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  1. Bank of England to investigate sterling 'flash crash'
  2. Pound trading around $1.23 and €1.11
  3. UK industrial production falls in August
  4. US unemployment figures at 13:30 BST

Live Reporting

By Tom Espiner

All times stated are UK

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Good night - and happy weekend

That's it for another week from the Business Live page. Join us again from 06:00 for more business news and views.

US markets close lower

US stocks closed down on Friday after figures indicated the US economy added fewer jobs than expected last month. The Dow Jones Industrial Average was down 28 points at 18,240. The tech-heavy Nasdaq fell 14 points to 5,292, while the S&P 500 dipped 7 points to 2,153.

Credit card with fraud-busting display

Credit card
Oberthur Technologies

A credit card with a digital display that randomly generates a security code is being launched as a way of combating fraud.

Oberthur Technologies is currently in discussions with UK banks about rolling out the technology and will have cards "in the hands" of consumers in France by the end of the year.

Credit card fraud costs banks millions of pounds each year.

One expert said a different design for credit cards was overdue.

Read more here.

UBS chief: European banks 'in much better shape' now

Sergio Ermotti
Getty Images

The European banking system is in "much better shape" than it was several years ago, UBS chief executive Sergio Ermotti said.

"The last two weeks are a testament to that," Mr Ermotti said at the 2016 Institute of International Finance Annual Membership Meeting in Washington. "The same kind of dynamics seven or eight years ago would have created a major fallout."

Pound update

The pound is settled (sort of) around new low levels after the shock 6% fall of the small hours. It is trading at 1.2433, a loss of 1.46%, and against the euro it's at €1.1117, a loss of 1.8%. Not exactly bursting with health. 

Obama announces lifting of US sanctions on Myanmar

President Barack Obama has said he is lifting sanctions on Myanmar by terminating an emergency order that deemed the policies of the former military government a threat to US national security.

"I have determined that the situation that gave rise to the national emergency ... has been significantly altered by Burma's [Myanmar's] substantial advances to promote democracy, including historic elections in November 2015," Mr Obama said in a letter to congressional leaders announcing the decision. 

Boeing receives order for 40 planes form Qatar

Qatar Airways plane

US aircraft maker Boeing has announced a major deal to supply Qatar Airways with wide body jetliners.

The deal includes 30 787-9 Dreamliners and 10 777-300ERs, valued at $11.7bn (£9.4bn) at list prices, along with the option to buy 60 737 MAX 8s, valued at $6.9bn at list prices.

It is the largest single order ever placed by the Gulf carrier.

The deal gives Boeing a boost in a year when orders for widebody planes have slumped.

Read more here.

Storm over 'foreign academics Brexit advice ban'

It shows something of the febrile nature of the Brexit debate that this story seems feasible...

According to claims by Buzzfeed and the Guardian, the government has taken the highly unusual move of not allowing foreign academics to advise on Brexit, because, well, they are foreign.

This tweet from LSE assistant professor Sara Hagemann appears to confirm it:

View more on twitter

Fellow academics understandably responded with incredulity.

Steve Peers, a professor of EU law at the University of Essex, tweeted:

View more on twitter

A Foreign Office spokesperson said:

"The FCO regularly works with academic institutions to assist in its policy research and nothing has changed as a result of the referendum. It has always been the case that anyone working in the FCO may require security clearance depending on the nature and duration of their work.

"Britain is an outward-looking nation and we will continue to take advice from the best and brightest minds, regardless of nationality."

Fat finger? Algo theory?

BBC business presenter Victoria Fritz gives her view on what caused the pound's flash crash overnight:

View more on twitter
View more on twitter

The big questions

Easyjet warns of £90m sterling hit

We didn't spot this yesterday, but here's quite an interesting nugget from Easyjet's latest trading update.

It said it expects to take a £90m hit to its pre-tax profits from foreign exchange movements, mainly due to the the weak pound adversely affecting the cost of fuel.

Buried in the small print, it said it assumes this based on a US dollar exchange rate of 1.2716. But, and here's a big but, for every one cent movement down, pre-tax profits will fall £3m. The same will apply the other way.

Deutsche Bank's largest investors 'have no plans to sell'

Deutsche Bank HQ
Getty Images

Qatari investors who own the largest stake in Deutsche Bank do not plan to sell their shares and could consider buying more if the embattled German bank decides to raise capital, the Reuters news agency reports.

The investors own just below 10% of the bank, meaning on paper, they've lost over $1.2bn on their investments in the bank since the end of last year, Reuters said.

