday, with the company confirming it was investigating a “technical issue”.
Employees have been told not to try and reset their passwords or use virtual private networks (VPNs) to attempt to log in.
Capita says the outage is affecting its Office 365 deployment.
Microsoft's status page is clean and green, and seems to have been all day.— Gareth Corfield (@GazTheJourno) March 31, 2023
The circumstances have led to speculation that one of the country’s biggest government outsourcers may have been hit by a cyber attack.
Senior technology reporter Gareth Corfield has the full details.
06:36 PM
Swiss National Bank rolls out 'digital francs' to selected commercial lenders
The Swiss National Bank plans on issuing tokenised, digital francs to certain commercial lenders for a limited period.
The central bank plans on studying how transactions can be completed with the help of cnetral-bank digital currency (CBDC).
The latest experiment comes after the Swiss National Bank successfully connected its interbank payment system to a distributed ledger in 2020, Bloomberg reported.
Andrea Maechler, member of Swiss National Bank's governing board, said the digital francs will be tested with selected market participants.
Speaking in Zurich, she said: "Due to the potential of DLT [distributed ledger technology] and tokenisation, the SNB sees the need to thoroughly study secure and efficient payment processing in a token ecosystem.”
No decision on whether the central bank plans to issue permanent digital francs has been made.
Ms Maechler added: “[T]his is about acting prudently and with foresight so that we can continue to fulfill our mandate in the future.”
No decision on whether the central bank plans to issue permanent digital francs has been made.
06:23 PM
London wins just second listing of the year amid stock market exodus fears
An Australian finance company is gearing up for a £200m London listing in a boost for the City’s beleaguered stock market.
Banking correspondent Simon Foy has the story:
Prism Global, a financial infrastructure group, is poised to become just the second main market listing on the London Stock Exchange (LSE) this year amid fears that the Square Mile is losing its status as a key global financial centre.
The company is working with lawyers at Baker Mckenzie on a direct listing that is expected to value the business at around £195m, City sources said.
The float, which is set to take place in April, represents a rare vote of confidence in the LSE, which is fighting to remain relevant after an exodus of companies leaving for the New York stock exchange in recent months.
Building materials giant CRH became the latest company to flee the London stock market in March, while British technology darling Arm has also snubbed the City for its listing.
And yet one City manager has warned that the Square Mile has become a “backwater” of global stock markets...
06:00 PM
Apple wins legal challenge against UK's competition regulator
The Competition and Market Authority acted beyond its powers when it opened an investigation into Apple's mobile browser and cloud gaming services, a competition court has ruled.
The Competition Appeal Tribunal has unimously allowed Apple's challenge against the regulator, finding that the probe was launched beyond specified time-limits.
It comes after the Competition and Market Authority opened a full market investigation into Apple and Google in November.
In an earlier report on mobile ecosystems, the watchdog accused the tech giants of holding an "effective duopoly" on cloud gaming and mobile browsing, harming users experiences.
The CMA is "disappointed" with the latest ruling and is considering appealing the decision. It said:
We are disappointed with today’s judgment. We made this market investigation reference to make sure that UK consumers get a better choice of mobile internet services and that UK developers can invest in innovative new apps. Our concerns, and the reasons why we launched our market investigation, were not challenged by Apple.
Today’s judgment has found there are material constraints on the CMA’s general ability to refer markets for in-depth investigations. This risks substantially undermining the CMA’s ability to efficiently and effectively investigate and intervene in markets where competition is not working well.
Given the importance of today’s judgment, we will be considering our options including seeking permission to appeal.
05:33 PM
Civil service union boss seeks Government settlement ahead of passport office strike
The Government's approach to the civil service pay dispute has been "insulting", the leader of the Public and Commercial Services Union has said.
PCS general secretary Mark Serwotka has called for urgent talks with the Government ahead of a five-week strike of Passport Office workers, starting Monday.
The dispute sees union members in the civil service demand better pay, pensions and working conditions.
He said in a letter to Jeremy Quin, Paymaster General and Cabinet Office minister:
You have the capability to prevent it (the disruption) by sitting down with PCS and working out a settlement.
When we met, you led us to believe, as have your officials in the weeks since then, that serious negotiations to resolve this dispute would take place but, weeks later, they still have not begun.
The level of industrial action in the civil service reflects the strength of feeling amongst PCS members on the issues in dispute and the suffering caused by the cost-of-living crisis that they are facing.
These are hard-working public servants who helped carry this country through a pandemic and they deserve to be treated fairly.
05:13 PM
FTSE 100 ends week on a high
The FTSE 100 has ended the trading week on a high. The index rose 0.15pc after a choppy session, closing at 7,631.74.
The FTSE 100 grew 3.06pc over the last week of March, although is yet to reverse the losses sparked by the banking crisis earlier this month. The blue-chip index is down 3.58pc on the month.
