Business news live: Pound falls sharply as Bank of England hints at interest rate cut to deal with Brexit uncertainty

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Michael Saunders said the BoE could cut rates in the event of prolonged Brexit uncertainty (PA)

The pound has dropped more than half a cent against the dollar this morning after a senior Bank of England policymaker suggested interest rates may be cut soon.

Michael Saunders said the BoE could “loosen policy” - meaning cut rates - in the event of prolonged Brexit uncertainty, even if the UK avoids a no-deal departure from the EU.

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[27 September 2019 09:20 · ben.chapman]

Welcome to The Independent's live coverage of business and economics events.

Sterling has dropped sharply this morning after Bank of England policymaker Michael Saunders suggested that interest rates could be cut to cushion the blow of prolonged Brexit uncertainty.

Previously the Bank had hinted that it would only cut rates in the near future if the UK leaves the EU without a deal.

The pound fell to £1.228.

[27 September 2019 09:27 · ben.chapman]

Michael Saunders, a member of the Bank of Engalnd's rate-setting committee said:

If the UK avoids a no-deal Brexit, monetary policy also could go either way and I think it is quite plausible that the next move in Bank Rate would be down rather than up.

One scenario is that Brexit uncertainty falls significantly and global growth recovers a bit... In this case, some further monetary tightening (limited and gradual) is likely to be needed over time.

Another scenario, and this is perhaps more likely to me, is of prolonged high Brexit uncertainty (even without a no-deal Brexit actually occurring). In this case, it might well be appropriate to maintain a highly accommodative monetary policy stance for an extended period and perhaps to loosen policy at some stage, especially if global growth remains disappointing.

[27 September 2019 09:39 · ben.chapman]

WeWork is selling its $60m Gulfstream private jet

WeWork, the troubled office rental firm that bills itself as a revolutionary tech company, appears to be getting a much-needed dose of reality after abandoning its disastrous plans to sell shares to the public.

Now that controversial founder Adam Neumann has been removed as CEO, WeWork is selling off its $60m Gulfstream private jet and has halted all new lease agreements in a bid to stem massive losses.

Some people will be asking why a start-up that was burning through billions of dollars of funding from private investors was allowed to splash $60m on a plane in the first place.

Two new chief executives brought in to inject some sanity into the company are reportedly seeking to oust roughly 20 of Neumanns friends, including some senior managers.

[27 September 2019 09:57 · ben.chapman]

What next for the pound?

Sterling has taken a pummeling this morning in response to comments from a Bank of England policymaker.

But...

UBS thinks the pound is likely to rise as Brexit political wranglings run their course.

The latest twist in the Brexit saga was the UK Supreme Court’s decision that the suspension of the UK Parliament, which strongly opposes a no-deal Brexit, was unlawful.

Our base case remains for the UK to ask for an extension to the 31 October Brexit deadline instead of leaving the EU without a deal. GBPUSD currently trades at 1.23, well below our purchasing power parity estimate of 1.58. 

I should point out this guidance was issued just before Michael Saunders' latest comments.... See blow

[27 September 2019 10:00 · ben.chapman]

Small firms in 'urgent need' of Brexit support

Small businesses are in urgent need of more government support to overcome a "worrying lack of preparedness" for a no-deal Brexit, according to the Federation of Small Businesses (FSB). 

Among the 39 per cent of small firms that think a no-deal will negatively impact them, only one in five have planned or prepared for anticipated issues. Nearly two thirds don’t think they are able to plan.

Businesses that have prepared have spent about £2,000, according to the FSB's survey. 

That average cost rises to £3,000 for smaller businesses that export and import.

[27 September 2019 10:07 · ben.chapman]

The falling pound has helped push up the FTSE 100 which is full of multinationals that generate revenues in other currencies.

The blue-chip index is up 0.8 per cent to 7,412.52 this morning.

Mining shares have done well with Evraz, Glencore and Anglo American all on the rise.

[27 September 2019 10:20 · ben.chapman]

Consumer confidence up in September

Consumers are feeling a little better than they did last month, suggesting they are "keeping their fingers crossed" in the run up-to the 31 October Brexit deadline, according to a new poll.

GfK's long-running index of what shoppers are thinking moved up to (minus) -12 in September from -14 in August, meaning more people are still pessimistic than optimistic.

People are very downbeat about the economy but much more positive when it comes to their own personal financial situation, the survey reveals.

Joe Staton, client strategy director at GfK, says:

“More mixed signals this month as consumers continue to feel less than positive about the state of their personal finances and the general economy.

Yes, all sub measures are higher, but they are anaemic in the case of our purchase intentions and how we view our wallets, while the results on the wider economy are still depressed.

Since the Brexit referendum we have witnessed a long succession of negative Overall Index scores with the overall trend downwards. This month, British consumers appear to be treading water during this wait-and-see run-up to October 31st.

Confidence is an important indicator which typically increases as the economy expands and decreases when the economy contracts and so far, consumer confidence is holding up.

We certainly have a long way to go to match the record low headline score of -39 witnessed during the early days of the last recession. But will it stay that way? You can almost sense people are keeping their fingers crossed.”

[27 September 2019 10:30 · ben.chapman]

16,000 Thomas Cook customers to fly home today

(Reuters) - UK’s Civil Aviation Authority said on Friday 72 flights are scheduled to operate to bring back a further 16,000 people to the country following the collapse of Thomas Cook.

The aviation regulator said it has brought back over 40% of the total number of passengers in the largest peacetime repatriation ‘Operation Matterhorn’ launched on Monday.

[27 September 2019 10:30 · ben.chapman]

Crisis? What crisis?

Commenting on the latest consumer confidence numbers, Samuel Tombs chief UK economist Pantheon Macroeconomics says:

Consumer sentiment is continuing to hold well up well, despite the chaos in Westminster and the lingering risk of a no-deal Brexit.The composite index now is close to its 1974-to-present average of -9, and slightly exceeds its year-to-date average of -13.

Households remain downbeat about the outlook for the overall economy, with the relevant balance still hovering at levels last seen in 2011. But households do not expect broader economic difficulties to affect them; confidence about the outlook for their   personal finances is only fractionally below pre-referendum levels.

However, he cautions:

Looking ahead, the slowdown in both employment and wage growth signalled by most surveys suggests consumers’ optimism might begin to fade.

In addition, we doubt that the forthcoming election will lead to a swift resolution of Brexit uncertainty; indeed, the current level of consumers' confidence points on past form to another hung parliament. 

[27 September 2019 10:32 · ben.chapman]

Boris Johnson's tax cuts will hand billions to higher earners

The tax cuts promised by Boris Johnson would cost billions and benefit mostly higher earners, the Institute for Fiscal Studies (IFS) has said, proposing a different way to help people on low incomes.