'There's bound to be uncertainty'

More from Chancellor Philip Hammond on Brexit uncertainty:

"The decision to leave the European Union means that there will be a period of a couple years of when people know we’re leaving, but they don't know precisely what the terms of that departure will be and what will follow it in future.

"So there's bound to be uncertainty. But the important thing is to look through the movements of currency markets, the short term movements of sentiment, at the fundamentals of the British economy. The fastest growing economy in the G7 this year, record high employment rates, and very high levels of growth in the first two quarters.

"We go into this period of turbulence fundamentally strong, and that should be a great reassurance to us."

In short... Don't panic.

Hammond: There will be no 'spending splurge'

Kamal Ahmed

Economics editor

Philip Hammond

After a day of volatility for the pound not matched since the night of the referendum, the Chancellor said that any fresh support for the economy via public spending would be cautious.

Speaking to me at the International Monetary Fund autumn meeting in Washington, Phillip Hammond said that although sterling's rapid fall was partly "technical", markets would have to get used to volatility while Britain negotiated its departure from the European Union.

Read more here.

Market turbulence 'to be expected', says Chancellor

Philip Hammond
Getty Images

Soothing words from the Chancellor, to pour oil on troubled waters.

The sterling "flash crash" and market turbulence are to be expected, Chancellor Philip Hammond tells BBC economics editor Kamal Ahmed.

"Some of what happened over night was driven by technical factors, as the Bank of England governor has explained this morning. Markets will go up and down – markets respond to noises off. As I said earlier this week, we are going to go through a period of volatility now, there will be lots of commentary going on and we can expect to see markets being more turbulent over this period and we should prepare for that. The government should take the necessary measures to be able to respond to it, to keep the economy going during this period."

US jobs 'Goldilocks figures'

Some analysts are still predicting that US interest rates will rise in December. US jobs gains were in "Goldilocks figures" says Scott Anderson of Bank of the West Economics: "not too hot and not too cold".

As a consequence the firm is maintaining its forecast for a December rate hike.

"The number was weak enough and labour force gains strong enough to take some of the air out of the hawks fears that the Federal Open Market Committee (FOMC) is behind the curve in raising rates. At the same time, it keeps the FOMC on track for another December rate move," he says.

Wall Street slips after US jobs report

Wall Street is lower after a weaker-than-expected September jobs report indicated that the US Federal Reserve could be cautious about raising interest rates.

US employment growth slowed for the third month in a row in September, with employers adding 156,000 jobs. Some economists had expected a figure closer to 175,000.

The Dow Jones industrial average was down 42.80 points, or 0.23 percent, at 18,225.70. The S&P 500 was down 5.06 points, or 0.23%, at 2,155.53. The Nasdaq Composite was down 11.86 points, or 0.21%, at 5,295.77.

Lloyds share sale: 'Standing up for ordinary people'?

Refuse collection in 1950s Brixton
Getty Images

The government has recently made much of standing up for "ordinary working people", for example, Theresa May's pledges to help consumers, fix "dysfunctional" markets, and her talking about the "bad side effects" of quantitative easing.

But is that all it's cracked up to be? Tom McPhail of Hargreaves Lansdown says the government decision not to sell Lloyds shares to the general public doesn't sit easily with its new stance.

“Whilst it is good news that the government is returning its remaining share of Lloyds Bank to private ownership, retail investors will be disappointed at being denied the opportunity to pick up stake directly from the government at a discount.

"This would have been an opportunity to not only raise money for the Treasury but also to democratise retail investing.

"Share offers of this nature are an excellent mechanism for developing consumer interest in long term investments, so this decision to place shares via an institution hardly seems in keeping with the new government’s mantra of standing up for ordinary people."   

How low could the pound go?

Dearbail Jordan

Business reporter

Dollar and pound

Analysts were largely in agreement today that the plunge in the value of the pound is not an overnight phenomenon and is only going to get worse.

Putting Friday's morning's "flash crash" aside, the pound has still fallen about 18% against the dollar to below $1.24 since Britain voted to leave the European Union on 23 June.

So where do they think the pound could end up?

HSBC: $1.10 by the end of 2017

UBS: $1.20 by end of next year   

Bank of New York Mellon: $1.10 by August 2017

Caxton: $1.15 by the end of 2017

'A lot of explaining'

Rupert Harrison, who was chief of staff to George Osborne, was often known as the "real chancellor" in government circles given his role in formulating policy.

