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Summary

  1. Get in touch: bizlivepage@bbc.co.uk
  2. Deutsche Bank agrees $7.2bn penalty with US regulators
  3. Italy approves rescue for Monte dei Paschi bank
  4. US alleges Barclays engaged in mortgage securities fraud
  5. Credit Suisse strikes $5.3bn deal with US Department of Justice

Live Reporting

By Russell Hotten and Dearbail Jordan

All times stated are UK

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That's it for another week. Like the share markets, we're having a half-day to do some last minute shopping. A Merry Christmas to you all.

FTSE 100 creeps into positive territory

London's main index closed marginally higher in a half-day session, as upwardly-revised official data showed the UK economy expanded by 0.6% in the third quarter despite Brexit jitters.

The FTSE 100 had been in negative territory for much of the trading session, but finished 0.06% up at 7,068.17 points. The FTSE 250 ended up 0.1% at 17,909.59 points

China fines GM venture $29m over car pricing

Cadillac
Getty Images

China is set to fine General Motors' Chinese joint venture $29m for "monopolistic pricing".

The country's pricing regulator will penalise GM's venture with China's SAIC Motor Corp for setting minimum prices on certain Cadillac, Chevy and Buick models, according to China Central Television.

In a statement to Reuters, the US carmaker said: "GM fully respects local laws and regulations wherever we operate. We will provide full support to our joint venture in China to ensure that all responsive and appropriate actions are taken with respect to this matter."

The fine has been levied at a sensitive time in US-Sino relations. It follows comments by president-elect Donald Trump that have questioned the "One China" policy and his naming of Peter Navarro, a hardliner on trade with China, as a trade adviser.

Deutsche Bank and the sighs of relief

Theo Leggett

BBC Business News Reporter

Deutsche Bank will be pretty happy with this settlement. It will be painful, but not nearly as painful as it could have been. 

The Department of Justice's opening gambit was a $14bn resolution. That would have been extremely serious for the company - equivalent to more than half of its market value. But it's also fair to say that was never realistically going to happen.

Deutsche was expecting to pay in the region of $5bn, based on the penalties doled out to other banks which allegedly missold mortgage-based investments.

Yes, today's penalty is higher - at $7.2bn. But only $3.1bn of that is actually hard cash. The rest is made up of "consumer relief" - changes to loans and other help for borrowers - which can be spread over a number of years.

It's a similar story for Credit Suisse. An overall penalty of $5.3bn, of which $2.8bn will go towards helping borrowers.

So rather than licking their wounds, executives at Deutsche in particular could be forgiven for letting out a few heartfelt sighs of relief.

Lapland UK doing nicely

Elf type person
Getty Images

A little bit of England is now Lapland. It's near Ascot. Revenues at Lapland UK, headed by former City trader, Mike Battle, is set to see sales rise by 30% to £6.5m in 2016. Mr Battle told the Press Association that the setup will have 60,000 visitors come through the doors during the festive period. "Families are welcomed to the show by elves, kids can spend time in a toy factory building a reindeer and wooden teddy bear and decorate gingerbread men." No smoking elves there, then.

'How long can it last?'

The service sector continues to be the mainstay of the UK economy, and the ONS figures show UK citizens dipped into their savings. The savings ratio was at its lowest since 2008. Paul Sirani, chief market analyst at Xtrade, said: "While the pound may respond positively to this morning's data, the outlook still looks weak. How long the British public can continue to pump money into the economy with prices for everyday items sure to rise remains to be seen?"

Christmas party? Try a sauna

Those people who may be dreading the office Christmas party - or have already made an idiot of themselves at the annual cringe-fest - should thank their lucky stars that they don't work in Germany, Holland or Finland.

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More of the same in the fourth quarter

Anthony Reuben

BBC News

On top of the revision to GDP for the third quarter, the ONS has also released the first big component of GDP in the fourth quarter.

Because the service sector accounts for 79% of the UK economy, the Index of Services for October is a strong proxy for GDP in the first month of the fourth quarter.

The index grew 0.3% between September and October, which is about average for the monthly changes we've been seeing since June.

We'll get the first estimate for GDP between October and December on 26 January.

Bank stocks weigh on FTSE 100

Banks
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The FTSE 100 is heading towards today's early close of 12.30pm trading lower.

The blue clip stock index is down 1.89 points at 7,061. Barclays tops the biggest losers, 1.45% down at 223.7p, after it emerged it is being sued by the US Department of Justice over the sale of mortgage-backed securities.

Shares in HSBC, which is under investigation by the DoJ, fell 1.1% at 647.5p.

Deutsche Bank's stock rose 2.79% after it reached a $7.2bn settlement with the DoJ while shares in Credit Suisse, which settled with the US government for $5.3bn, is trading 0.78% lower. 

Co-op recalls chocolate Santa over alleged tampering

Co-op chocolate Santa
Co=op

The Co-op has been forced to recall its hollow milk chocolate Santa foil figures after finding a small battery inside the Christmas treat. 

The retailer said there have been "two alleged tampering incidents" and warned people not to eat the chocolate Santa but call its customer relations team for a full refund.