Meanwhile the FTSE 250 mid-cap index closed 0.11pc higher at 18,928.30. The domestically-focused index shed 4.74pc over March.
04:45 PM
Make banking 'boring' again, says Elizabeth Warren
US senator Elizabeth Warren has called for banking to be "boring" again after the failures of Silicon Valley Bank and Signature Bank.
"What I want to do is get banking back where it ought to be, and that is boring," she told CNBC.
Ms Warren and several other senators have introduced a bipartisan bill designed to claw back compensation from failed bank executives and "align the incentives." She said:
The whole idea is to say to these CEOs going forward, if you load this bank up on risk and the bank explodes, you're going to lose that fancy bonus, you're going to lose that big salary, you're going to lose those stock options.
The senator noted that if bank bosses "want to roll the dice" and take big risks, they shouln't be in banking. Instead they should focus on "steady profits" which don't put depositers and small businesses at risk.
She also called to raise deposit insurance for the Federal Deposit Insurance Corporation, although stressed that those who take advantage of this should have to "pay for it".
Ms Warren echoes calls from President Joe Biden, who said yesterday that he wants to reinstate tougher banking rules weakened during the Trump administration.
04:21 PM
BBC journalists to strike on local election night over planned radio cuts
BBC journalists will strike on the local election night in May in response to planned cuts to local radion, the National Union of Journalists (NUJ) has announced.
The union said that industrial action comes in response to plans by BBC management to reduce local programming, which will result in number of job losses and require journalists to re-apply for their own jobs.
BBC management reportedly wants local radio stations to share programmes across the network on weekends and weekday afternoons, reducing the local programming to over 100 hours per week to only 40.
NUJ members in England will stage 24-hour walkout on May 5 to coincide with the reporting of local election results. The union has approached the arbitration service Acas to see if it can help resolve the row.
It comes after BBC journalists in radio, TV and online striked on Budget Day earlier this month, impacting the broadcaster's coverage.
Paul Siegert, NUJ national broadcasting organiser, said:
Video didn't kill off radio and nor will digital. We understand that digital services need to be improved but it shouldn't come at the expense of local radio which is at the heart of the BBC's public service remit.
To go from over 100 hours a week of local programming on every radio station down to just 40 is unacceptable. People want local, relevant news that is accessible and NUJ members are prepared to stand up and fight for that.
Once local radio stops being local then it is the beginning of the end and BBC bosses don't have the right to destroy an institution that has existed for over 50 years.
04:06 PM
Hungary poised to miss deadline for legal reforms
Hungary is unlikely to meet its self-imposed deadline to overhaul its judiciary as required by the European Union, further delaying access to €28bn (£24.6bn) in so-called cohesion funds.
Prime Minister Viktor Orban’s government in November pledged to implement key judicial reforms - designed to bolster independence and the rule of law - by the end of March. However, the changes have yet to be made.
The reforms would unlock access to cohesion funds meant to boost poorer regions in the EU, as well as Covid recovery loans worth billions of euros.
It comes after the EU blocked much of the new funding earmarked for Hungary over concerns of political interference in court cases.
The EU doesn’t expect that the issue will be resolved on Friday since the European Commission, the bloc’s executive arm, isn’t fully satisfied with the proposed changes, Bloomberg reported.
Hungary justice minister Judit Varga said that the country has met the "most" of the 27 milestones required by the bloc. She wrote on Facebook:
Were it up to us, everything would be delivered on time, to this very day.
Most of the 27 super-milestones have already been met without being challenged by the EU institutions.
Judicial negotiations are on the home stretch, there are no outstanding political issues and the ball is now in the Commission's court.
We remain ready for constructive professional dialogue. Our goal is to ensure that the Hungarian people get the EU funds they deserve as soon as possible.
03:31 PM
Handing over
Right, that's all from me for this week - where relative calm has been restored after an, ahem, turbulent start to the month.
Adam Mawardi will guide you from here into the weekend.
I leave you with this word of warning on the latest inflation data from the US.
The annual personal consumption expenditures price index (PCE) slowed to 5pc in February from 5.3pc a month earlier, according to data released today by the Bureau of Economic Analysis.
It is the Federal Reserve's preferred measure of inflation and when you look at the difference between CPI figures - the next of which are due out on April 12 - you can see why:
Interested in looking at US inflation? All you need to decide is: (i) over what period do you want to look; (ii) which categories will you drop for your preferred "super core" metric; (iii) oh yeah, there's also the small issue that CPI and PCE look totally different. Enjoy... pic.twitter.com/jewG3M11Oh
— Robin Brooks (@RobinBrooksIIF) March 31, 2023
03:23 PM
Biden hails 'good progress' on US inflation
Here is a statement from President Joe Biden following data showing that a closely-watched measure of inflation cooled in February:
We are making progress in the fight against inflation. Today's report shows annual inflation down by nearly 30pc from this summer, against a backdrop of low unemployment and steady growth.
