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Summary

  1. Dollar at 13-year high as Fed chair signals rate rise "relatively soon"
  2. S&P 500 and Nasdaq trade higher
  3. FTSE 100 closes higher
  4. UK retail sales jump in October
  5. JP Morgan pays $264m in China hiring settlement
  6. Whiplash claims clampdown will cut insurance bills
  7. Get in touch: bizlivepage@bbc.co.uk

Live Reporting

By Daniel Thomas

All times stated are UK

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That's all from me

Thanks for reading Business Live and I hope you can join us again tomorrow from 6.30am. Friday's highlights will include ONS overseas travel and tourism statistics and trading updates from Fuller's and Nationwide.

US markets up at close

All three major US markets have closed higher after a wave of positive economic data was published earlier today.

The Dow Jones closed up 0.19%, or 35.68 points, at 18,903.82 points, the Nasdaq ended 0.74%, or 39.39 points, higher at 5,333.97 and the S&P 500 closed 0.47%, or 10.18 point higher, at 2,187.12.

Among the best performers were chip maker Advanced Micro Devices Inc, up 10.3%, DIY chain Home Depot, up 2.87% and electronics retailer Best Buy Co. Inc., up 13.70%.

It followed positive jobs and inflation data published this morning and comments from Fed chair Janet Yellen signalling a rate rise "relatively soon". Most analysts now see a December hike as inevitable.

Tesla and SolarCity merger approved

Elon Musk
Getty Images

Shareholders for SolarCity and Tesla have approved a merger between the two companies.

According to a statement Tesla sent to CNBC, more than 85% of shareholder votes were in favour of the acquisition, which will now be completed in the coming days.

The deal has divided investors, some of whom have have tried to block it. Some allege Tesla chairman Elon Musk, who holds about 22% of SolarCity stock, is simply bailing out the smaller company because the US solar industry is in decline. 

But others say the merger will boost Tesla's position as a sustainable energy company and enhance its balance sheet.

Goldman uncertain about global markets in 2017

Goldman Sachs has been sharing its thoughts about world markets next year and seems to be feeling uncertain. 

On the plus side it expects global growth to pick up in 2017 "vs the somewhat disappointing performance in 2016". However, it also fears poor productivity and low GDP growth trend rates could restrain market returns.

But it says there are reasons to think the longer-term outlook could brighten next year.

"For one, in most countries, the falling growth rate of the working age population is forecast to decelerate over the next several years," it said. 

"Second, research by our economics team suggests that the pace of scientific discovery and technological change has not slowed nearly as much as measured productivity indices would suggest.

"Finally, there is the theoretical, but untested, possibility that untapped productivity growth lies hidden in the economy, and that all that is required is to let it 'run hot' for a while."

Still, the bank says it remains skeptical. 

"Until more clear evidence accumulates showing that the outlook for productivity and trend growth has improved, the opportunity set for investors is likely to remain low."

Schäuble warns of costs of Brexit for UK

Wolfgang Schäuble
Getty Images

Germany’s finance minister told the Financial Times that, even after Brexit, the UK would be bound by tax rules that would restrict it from granting incentives to keep investors in the country - and would also face EU budget bills for more than a decade.

Wolfgang Schäuble told the paper: "Until the UK’s exit is complete, Britain will certainly have to fulfil its commitments. Possibly there will be some commitments that last beyond the exit … even, in part, to 2030 … Also we cannot grant any generous rebates.”

Schäuble also insisted that Britain must adhere to international rules on investment incentives - as with Japanese carmaker Nissan, which recently won UK government assurances when it agreed to keep its production in the UK.

“These rules apply to all whether EU members or not,” he said.

Mexico rate hike 'won't be enough'

Some reaction from Mexico is better than no reaction. But today’s hike isn’t going to be enough. The peso has taken the brunt of the post-Trump sell off in emerging market currencies. The central bank really needed to get in front of the situation by raising rates by at least 75 basis points. Today was a missed opportunity. We might see more aggressive selling-off of the currency now. Time will tell what the bank does next. Markets have absorbed the initial shock of the surprise US election result but further action from Banco de Mexico depends on how the peso behaves in the coming months and how much President-elect Trump matches campaign rhetoric with actual policies.

Edwin GutierrezHead of emerging market sovereign debt

Strong dollar 'threatens global stability'

Dollar
Getty Images

As the US dollar hit a multi-year high today, economists warned the currency's strength could adversely affect financial stability next year. 