The Co-op has sold 165,000 of the products and it has started a UK-wide recall. It is notifying both the police and the Food Standards Agency.

No other products are affected.

Anyone who is concerned should call Freephone 0800 0686 727.

Brexit has not hit UK GDP 'pace'

Ruth Gregory, UK economist at Capital Economics, said the upwardly revised GDP figures suggest that June's Brexit vote had had little impact on the economy and that economic growth in the final quarter of the year would be positive.

She says: "The latest set of UK National Accounts leave the economy looking even stronger after the referendum than previously estimated. 

"GDP growth in the third quarter was revised up from 0.5% to 0.6% and the 0.7% growth rate seen in the second quarter was revised down a touch, to 0.6%, suggesting that the economy didn't lose any pace following the referendum."

EU flag
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Monte dei Paschi rescue reaction

BBC Monitoring

News from around the globe

Monte dei Paschi
Getty Images

BBC Monitoring has cast its eye over the Italian press where there are questions over why a bailout of Monte dei Paschi is only just happening now.

Alessandro Graziani writes in the Italian financial daily Il Sole 24 Ore: "States have intervened to recapitalise banks in several countries [since the global financial crisis]. So it's no wonder that even Italy has decided to go down this route. What's rather surprising is that nationalisation hasn't been carried out before, at least after 2011, instead of waiting for emergency situations to arise such as Monte dei Paschi di Siena and in advance of new EU rules on bank bailouts... The return of the state to the world of credit is to be welcomed, because it serves as a buffer for some emergency cases... But the state must behave with entrepreneurial logic."

Meanwhile, Raffaele Ricciardi writes in La Repubblica: "Shareholders and bondholders will have to play their part in the recapitalisation, but with a protective umbrella for small savers, outlined yesterday by the Council of Ministers."

Monte dei Paschi - crisis over (apparently)

Pier Carlo Padoan
Reuters

Italy's economy minister, Pier Carlo Padoan, hailed the bailout of Monte dei Paschi, saying: ''This intervention will guarantee the capital requirement of Monte Paschi and will therefore allow the bank to proceed with its business plan, which European authorities will need to approve.

"It will be the third Italian bank which finally will return to operate at full throttle in support of the Italian economy and with the confidence of its savers and employees.''

GDP holds firm after EU referendum

Ed Conway, economics editor at Sky News, makes an interesting point about the revised third quarter GDP figure. 

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UK current account deficit swells

Britain's current account deficit rose to £25.5bn in the third quarter from £22.1bn in the previous three months, according to the Office for National Statistics.

Although the figure is less than the £27.45bn expected by economists, it means that the deficit is now 5.2% of GDP compared to a previous 4.6%.

Banks and households lift GDP growth

Shoppers in a high street
PA

The third and final reading of GDP between July and September - the quarter immediately after the EU referendum - shows that the economy expanded by 0.6% because of stronger growth from business services and finance-based companies. 

Households also appear to be spending more and saving less, compared to the second quarter of 2016 and between July and September last year, according to the Office for National Statistics.

Darren Morgan, head of GDP at the ONS, says: "Robust consumer demand continued to help the UK economy grow steadily in the third quarter of 2016. Growth was slightly stronger than first thought, though, due to greater output in the financial sector.”

Deutsche Bank: 'It could have been worse'

BBC Monitoring

News from around the globe

Reaction in Germany to Deutsche Bank's $7.2bn settlement in the US seems to be: it's big, but could have been worse.

Here are some views, courtesy of BBC Monitoring: 

Tobias Kaiser writes in Die Welt that the deal "will generate a sigh of relief at Deutsche Bank headquarters... But the punishment that has now been agreed on is still a hefty one."  

The business daily Handelsblatt says: "Though it is no longer expected to pay the sum demanded at the outset, the financial institution must still dig deep in its coffers." (There were reports earlier this year that Deutsche would have to pay $14bn).

And Claus Hulverscheidt, writing in Suddeutsche Zeitung, says: "It could have been even worse for Deutsche Bank, but the punishment that has now been agreed with the US Department of Justice will put a heavy burden on the country's biggest financial institution for years to come." 

BreakingUK third quarter GDP revised up

UK third quarter GDP has been revised up to 0.6% from 0.5% according to the Office for National Statistics.

Italian bond yields fall on bank bailout

Italian government bond yields fell on Friday as Monte dei Paschi said it would request aid from a new state fund to help struggling banks. Ten-year yields slipped 3 basis points (bps) to 1.82% in thin trading as financial centres across the region prepared to close for Christmas holidays.

The fall in Italian bond yields dragged those in Spain lower too, with 10-year yields dropping 3 bps to 1.38%. All other euro zone bond yields were about 1 bps lower on the day.

BreakingMonte dei Paschi shares suspended ahead of rescue

Monte dei Paschi
Getty Images

Shares and bonds in Monte dei Paschi have been suspended as the Italian bank confirmed that it had failed to raise €5bn from investors and would now seek funding from the government.

The Italian government has approved a €20bn bailout fund, part of which it will use to rescue Monte dei Paschi.