The fight against inflation isn't over, and every day my administration is working to give families more breathing room.
After decades of talk in Washington, we are taking historic action to lower prescription drug costs for seniors, capping insulin at $35 and allowing Medicare to negotiate lower prices. In February we saw the lowest food inflation in nearly two years.
Just as we are working to bring costs down, we are working to build America up by investing in strong supply chains and good jobs here in America.
My Investing in America agenda is creating good-paying jobs for the long term – good jobs in every community whether or not you have a four-year college degree. These are jobs that we can be proud of as we rebuild the country with modern infrastructure, supply chains, and manufacturing here at home.
We should continue to invest in America from the middle out and the bottom up. This is not the time to turn back to trickle-down economics by cutting American manufacturing and other critical programs American families count on, just to pay for tax cuts for the wealthy, Big Pharma, and Big Oil.
The last thing our economy needs right now is the reckless threat of a chaotic default. Those threats must be taken off the table.
03:12 PM
ECB may still have ‘a little way to go’ on rates, says bank chief
The European Central Bank may still have a little way to go on raising interest rates, a top official has said after data showed persistent upward pressure on prices for core goods and services in the eurozone.
Governing Council member Francois Villeroy de Galhau appeared to show the central bank is confident about raising rates despite the recent turmoil in the banking sector.
He told German newspaper Frankfurter Allgemeine Zeitung:
Although we have completed most of our rate-hiking journey, we may possibly still have a little way to go.
After that, we need to stay the course for as long as necessary.
Consumer prices in the eurozone fell to 6.9pc in March, a provisional estimate from the statistics agency Eurostat shows.
Mr Villeroy added: "We will only win the battle against inflation once we have also dealt with underlying inflation."
02:55 PM
Tesco to become peat-free on all UK bedding plants
Tesco has said it will be the first UK retailer to go peat-free on its British-grown bedding plants in a move designed to lower its carbon footprint.
Britain's biggest supermarket announced in March last year that it was reducing its use of the material by 95pc from April 2022, and it will stop all use of peat in the range from Monday.
It said it would have made the move to a 100pc peat-free range sooner, but a peat-free alternative was not available at the time.
Plant suppliers to Tesco Bridge Farm Horticulture, based in Spalding, Lincolnshire, are using alternatives such as wood fibre and natural by-products for the bedding plants.
Peat is a layer of soil made primarily of partially decomposed plant material which has developed in waterlogged and low oxygen conditions.
Peat bogs are a carbon sink, meaning they soak up carbon dioxide emissions, helping in the fight against climate change.
02:33 PM
Wall Street opens higher as inflation cools
US markets have risen at the opening bell after data showed inflation slowed in February, suggesting the US Federal Reserve may be nearing the end of its programme of steep interest rate rises.
The Dow Jones Industrial Average climbed 0.5pc after the opening bell to 33,019.94 while the broad-based S&P 500 lifted 0.4pc to 4,064.94,
The tech-focused Nasdaq Composite has risen 0.3pc to 12,046.18.
02:26 PM
Fewer electric vehicles to receive US tax credits in blow to Biden
Fewer new electric vehicles will qualify for a full discount this year in a blow to Joe Biden's green ambitions.
Drivers will be unable to claim a full $7,500 federal tax credit later this year, and many will get only half that, under rules proposed today by the US Treasury Department.
The rules, required under last year's Inflation Reduction Act, are likely to slow consumer acceptance of electric vehicles and could delay President Joe Biden's ambitious goal that half of new passenger vehicles sold in the US run on electricity by 2030.
Mr Biden's administration concedes that fewer electric vehicles will be eligible for tax credits in the short term because of the rules, which set standards for where EV battery parts and minerals come from.
01:48 PM
Wall Street expected to open higher after inflation data
US stock markets are expected top open higher after a closely watched measure of inflation slowed in February, supporting hopes of a softer monetary policy approach from the Federal Reserve.
The report from the Commerce Department showed the Personal Consumption Expenditure (PCE) index, which is the Fed's preferred inflation gauge, rose 0.3pc in February, on a monthly basis, compared with a 0.6pc rise in January.
Traders' bets of a 25-basis-point rate hike stand at 55.5pc, with odds of a pause at 44.5pc, according to CME Group's Fedwatch tool.
The Dow Jones Industrial Average and the S&P 500 are on track to open 0.4pc higher. Futures on the Nasdaq 100 have risen 0.3pc.
01:41 PM
Inflation metric for US slows in February
Inflation fell last month across the US, according to a closely watched metric, suggesting the Federal Reserve may be closer to ending its aggressive programme of interest rate increases.
Consumer prices rose 0.3pc from January to February, down from a 0.6pc increase from December to January, according to the Commerce Department.