The greenback has jumped 5% since Donald Trump's shock election win as investors bet on inflation rising faster than previously thought in 2017. 

Money managers attending this week's Reuters Global Investment Summit said the spike in the currency, and in Treasury yields, could push up the cost of dollar debt.

And that would be damaging for firms and households both in US and the rest of the world, where dollar-denominated debt now totals nearly $10tn.

"If the dollar gently goes up, I think we'll be OK. But an aggressively rising dollar will be bad news for emerging markets, quite painful for China and it could undermine risk assets," said Mark Burgess, chief investment officer for Columbia Threadneedle Investments, EMEA.

The other issue is that it could make US exports less attractive, choking off US growth. 

Joachim Fels, a managing director at Pimco, said: "If you get too much dollar appreciation it feeds back negatively into US growth and particularly hurts the manufacturing sector, and these are Donald Trump's voters, so I think there is a certain limit."

Mexico raises rate after Trump win

Mexico City
Getty Images

Mexico has raised its key interest rate from 4.75% to 5.25% following a steep fall in the value of the peso since Donald Trump's US election victory last week.

Mexico's central bank increased the rate after the election "led to an increase in volatility in financial markets of every region". 

The US president-elect says he is committed to building a wall between Mexico and America. He has also said he plans to renegotiate or scrap the North American Free Trade Agreement (Nafta), a three-nation pact between the US, Canada and Mexico.

Premier League scores China TV deal

Football match at Hong Kong stadium
Getty Images

It is no secret that China's president, Xi Jinping, is a big football fan. Manchester City, which is backed by Chinese investors, hosted President Xi when he visited Britain last year.

It now appears that Britain's Premier League has struck its biggest overseas deal by selling television rights to China for $700m.

Associated Press reports that the rights have been sold in a three-year deal from the 2019-2020 season to PPTV, an online video streaming service. 

PPTV is part of the Suning group which owns Italian club Inter Milan and currently has the rights to broadcast games from Spain's La Liga in China. 

Europe space race makes giant leap

Ariane 5 rocket in French Guiana
Getty Images

Europe has made a giant leap forward in the race to provide accurate satellite-navigation systems.

A further four Galileo satellites were launched on the Ariane 5 rocket from French Guiana.

Galileo is owned and funded by the European Commission and following today's launch has 18 spacecraft in-orbit. 

While the sat-nav project complements America's existing Global Positioning System (GPS), the hope is Europe's system will provide users with more accurate mapping positions with a general error of one metre, compared with the current GPS error of several metres.

Europe also hopes it will benefit member state economies by forging new business that can exploit the services.

Airbnb cooks up major expansion

AirBnB site
Getty Images

Airbnb will soon be more than a home renting service. 

The company wants to offer customers the chance to plan every aspect of their time in their new temporary digs, to give them a more authentic flavor of the locality.   

Airbnb hopes help travelers choose and book activities, including everything from dirt biking and cooking lessons to the more mundane, but no less important, restaurant reservations. 

Brian Chesky, chief executive of Airbnb, said: "You immerse and you join the local community."

Three quarters of people 'want rental sector regulated'

Trevor Locke
BBC

According to a survey conducted by ComRes for the BBC's Victoria Derbyshire programme, 76% of people want parts of the private rental sector regulated.

The survey of 1,002 people asked whether they would support government regulation on such issues as letting agents fees, contract lengths, deposits and inventory checks.

Nearly three-quarters said they would support rent control, with the government setting maximum caps on private rent prices.

And more than two-thirds said they would support caps on rent increases when contracts were renewed.

Trevor Locke (pictured) is one of several people who told the BBC they had struggled with the cost of renting. 

"By the time you've put down the deposit, rent in advance, agents' fees, all the other costs, let alone the actual move itself, you're talking about somewhere between £2,500 and £3,500," he says.

Read more

Dollar hits 13-year high

Dollar value chart
Bloomberg

The US dollar enjoyed a further shot in the arm today after Fed chair Janet Yellen signaled a rate increase would likely be appropriate "relatively soon".

The currency hit a 13.5 year high versus a basket of major currencies after Ms Yellen finished her appearance before Congress' joint economic committee on Thursday. 

US inflation hits six-month high in October

Gas pump
Getty Images

US inflation saw its strongest monthly rise in six months in October, due to higher prices for petrol and housing.

According to the US Labour Department, the consumer price index rose 0.4% for the month, matching analyst expectations. 

On a year-on-year basis, the index was up 1.6%, the biggest such gain since October 2014. 

