Closing summary
Fears that the British economy is already in recession after a much bigger-than-expected decline in retail sales triggered heavy selling of the pound on international money markets to a fresh 37-year low against the dollar.
With average UK wages continuing to fall behind rising prices and the Bank of England expected to push up interest rates next week, sterling fell by more than 1% against the US currency to $1.135, its lowest since 1985.
On the 30th anniversary of Black Wednesday when the UK crashed out of the European exchange rate mechanism, the pound also hit a 17-month low against the euro, with €1 worth 87.66p.
A report from the World Bank added to the gloomy prognosis for the UK after it said rising interest rates could push the global economy into a recession next year, badly affecting nations like the UK that depend on revenues from trade.
The worsening global outlook came as the latest official data showed cash-strapped consumers cut back on spending by more than expected in August, when retail sales volumes in Great Britain fell by 1.6%. Economists had predicted a more modest fall of 0.5%.
The fall in sales last month was broad based, with petrol stations, supermarkets, clothing and furniture stores all experiencing a drop, the Office for National Statistics said.
FedEx shares are down nearly a quarter after the global delivery company issued a major profit warning last night, adding to worries about the US economy. The share price fell 23.7%, contributing to a sell-off on Wall Street.
Over here, the FTSE 100 index in London was trading nearly 30 points lower at 7,252, a 0.4% drop, by mid-afternoon. Germany’s Dax, France’s CAC and Italy’s FTSE MiB were down between 1.2% and 1.7%.
Mainline train stations will stay open in London throughout the night in coming days as transport authorities prepare to look after the huge number of people expected to pay their respects at Queen Elizabeth II’s state funeral.
Restaurants and toilet facilities will stay open, with special “welfare trains” on platforms to seat vulnerable passengers who may have long waits to travel.
The limited additional night trains promised by operators for the lying in state and funeral would mainly serve destinations within the M25, Network Rail confirmed.
Our other stories today:
Thank you very much for reading. Have a good weekend. We’ll be back next week. Take care – JK
The University of Michigan’s consumer sentiment survey for September is a bit weaker than expected, and inflation expectations have retreated.
🇺🇸 *MICHIGAN PRELIM. SEPT. CONSUMER SENTIMENT AT 59.5; EST. 60
— Christophe Barraud🛢🐳 (@C_Barraud) September 16, 2022
*MICHIGAN 1-YR INFLATION EXPECTATIONS DROP TO 4.6% (lowest since Sep. 2021⚠) FROM 4.8%
*MICHIGAN 5-10 YR INFLATION EXPECTATIONS FALL TO 2.8% (lowest since July 2021⚠) FROM 2.9%
University of Michigan’s consumer sentiment report for September came out lower than expected at 59.5. pic.twitter.com/SqbiYEdkOf
— Yahoo Finance (@YahooFinance) September 16, 2022