Compared to the same time last year, prices rose 5pc, slower than the 5.3pc annual increase in January.
The report also showed that consumer spending rose 0.2pc from January to February, a drop from a month earlier but an indication that households are still providing fuel for economic growth.
Core PCE YoY at 4.6% v/s 4.7% expected, 4.7% prior$USD initial reaction bearish - support ~102 $DXY https://t.co/MiLjK7TQR3 pic.twitter.com/v5ods53a8h
— James Stanley (@JStanleyFX) March 31, 2023
01:26 PM
Rolls-Royce mini-nukes head ousted as new boss overhauls top team
The head of Rolls-Royce's mini-nukes project has been ousted as part of a wider shake-up of its top team by the company's new chief executive.
Industry editor Howard Mustoe has the latest:
Rolls-Royce said Tom Samson, head of its small modular reactor (SMR) developer, would leave with immediate effect, with its finance boss also departing abruptly.
It comes after Tufan Erginbilgic, who became chief executive in January, called the FTSE 100 jet engine maker a "burning platform" in a speech to staff.
He subsequently launched a strategic review of the business and said shareholders would not receive an annual dividend for 2022.
Mr Samson, who joined Rolls's project to make mini-nukes in 2020, leaves as the company battles to win contracts for the power plants.
Read what the company said about his departure.
01:12 PM
Britain risks becoming ‘tech colony’ of US and China, Sunak warned
Rishi Sunak has been warned that Britain risks becoming a "tech colony" of China or the US without Government support for the domestic semiconductor industry.
Senior technology reporter Matthew Field explains why:
Nigel Toon, chief executive of British chip company Graphcore, has written to the Prime Minister, Chancellor Jeremy Hunt and Michelle Donelan, the Technology Secretary, urging them to commit to more funding for "home-grown" chip suppliers.
Mr Hunt promised to spend £900m on high-tech AI computers in the Budget and Mr Toon has urged the Chancellor to earmark a "large percentage" towards spending with British chip companies.
In his letter to ministers, Mr Toon wrote: "We are concerned that unless a significant portion of the budget is explicitly earmarked for UK-based suppliers, this funding commitment will quickly be consumed by digital giants like US-based chipmaker Nvidia."
Without support for British AI computing, there was a "risk that we just become a tech colony… we just become dependent on the US or China for technology and our ability to produce it is carved out," Mr Toon said.
Read why microchip manufacturing has become an increasingly political issue.
12:40 PM
Oil rises as Iraq oil shutdown continues
Oil is heading for a weekly surge of about 7pc as an ongoing disruption to Iraqi exports tighten the market ahead of US inflation data.
West Texas Intermediate futures have risen about 0.7pc to nearly $75 a barrel today after closing almost 2pc higher in the previous session.
Brent crude, the international benchmark, has gained 0.5pc and is heading towards $80, having risen about 5.5pc over the last week.
Prices have been supported this week by the ongoing shutdown of Iraq's oil exports following a dispute between Baghdad and Kurdistan.
The impasse has worsened, as Gulf Keystone Petroleum is to become the latest producer to cut production.
Talks between officials from Kurdistan and the Iraqi federal government are set to take place next week, which may see the resumption of over 400,000 barrels a day of Iraqi oil exports which go through Turkey.
12:15 PM
Amazon workers to hold more strikes in pay dispute
Amazon workers are to stage fresh strikes in an escalation of a dispute over pay.
The GMB union said more than 500 of its members at the online giant's site in Coventry will walk out for three days from April 16 and again from April 21-23.
The six days of action follow a series of stoppages earlier this year.
The GMB also announced it will be balloting its members at five more Amazon sites across the Midlands for strikes over pay.
Voting started on today at the sites in Leicestershire, Nottinghamshire, Staffordshire and Warwickshire.
Amanda Gearing, GMB senior organiser, said: "Industrial action is growing and this could fast become a summer of strike chaos at Amazon."
12:07 PM
Bond markets have best month since 2008
Bond markets in the US are headed for their best month since 2008.
US Treasuries have had a blockbuster month, with the two-year yields down a whopping 68 basis points to 4.11pc, the biggest monthly decline since the financial crash.
Ten-year yields were 35 basis points lower this month to 3.56pc, confounding those thinking they would rise. Bond prices rise as the yields fall.
Ted Pincus at Switzerland-based hedge fund Mangart Capital, said:
Everyone that was short bonds was trounced.
That's the problem when you have these kinds of rapid moves. Stop losses exacerbate the pain.
In the UK, the yield on two-year gilts have fallen 21 basis points to 3.46pc over the last month, with the 10-year yields down 29 basis points to 3.57pc.
11:46 AM
Heathrow operating as usual despite security staff strike
Heathrow has said the airport was operating as usual today despite cancellations amid a strike by security guards in a dispute over pay.
Around 1,400 members of Unite will be on strike for 10 days, covering much of the busy Easter weekend, after last-ditch talks broke down on Thursday evening.