Rising fuel prices drove over half of the overall CPI gain - up 7% in October - while housing prices rose 0.4%.

The core consumer price index, excluding food and fuel, rose only 0.1% for the second month in a row but was up 2.1% year on year.

Donald Trump: Emerging markets braced for economic effects

Brazilians holding up a pro Trump banner
AFP

Donald Trump's US election victory caused shockwaves on Mexican and Brazilian markets, with the countries' respective currencies taking a battering.

And that could be a foretaste of things to come: not just the US's so-called "backyard", but emerging markets in general are bracing themselves for the economic effects of Donald Trump's US election victory.

Mr Trump does not become president until 20 January, and so far, we know little about the economic policies that he will actually put into practice.

But analysts are watching for at least three factors that could have contradictory and clashing effects...

Read more.

Walmart results disappoint investors

Walmart store
Getty Images

As we reported earlier, Asda's sales tumbled in the third quarter, but it's also worth mentioning that its US parent Walmart is struggling too. 

Walmart's like-for-like sales excluding fuel at its US stores rose by a slightly lower than expected 1.2% for the three months to October.

Profits at the world's largest retailer fell to $3.03bn from $3.3bn in the same period last year.

Walmart's chief financial officer Brett Biggs told Reuters that falling food prices continued to be "challenging" for the retailer. 

BreakingS&P 500 and Nasdaq trade higher

The S&P 500 and Nasdaq markets are heading higher in early afternoon trade.

The former stands at 2185.85 points, up 0.41%, while the latter has reached 5,324.66 - up 0.57%.

The Dow has also turned positive, trading up 0.05% at 18,878.48 points.

FTSE 100 ends higher

London Stock Exchange
Getty Images

The FTSE 100 ended higher today helped by gains by mining firms and house builders.

The index closed 0.67%, or 44.99 points, up at 6,794.71 points. 

Among the strongest performers were Barratt Developments, up 3.51%, and Persimmon, up 3.10%, while miner Randgold climbed 4.02%.

Royal Mail was the FTSE’s largest faller, down 7%, after half-year results showed profits had slipped 6%. 

Most of that decline was driven by lower letter volumes, with better performances from parcels and the European business. 

LinkedIn blocked by Russian authorities

Linkedin logo
BBC

Social network LinkedIn will be blocked in Russia, after a court found the company guilty of violating local data storage laws.

Russia's communications regulator Roskomnadzor said LinkedIn would be unavailable in the country within 24 hours.

Some internet providers have already cut access to the site, which has more than six million members in Russia.

LinkedIn told the BBC it hoped to meet Roskomnadzor to discuss the block.

Read more.

Dodgy spreadsheets

Here's some more on JP Morgan's $264m China hiring settlement. 

The Securities and Exchange Commission said that over seven years, about 100 interns and full-time employees were hired at the request of foreign government officials - enabling JP Morgan to win or retain business that generated more than $100m in revenues.  

Kara Brockmeyer, of the SEC, said the misconduct was "so blatant that JP Morgan investment bankers created 'referral hires vs revenue' spreadsheets" to track the money flow.

The Department of Justice called the scheme "bribery by any other name" and said it threatened national security. 

JP Morgan to pay $264m in China hiring settlement

JP Morgan
Reuters

US bank JP Morgan Chase is to pay $264m (£212m) to settle claims it hired the children of highly placed Chinese people in order to gain business there.

The Securities and Exchange Commission (SEC) and the Justice Department launched an investigation in 2013.

The bank will pay the SEC $130m for violations under the Foreign Corrupt Practices Act.

It is also expected to pay $72m to the US Justice Department and $61.9m to the Federal Reserve Board of Governors.

Read more.

BreakingMr Trump 'will announce economic transition team on Monday'

Donald Trump
Getty Images

Mr Trump will announce his economic transition team on Monday, Bloomberg has reported. The team will work with federal government agencies to prepare for Mr Trump's administration which begins in January. 

So far the president-elect has appointed Steve Bannon as chief strategist and Reince Priebus as chief of staff - but there have been delays in making wider appointments, with the transition process described as being in "disarray" by sources.  

BreakingCentral bank independence 'vital', says Yellen

The Congress joint committee asks Mrs Yellen if central bank independence is all it's cracked up to be. It's another hint at the potential for interference during Mr Trump's presidency. 

Mrs Yellen, perhaps not surprisingly, says it's vital. Central banks need to make long term decisions and so must be free of political influence. 