He's tweeted:

View more on twitter
View more on twitter

Sterling 'worst performing currency in the world this week'

Worst spot returns
Bloomberg/Daiwa Capital Markets

Daiwa Capital Markets has this to say about the pound's flash crash:

"Even before last night’s “flash crash”, which saw it reportedly trade as low as $1.14, sterling was having a torrid week. And while it is currently 10 cents or so above where it traded at the lows overnight, at below $1.24 it is still down 4.5% since last Friday’s close, making it the worst-performing of all currencies in the world over the past week. And, even over a longer time period, sterling now sits among a sorry band of currencies in terms of performance - since the start of the year only the currencies of Angola, Sierra Leone, Nigeria, Venezuela, Mozambique and Suriname have fallen by more." 

Spot the Sports Direct announcement

Sports Direct shares
Getty Images

Can any of you sharp-eyed readers spot what time Sports Direct issued its profit warning?

Sports Direct issues profit warning

Mike Ashley
Getty Images

If we were being unkind, we'd say Friday afternoon was a good time to try to bury bad news.

Sports Direct has released a profit warning after the pound's flash crash last night.

In September, the firm said it expected full year underlying earnings of around £300m.

But it now expects an impact of £15m after last night's sterling fluctuations, plus, if the pound dollar exchange rate stays around $1.20, the firm will take a further £20m hit.

Hammond: 'Period of turbulence for sterling'

Chancellor Philip Hammond has told BBC economics editor Kamal Ahmed that there will be "a period of turbulence" for sterling due to Brexit.

"This will be a period of turbulence. I expect that we will feel turbulence. There will be ups and downs," Mr Hammond said.

He said that although the sterling drop overnight had a "technical component" he said that more generally the market had finally understood that Britain was leaving the European Union.

There had to be a "resetting of expectations" and now the "final foot had dropped".

He added there would regularly be "noises off" from European Union leaders about the state of the negotiations.

Selling at a loss...

Guardian journalist tweets...

Lloyds chief welcomes share sale

Antonio Horta-Osorio

Antonio Horta-Osorio, chief executive of Lloyds Banking Group said: “Lloyds Banking Group welcomes the Government’s decision to resume the trading plan to return the bank to full private ownership.

"This reflects the hard work undertaken over the last five years to transform the group into a simple, low-risk and customer-focused bank that is committed to helping Britain prosper”.

Government abandons plan to sell Lloyds shares to the public

Kamal Ahmed

Economics editor

Lloyds logo
Getty Images

The government has abandoned plans to launch a major retail share offer of the 9% of Lloyds Bank it still owns.

The Chancellor of the Exchequer said that market volatility meant that it was not sensible to attempt to sell the multi-billion pound stake it still owns to members of the public.

The shares will now be sold via a "trading plan" - small tranches of shares sold to professional investment organisations and pension funds.

Philip Hammond said that the private sale will ensure that the tax payer recovered the "full investment" it made when it bailed out the bank during the financial crisis.

He said that £17bn of the £20bn invested by the government had already been sold back to the market.

"We need to recover the tax payers' money," Mr Hammond said, saying that he wanted Lloyds to be fully back in the private sector.

"The proceeds of the Lloyds bank sale - the priority is to turn those assets into cash and use those to reduce debt," Mr Hammond said.

He said that the sale of the government's stake in the Royal Bank of Scotland was "not practical at the moment" whilst the bank was under the threat of fines from the Department of Justice in America and was struggling to sell its Williams and Glyn branch network.    

No Lloyds shares for the general public...

Simon Gompertz

Personal Finance Correspondent

Job report 'a minor disappointment'

Janet Yellen

Analysts had forecast that 171,000 jobs would be created in the US in September, and were also mildly surprised to see the unemployment rate edge up to 5%.

James Athey of Aberdeen Asset Management said the jobs report would be seen as "a minor disappointment". 

It's quite likely traders will lower the odds on a December interest rate rise, as history has shown that Fed chairwoman Janet Yellen is "very sensitive to downside shocks", he said. 

"In reality though attention is far more focussed on what might happen come November 8th," he added.

BreakingUS adds 156,000 jobs

The US added 156,000 more jobs - not including farm work - last month, according to the US Bureau of Labor Statistics. 

The jobless rate was "little changed" at 5%, it said. Analysts had been expecting a slightly higher number of jobs to have been added.

EU hits Chinese steel with tariffs

China Steel factory

The European Union has set provisional import duties on two types of Chinese-produced steel to counter what it says are unfairly low prices.

The tariffs are the latest in a line of trade defences after EU steel producers struggled to compete with cheap steel which they claimed was sold by Chinese factories at a loss.