Picket lines were mounted outside the airport and Unite said the strike was being "well supported."
The airport said its contingency plans were working well, although some British Airways flights are expected to be cancelled.
By mid-morning a total of 42 flights to and from Heathrow on Friday had been cancelled, according to the airport's website.
The airport's chief executive John Holland-Kaye told Sky News that the airport was "operating as normal", with agency staff, security officers and managers helping out to "keeping the airport running smoothly".
11:38 AM
Government subsidies for Bulb sale 'targeted, proportionate and effective,' says judges
Judges said it was "reasonably open" to the Government to conclude that providing funding to support the Bulb sale "sought to reach its objective while minimising negative effects on competition".
They also said it was open to ministers to find that subsidies provided were a "targeted, proportionate and effective" response to the "severe economic disruption and volatility caused by the Russian invasion of Ukraine.
In their ruling, judges concluded about the Bulb sale:
We are entirely satisfied that the Secretary of State was reasonably entitled to conclude that the M&A process had been conducted as an 'open, non-discriminatory and competitive' bidding process such that he could treat the only bid which had emerged from the process as a fair reflection of the value which the market placed on Bulb's business in the prevailing circumstances.
They said that in its decision-making the Government had been "entitled to conclude that a 'hard close insolvency' of Bulb would give rise to social hardship to Bulb's customers".
The judges added: "In that eventuality Bulb's customers would lose access to any form of customer service, customers would lose their credit balances and those on pre-payment meters, who were most likely to be vulnerable and 'fuel poor' would face the risk of being left with no energy at all."
11:22 AM
British Gas owner says Bulb deal 'creates serious risk for taxpayers'
British Gas owner Centrica said the ruling was "disappointing" and that it would now "consider our options". A spokesman said:
We think state bailouts for energy companies puts a burden on the UK taxpayer and is avoidable.
We felt the original bailout of Bulb was unnecessary and the National Audit Office report this week concluded there were risks and uncertainties in recovering these funds from Octopus."
The decision to bring this case was made after failed attempts to obtain transparency on the terms of the transaction and the level of state bail out being offered to Octopus/Bulb.
We believe that the way the deal was structured creates serious risk for taxpayers and energy consumers and will distort the energy market.
It is understood that Scottish Power will not seek to appeal the ruling.
11:16 AM
Energy suppliers lose High Court challenge over Bulb sale
Three major energy suppliers have lost their High Court challenge over the Government's handling of the sale of collapsed energy firm Bulb.
Scottish Power, British Gas and Eon claimed an "unfair sale process" led to decisions "to commit billions of pounds of taxpayer money to facilitate the acquisition of a failed business" by rival firm Octopus Energy.
The three businesses brought legal action against the Government, alleging its decision-making process was "flawed and unlawful".
But in a ruling today, Lord Justice Singh and Mr Justice Foxton rejected the legal challenge.
The judges concluded: "In circumstances in which the Octopus transaction was the only bid to emerge from a lengthy M&A process which the Secretary of State was entitled to conclude was open, transparent and competitive, that was an assessment lawfully open to the Secretary of State."
11:06 AM
Shares in Trump-linked companies surge
Shares in companies with links to Donald Trump are surging after he became the first former US president to face criminal charges.
Digital World Acquisition Corp, a company that is merging with his Trump Media brand, has rallied as much as 16pc in US premarket trading following the indictment.
Most of the companies making gains are media businesses or connected to his presidential campaigns.
Mr Trump compared his criminal indictment to a “witch-hunt” as he warned that it would "backfire massively" on US President Joe Biden.
Software company Phunware, which worked on Trump's 2020 reelection campaign, jumped as much as 5.6pc.
Rumble, the Peter Thiel-backed conservative video network, surged 19pc.
The moves in the markets come as protesters have already taken to the streets in New York, with police warned to expect clashes.
10:43 AM
ECB will keep raising rates as core inflation persists, say economists
Policymakers at the European Central Bank won't read too much into the drop in headline inflation in March and will be more concerned that the core rate hit a new record high, according to economists.
Jack Allen-Reynolds, deputy chief euro-zone economist at Capital Economics, said:
Headline inflation probably won't change much in April but it should fall further in May and beyond as energy inflation drops further below zero and food inflation starts to decline.
We suspect that the core rate is at or close to a peak and that non-energy industrial goods inflation will ease significantly as the improvement in global supply chains feeds through.
But other data published this morning showed that the euro-zone's labour market remains tight – the unemployment rate was unchanged at 6.6pc in February – and the timelier surveys point to continued increases in employment.
That should keep wage growth and, in turn, services inflation strong. As a result, we expect the ECB to keep raising interest rates, taking its deposit rate to a peak of 4pc.
The ECB's deposit rate stands at 3pc.