In countries where that doesn't happen there have been "disastrous consequences", she says. 

Markets have come to expect this independence too, not just in the US but globally. 

Yellen defends bank lending rates

Janet Yellen
Bloomberg

One member of Congress' joint economic committee points out that US bank lending has been sub par and questions whether tough rules in the Dodd Frank act - such as higher capital requirements - have caused the problem. This is broadly why Mr Trump wants to repeal the act. 

But Mr Mrs Yellen says regulations such as stress tests are "effective and useful" and must be maintained. The Fed has eased some of the stress test requirements for smaller banks, too. 

As for consumer lending, she says we wouldn't want to go back to the mortgage lending standards we saw in the first decade of the century. These led to the financial crisis. 

And on small business lending she says funds "largely are available" and that demand for such credit has been low in recent years.  

In effect, if businesses want the debt they can get it. 

BreakingYellen says Dodd Frank 'very important'

Mrs Yellen is asked how she feels about Donald Trump's proposal to repeal the Dodd Frank banking act. 

She doesn't answer directly, but she says the regulation resulted in a "safer and sounder" financial system. 

She says she would not want to see the "clock turned back on the improvements" made.

Yellen says she will serve full term

Janet Yellen is answering questions from Congress' joint economic committee.

She says she sees no circumstances under which she would not serve out her full term as Fed chair. Her role comes to an end in January 2018.

She also comments on the recent US election result. 

She says markets have been reacting to Donald Trump's policy proposals, which would have "inflationary consequences".

The Fed would have to "take these consequences into account", she says. 

"We don't know what's going to happen, there is a great deal of uncertainty," she adds. 

Yellen suggests rates rises will be 'gradual'

Janet Yellen
Bloomberg

Federal Reserve chair Janet Yellen is currently giving evidence to Congress' joint economic committee - and the session is expected to be closely scrutinised for hints about what action the US central bank will take at its December meeting. 

We'll have more on that later - but here's some more about the prepared testimony she is reading out (and which was released before the hearing).

Mrs Yellen noted the that the US job market has made further improvement this year and that inflation, while still below the Fed's 2% target, has started to pick up. 

She said that delaying a hike in the federal funds rate for too long could lead to the Fed to raising rates "relatively abruptly", which would increase the risk of a recession. 

"Holding the federal funds rate at its current level for too long could also encourage excessive risk-taking and ultimately undermine financial stability,'' she said.

Analysts see an around 90% chance that the Fed will raise rates next month -  but few expect the move to be dramatic. 

Mrs Yellen appeared to agree, saying: "Gradual increased in the federal funds rate will likely be sufficient to get to a neutral policy stance over the next few years."  

Yellen comments 'not a game changer'

Fed chair's promise of rate rise 'relatively soon' already priced in...

Aside from a slight rise in US Treasury yields we’ve seen little major effect on financial markets after Janet Yellen said interest rates could rise soon. The fact is a December rate hike has already been priced in – markets think there is a roughly 90% chance the Fed will increase the target federal funds rate. It now looks almost impossible for the Fed not to raise rates next month – it’s painted itself in a corner and has to respond with a hike or all hell will break loose in the markets. Today’s jobless numbers – showing unemployment at a four-decade low – only strengthens the case for the Fed to act. Rising bond yields since Donald Trump’s win further add to the argument for the central bank to raise rates.

Neil WilsonMarkets analyst, ETX Capital

Under the rug

Boy wearing Trump wig
Getty Images

While Donald Trump's US presidential election victory was a hair-raising shock for many people, owners of fancy dress shops had been predicting it for weeks.

When most pollsters and political pundits said Hillary Clinton would win last week, they were in fact ignoring an unusual but perhaps key statistic in the 2016 race for the White House - sales of wigs modelled on the hairstyles of the two candidates.

And in the battle of the wigs Donald Trump won, not by a hair's breadth but by a country mile.

"We sold roughly 150 Trump-style wigs... versus about 50 or so Hillary-style wigs," says Coutland Hickey, owner of the Chicago Costume Company.

Read more.

BreakingUS markets open higher

New York Stock Exchange
Getty Images

Each of the main US share markets opened higher on Thursday. 

In the opening minutes of trade the S&P 500 is up 0.17% at 2,180.57 points, the Nasdaq is up 0.15% at 5,302.50, and the Dow Jones is up 0.07% at 18,881.22.