Beijing is likely to be riled by the move, which will be imposed on hot-rolled and heavy-plate steel from China for the next six months.

Can the UK inherit EU trade deals?

Shipping containers

Building British trade outside the EU is a priority for Theresa May's government - and becomes even more important if it pursues a "hard Brexit" and leaves the single market. 

But could the UK take over existing trade agreements the EU has with other countries, under "grandfather rights", the phrase for allowing old rules to continue to apply amidst new arrangements?

The short answer is it might be able to do just that, according to Andrew Walker, BBC World Service economics correspondent.

Read more of his article 'Can the UK take over existing EU trade agreements?' here.

'Not just a currency crisis'

Kenneth Rogoff, a Harvard professor and former US Federal Reserve board member, says the fall in sterling is "more like a country crisis as opposed to a currency crisis".

He's told American business channel CNBC that it's a reflection on British investment and the British economy. 

"Everyday moves are pretty hard to explain but I think people are concerned about their assets in the UK, maybe they're wrong," he said. "But it [withdrawing from EU] has never been done before and people are nervous."

View more on twitter

HSBC forecast 'weighs on sterling'

Pound coin and £10 note
Getty Images

Connor Campbell at Spreadex makes the point that it's been a tough morning for the pound, even without the flash crash. He puts it down to two main reasons:

"Firstly, both the manufacturing and industrial production readings came in below expectations at 0.2% and -0.4% respectively, somewhat contradicting the positive PMIs from earlier in the week. 

"Secondly, and perhaps most damningly, HSBC issued a pretty bleak statement claiming that, as the ‘defacto official opposition to the government’s [Brexit] policies’, the pound could well find itself circling $1.10 by the end of [next] year."

Sterling update

Pound to US dollar chart

The pound is back above $1.23. In the chart you can see it was on a steady decline yesterday (the left hand side), but has gyrated in trading today. 

Flash crash aside, it's still down more than 2% today against the dollar - a big fall in and of itself.

Against the euro, it's hovering around the €1.11 mark after a drop of more than two cents.

Go-ahead for flight pollution pact

UN agency approves first-ever aviation pollution deal

Away from the markets for a moment - the world's first aviation pollution agreement has been approved. After years of negotiations and disagreements, the United Nations agency that oversees the industry gave the pact the go-ahead. 

The International Civil Aviation Organisation's global carbon offsetting system is expected to freeze the growth of emissions from commercial flights. 

It comes days after the UN confirmed the separate Paris Agreement on climate change had received support from enough countries and would come into force next month.

Flaky liquidity

One reason for the pound's "flash crash" was that it took place in the quiet hours between Wall Street closing and Asian stock markets opening, when there are far fewer traders around. 

Business presenter Victoria Fritz tweets:

View more on twitter

Miners pop, airlines drop

ETX traders

The FTSE 100 is heading back towards all-time highs in morning trade. The index of the UK's biggest stocks is up nearly 1% to 7,060 points.

Following the pound's heavy falls, it's miners and other big international firms with large overseas sales who are on top. 

"The British pound’s flash crash has shaped the winners and losers on the FTSE 100," says Jasper Lawler of CMC Markets (who also inspired this post's headline).    

On the back of Easyjet’s profit downgrade yesterday, airlines are among the worst hit as traders pull out of firms hit by a weaker pound, he adds. 

The only way is down - HSBC

Pound note

HSBC says it expects the pound to drop to $1.10 and parity against the euro by the end of next year as traders increasingly believe the government will pursue a "hard" Brexit.

"Brexit, whether one likes it or not, is a political decision, one we have to respect," said David Bloom, the bank's global head of FX research. "The currency is now the de facto official opposition to the government's policies."

He goes on to say: "It is becoming clear that many European countries will come to the negotiation table looking for political damage limitation rather than economic damage limitation. A lose-lose situation is the inevitable outcome."

The bank expects the currency to drop to $1.20 by the end of this year from around $1.24 on Friday. 

"The pound used to be a relatively simple currency that used to trade on cyclical events and data, but now it has become a political and structural currency. This is a recipe for weakness," Mr Bloom added.  

Who is affected by the falling pound?

Shopper loaded with bags

Amid all the numbers, charts and analyst warnings, it's easy to lose sight of what the falling pound might mean for people. 

Economists think it'll be bad news for British holidaymakers going abroad, those who have mortgages on foreign homes, and, if it leads to inflation, shoppers. 

Among the winners should be big UK exporters, tourists coming to the UK, and people renting out British holiday homes.    

Read more: Who is affected by the falling pound?