10:33 AM
Underlying inflation rises in euro zone
Euro zone inflation plunged by the most on record, but a new high for underlying price gains highlighted the tricky task facing the European Central Bank as it decides how far to lift interest rates.
Consumer prices rose 6.9pc from a year ago in March — down from 8.5pc in February.
The slowdown was driven by a steep retreat in energy costs from the eye-watering levels they reached after Russia attacked Ukraine last year.
However, core inflation, which excludes such volatile items, quickened to 5.7pc, showing the currency bloc's worst-ever price spike is far from over.
Such opposing forces can be seen in the region's biggest economies, with underlying price growth barely budging in Spain even as the headline measure almost halved to just 3.1pc.
🇪🇺 Euro area headline inflation fell to 6.9% in March (from 8.5%), but core inflation rose to 5.7% (5.65%😅).
Core goods eased 20bp (to 6.6%) while services rose 20bp to an all-time high of 5%. Expect more of the same in coming months - core disinflation, sticky services. pic.twitter.com/CLzO4YvW9x— Frederik Ducrozet (@fwred) March 31, 2023
10:20 AM
Elon Musk to visit China as Tesla's electric vehicle crown slips
Elon Musk is making plans to visit China as early as next month, according to reports, amid delays to plans to more than double production capacity at Tesla's plant in Shanghai.
The electric vehicle maker's chief executive is also seeking a meeting with China's Premier Li Qiang as he aims to shore up support in his company's second largest market.
It would be Mr Musk's first visit to China since the pandemic.
He last visited China in early 2020, when he set the internet abuzz by dancing on stage during an event at the Shanghai factory.
It comes as Tesla grapples with competition from Chinese rival BYD, which is backed by Warren Buffett.
It stole Tesla's crown last year after selling more electric cars, giving it a market share of 20pc of all battery-electric vehicles sold compared to Tesla's 10pc.
It also comes after China threatened to block Mr Musk's Starlink with a rival fleet of 13,000 satellites amid claims they pose a potential military threat and could spy on the Communist country.
A new academic paper published in the military-sponsored Journal of the Chinese Society of Command and Control suggested that lasers and microwaves should be used to shoot down Starlink satellites.
09:51 AM
Inflation in France falls to six-month low
French inflation slid in March to a six-month low - though by slightly less than forecast - as a sharp drop in energy price inflation helped offset surging food prices, preliminary official data showed on Friday.
Consumer prices rose 0.9pc in March, bringing the 12-month inflation rate to 6.6pc, down from 7.3pc in February, according to EU-harmonised data from France's statistics agency INSEE.
Energy prices rose 4.9pc this month after an increase of 14.1pc in February when a 15pc hike in regulated electricity prices took effect.
However, food prices kept climbing, reaching a record high of 15.8pc after 14.8pc in February following an agreement for a 10pc increase in negotiated prices between big food retailers and their suppliers from the start of March.
German inflation also eased in March on the back of lower energy prices but still came in above forecast, adding to pressure on the European Central Bank to further tighten its monetary policy.
09:25 AM
NCC shares tank as companies to cut cyber security spending
Cyber security business NCC Group has suffered a 48pc fall in its share price after warning that the collapse of Silicon Valley Bank had forced companies to rethink their spending plans.
The Manchester-headquartered company has cut its profit expectations and warned it expects challenges to continue this year.
It blamed the gloomier outlook on a "deterioration in the macro-economic and market environment" and rising interest rates "creating further inflationary challenges for clients".
It added: "Turmoil in the Banking sector following the failure of Silicon Valley Bank has further knocked market confidence leading to reduced appetite to spend on technology projects across sectors."
It cut its operating profit expectations from around £47m to between £28m and £32m.
09:08 AM
Gas prices headed for strong week
Gas prices are headed for a weekly gain amid an expected recovery in demand and forecasts of cold weather.
European benchmark contracts have risen 9pc this week after falling to their lowest level since July 2021 earlier this month.
Kateryna Filippenko, director for global gas research at Wood Mackenzie, said prices "seem to be searching for the floor", adding the market is "unlikely to see the levels of 2022 but the volatility is hear to stay".
It comes as Europe's gas storage stands at 56pc - its highest for this time of year in more than a decade.
Dutch front-month futures, the European benchmark, have climbed 2.8pc today to nearly €45 per megawatt hour.
08:38 AM
Rio Tinto deal helps lift FTSE 100
The FTSE 100 has inched up as miner Rio Tinto rose after signing a partnership to develop a copper project.
The Anglo-Australian miner rose 1pc after signing a joint venture with Canada's First Quantum Minerals to develop the La Granja copper project in Peru.
Industrial metals miners housing Rio Tinto added as much as 0.9pc before pulling back.
The commodity heavy FTSE 100 was up 0.2pc, while the FTSE 250 was flat.