Gap between US and German bond yields at 26-year high

Market watchers will have noticed the election of Donald Trump has spurred a huge bond sell-off, as investors fret his policies will lead to higher inflation and interest rates - pushing up Treasury yields.

Data from Reuters illustrates how the trend is playing out. It found the gap between 10-year government bond yields in the US and Germany stood on Thursday at its widest level since at least 1990, as US bonds came under renewed selling pressure.

US Treasury yields rose 3 basis points to 2.25% while German Bund yields were down 1 bps at just 0.30%.

The stability of German bonds owes much to the European Central Bank, which - unlike Mr Trump - is expected to maintain an ultra-loose monetary policy to boost weak inflation in the eurozone. 

Tesco promises 11 days of Black Friday

Tesco shopper
Getty Images

Black Friday may sound like a one-day sale, but Tesco sees it differently. The supermarket group says it will offer 11 days of Black Friday deals and savings this year - up from four days last year.

It will all kick off on Monday 21 November and last until Thursday 1 December. And rather conspicuously, the retailer appears to hope consumers will use the event to do some early Christmas shopping. 

"We're already offering customers market leading prices on the most loved toys this Christmas, and now we’re launching our best ever Black Friday event," said Matt Davies, head of Tesco UK, in a press release.

Premier pies ...

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US rate rise 'could be soon'

Janet Yellen
Getty Images

In prepared testimony to a congressional committee, Federal Reserve chair Janet Yellen has said the case for boosting its benchmark interest rate had strengthened and that an increase "could well become appropriate relatively soon."

Ms Yellen points out that the job market has made further improvement this year and that inflation, while still below the Fed's 2% target, has started to pick up.

With investors and economists expecting the Fed to boost rates, Ms Yellen says that further delaying a rate increase would present its own risks.

She will answer questions later from Congress' Joint Economic Committee which will be scrutinised for any hints of what action the central bank will announce at its meeting in mid-December. 

The end (of poverty) is nigh?

China flag looking up at skyscrapers against blue sky
Getty Images

The end of absolute poverty is in sight, Barry L Ritholtz, founder and chief investment officer of Ritholtz Wealth Management, writes in a blog post.

Gains are being made by the poorest people in the world - but there is a slipping middle class in first world nations, he says.

The number of people living in extreme poverty has been cut in half since 1990, mainly because of what's going on in China.

Twenty six years ago 66% of the population of China - or 755.8 million people - were living absolute poverty.

By 2013 that had fallen to 1.9% of the population - or 25.2 million people. 

"One of the most important factors is very simple," he continues. "It’s estimated that two-thirds of poverty reduction comes from good old-fashioned economic growth. For every 1% increase in GDP per head, poverty is reduced by 1.7%. 

How many productivity puzzles?

The thorny issue of UK productivity is occupying the big brains at the Bank of England.

Patrick Schneider works in the Bank’s Structural Economic Analysis Division and he has written for the blog Bank Underground about the issue.

He reckons it's more helpful to think of their being two productivity puzzles. People are making and doing less for the same amount of work after the financial crisis - the traditional puzzle.

However, in addition productivity growth hasn't returned to the trend it was following before the financial crisis - productivity has tailed off:

Productivity trend puzzle
Bank Underground

"So there are two puzzles," Mr Schneider writes: "Why did productivity not return after the temporary (albeit huge) shock of the crisis and then why has productivity been growing so slowly more recently; each interesting in its own right and each potentially unrelated to the other." 

He says evidence suggests that the puzzle about the lower level of productivity is almost all down to lower technology growth, but the puzzle about why it's not growing as fast is down to both slower technology growth and less capital per person employed. 

He concludes that "we should be more worried by the continuing slow growth, which adds to the puzzle every year and combines the effect of slow innovation and utilisation as well as potential labour and capital market drivers".

FTSE clings onto positive territory

Let's check in on the FTSE 100 now and it's still higher - just.

In lunchtime trade it was at  6,759.62 - that's a rise of 9.90 points or(0.15%.

The biggest faller now is Royal Mail - following its results which showed a fall in pre-tax profits. 

Poorest UK areas 'hit by high energy bills'

The areas of the UK least able to afford high energy bills are being hit by... pricey energy bills, according to price comparison website Energy Helpline.

"Merseyside and North Wales have the highest average default bills at £1,197, and one of the lowest average incomes," co-founder Mark Todd wrote in a blog post.

"These areas have the UK’s least affordable energy at 7.7% of average income. The relatively rural North East of England, along with Central and South Wales, come joint second with low income per head and above average bills."