Ocado Group won a High Court legal action brought by Norwegian robotics firm AutoStore after the judge dismissed its patent infringement claims, sending shares of the online supermarket group up 1.8pc.
08:30 AM
Dignity suffers heavy losses as more opt for low-cost funerals
Funeral firm Dignity has notched up heavy losses after battling higher costs and as more people opt for lower-cost funeral services.
The business reported a pre-tax loss of £328.6m over 2022, compared with a profit of £32m the year before.
Increased competition in the market, changes in its pricing strategy and the introduction of cheaper funeral services including direct cremations have dragged on the firm's financial performance.
Inflation has also pushed up costs for the group, including staff wages and energy costs.
The firm said it had made the decision to make some some staff redundant in January as it restructures its local branches.
Dignity was swept up by a group of investors linked to its former chief executive in a deal worth around £281m in January.
The group said becoming a private company was the "best way forward" for Dignity given the challenges it faces and the "significant development work needed."
The offer remains conditional on, among other things, regulatory approval, it said.
08:06 AM
Markets rise at the open
Markets have opened higher in London once again, as US technology shares drove gains on Wall Street.
The FTSE 100 has climbed 0.8pc to 7,624.82 while the FTSE 250 has inched up 0.1pc to 18,921.35.
07:48 AM
Cost of living squeeze reverses for first time in over a year
The cost of living squeeze showed its first signs of abating at the end of last year as government support on energy bills boosted disposable income.
Living standards improved in the final three months of 2022 after falling for a year, despite double-digit inflation squeezing consumers.
Households' disposable income, when adjusted for inflation, grew by 1.3pc in October to December, reflecting a boost from the Government's energy support scheme.
Disposable incomes grew by 3.6pc when not factoring in inflation, the largest quarterly growth since 1999, figures from the Office for National Statistics show.
The nominal increase was driven by strong wage growth in the private sector, although salaries have on average not kept pace with rampant inflation.
The strong boost to real disposable household incomes from the energy scheme suggests that Government support has helped offset some of the hit to living standards from wages failing to keep pace with rapidly rising prices.
The UK economy grew very slightly by 0.1pc in the final three months of last year, revised figures by the ONS reveal.
The revision confirms that a much-anticipated recession has so far failed to materialise and the economy was 0.6pc larger than a year earlier.
The better-than-expected figure was driven by a stronger outturn in some sectors and the Government's energy scheme boosting household finances.
07:36 AM
House prices falling at faster pace
House prices have fallen for a seventh month in a row and at a steeper rate than previous months, according to Nationwide.
Nationwide said prices were down 0.8pc in March compared to the previous month, a bigger drop than 0.5pc in February and ahead of economists expectations of a 0.3pc fall.
Another monthly fall in the Nationwide house price index.
Now down 6.1% non-seasonally adjusted and down 4.6% seasonally adjusted since its peak back in August https://t.co/rHtNEg3fUq— Neal Hudson (@resi_analyst) March 31, 2023
07:24 AM
UK economy grew by 4.1pc last year
A series of factors helped the UK economy grow very slightly by 0.1pc in the final three months of last year.
Senior economics reporter Eir Nolsøe has the latest on the revised figures by the Office for National Statistics:
The revision confirms that a much-anticipated recession has so far failed to materialise and the economy was 0.6pc larger than a year earlier.
The better-than-expected figure was driven by a stronger outturn in some sectors and the Government's energy scheme boosting household finances.
The construction sector grew by 1.3pc rather than 0.3pc as initially estimated, while services grew by 0.1pc rather than flatlining.
The improved growth figure means that the UK economy is now 0.6pc smaller than before the pandemic, revised up from 0.8pc.
Overall this means the economy grew by 4.1pc across 2022, up from 4pc.
07:21 AM
Households saved more at end of 2022, says ONS
ONS director of economic statistics Darren Morgan said:
The economy performed a little more strongly in the latter half of last year than previously estimated, with later data showing telecommunications, construction and manufacturing all faring better than initially thought in the latest quarter.
Households saved more in the last quarter, with their finances boosted by the Government's energy bill support scheme.
Meanwhile, the UK's balance of payments deficit with the rest of the world narrowed, driven by increased foreign earnings by UK companies, particularly in the energy sector.
07:17 AM
UK economy grew more than expected at end of 2022
The UK economy grew by more than first thought in the fourth quarter of 2022, the Office for National Statistics has said.
Economists had previously said the economy saw zero growth between October and December, indicating the UK had very narrowly avoided a recession.
However, now revised figures show that gross domestic products (GDP) increased by 0.1pc over the quarter.
It comes after a 0.1pc decline in the third quarter, with decline for the period reduced due to another revision.
GDP is estimated to have grown by a revised 0.1% in Quarter 4 (Oct to Dec) 2022.
Up from an initial estimate of 0.0% growth.
➡️ https://t.co/Q7Lah5zn7G pic.twitter.com/SMEGkiNpOy— Office for National Statistics (ONS) (@ONS) March 31, 2023
07:16 AM
House prices fall as 'affordability remains stretched'
House prices are 4.6pc below their August peak, according to Nationwide's latest house price index.
Robert Gardner, Nationwide's chief economist, said:
The housing market reached a turning point last year as a result of the financial market turbulence which followed the mini-Budget.
Since then, activity has remained subdued – the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40pc below the level prevailing a year ago.
It will be hard for the market to regain much momentum in the near term since consumer confidence remains weak and household budgets remain under pressure from high inflation.
Housing affordability also remains stretched, where mortgage rates remain well above the lows prevailing at this point last year.
07:11 AM
House prices suffer largest decline since 2009
House prices fell by 3.1pc in the year to March, marking the largest annual decline since July 2009, Nationwide Building Society has said.
Across the UK, prices fell by 0.8pc month on month, falling for the seventh month in a row.
The average UK house price in March was £257,122.
07:08 AM
Virgin Orbit on brink of collapse as it sacks 85pc of staff
Sir Richard Branson has injected $11m (£8.9m) into Virgin Orbit as the troubled rocket launch company seeks a last-minute buyer after laying off 85pc of its staff.
The satellite-launch company said it has ceased operations and will cut about 675 jobs after the business failed to secure outside funding.
The company had said the remaining staff will work on winding down the business.
However, chief executive Dan Hart is making last ditch efforts to secure a rescue deal, according to the Financial Times, with Mr Branson's cash injection expected to cover most of the severance payments.
It follows the high-profile launch failure from Cornwall in January, which led to a collapse in its share price.
Virgin Orbit temporarily suspended operations earlier this month while it sought additional capital.
The business — part of Branson's empire that includes airline Virgin Atlantic and spaceflight company Virgin Galactic. — has not turned a profit as a public company.
Virgin Orbit shares fell 45pc in pre-market New York trading amid news that it is near to collapse and laying off 85pc of its workforce.
It was trading at just 19 cents each. The stock was worth more than $7 a year ago.
The Long Beach, California-based company is one of several space-related start-ups with once high-flying valuations that have seen their shares plunge as investors shy away from untested business models and money-losing operations.
Astra Space reported Thursday that its cash and cash-equivalent reserves fell by 32pc in the last quarter of last year.
Rocket Lab USA said last month it expects its quarterly loss to be three times bigger than analysts had estimated.
06:47 AM
Good morning
Richard Branson has injected £11m into Virgin Orbit after it failed to secure additional funding and announced it is laying off 675 staff.
The satellite-launch company will cut about 85pc of its workforce.
However, chief executive Dan Hart is racing to secure last-minute investment into the business to keep it afloat, according to the Financial Times.
5 things to start your day
1) State pension age ‘should rise to 69’ to stop Treasury overspending | Independent report recommends a cap on state pension spending
2) Morrisons starts £700m cost cutting drive as it struggles to grow sales | Additional price cuts come as German discounters continue to take market share
3) BBC to cut original programming by 1,000 hours as funding black hole expands | Deepest cuts to hit BBC Four's arts and culture shows
4) Treasury criticised for advertising head of cyber security job with ‘peanuts’ salary | Government needs to have ‘grown up conversation’ on pay, ex-GCHQ chief says
5) Gas boiler manufacturers face £5,000 fines for missing heat pump targets |‘Soviet-style’ quotas come as ministers plan to overhaul subsidy rules
What happened overnight
Asian stocks followed Wall Street higher Friday ahead of a United States inflation update traders hope might prompt the Federal Reserve to ease plans for more interest rate hikes.
Shanghai, Tokyo, Hong Kong and Sydney advanced. Oil prices declined.
The Shanghai Composite Index rose 0.3pc to 3,269.83 and the Hang Seng in Hong Kong gained 1.1pc to 20,532.33.
The Nikkei 225 in Tokyo advanced 1pc to 28,046.75 after government data showed factory output rebounded and retail sales rose in February.
The Kospi in Seoul added 0.9pc to 2,475.69 and Sydney's S&P-ASX 200 was 0.8pc higher at 7,176.00.
New Zealand declined while Indonesia, Singapore and Malaysia advanced.
Wall Street's main equity indexes were lifted by gains in technology stocks, which offset falls in regional bank shares after President Joe Biden proposed tighter rules for mid-sized lenders to avoid a repeat of Silicon Valley Bank.
The Dow Jones Industrial Average finished up 0.4pc at 32,859.03, while the broad-based S&P 500 rose 0.6pc to 4,050.83. The tech-rich Nasdaq Composite closed 0.7pc higher at 12,013.47.
The benchmark 10-year yield dipped by two basis points to 3.55pc from 3.57pc late on Wednesday. The policy sensitive two-year yield climbed three basis points to yield 4.11pc.
