Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The United States and Great Britain may be separated by a common language, but they’re united by a common sense of political crisis — and the markets aren’t happy.
Yesterday’s sensational Supreme Court ruling against Boris Johnson, followed just hours later by the announcement of a formal impeachment inquiry into Donald Trump, have intensified the turmoil on both sides of the Atlantic.
Calls for Boris Johnson’s resignation are mounting this morning, with the Financial Times breaking with tradition by urging the PM to walk the plank for trying to unlawfully silence MPs.
Johnson is sitting tight (and flying back to the UK from the UN), but the chances of an early general election seem to be rising – with just five weeks until the Brexit deadline.
MPs have already voted to force the PM to seek another extension, if a Brexit deal isn’t passed before 31 October. But uncertainty over the situation, and worries about a no-deal Brexit, are keeping the pound pinned below $1.25 this morning.
The New York stock exchange closed in the red last night, with the Dow Jones industrial average losing 142 points or 0.5%. Asia has lost ground too, and we’re expecting a weak start to trading in Europe.
Wall Street was rattled by the US House opening a formal impeachment inquiry into President Donald Trump, amid revelations that he may have forced Ukrainian President Volodymyr Zelenskiy to investigate Democrat Jo Biden.
Ipek Ozkardeskaya, senior market analyst at London Capital Group, says:
The political turmoil around Donald Trump’s official impeachment inquiry, combined to rising fears of a no agreement with China in October trade talks turned the risk sentiment off across the global markets.
Michael Hewson of CMC Markets adds that Trump’s anti-globalist speech to the UN also weighed on markets:
European stocks slipped back again yesterday, as did US stocks in the wake of a rather political speech by President Trump at the United Nations where he tore into China, Iran and the World Trade Organisation, while also saying that the future belongs, not to globalists, but to patriots.
The losses in the US gained further traction after Europe had closed on reports that House Speaker Nancy Pelosi was weighing the prospect of announcing impeachment proceedings against President Trump in respect of a phone call, he had with Ukraine President Zelensky.
During the call it is being alleged the US President pressured the Ukrainian President to conduct a probe into the Ukrainian business dealings of Hunter Biden, the son of prospective Democratic Presidential candidate Joe Biden.
Trump (who has promised to release a transcript of his call with Zelenskiy today) took the news with typical grace:
We’ll also be watching day three of the Thomas Cook repatriation.
The Civil Aviation Authority hopes to fly another 16,000 or so passengers back to Britain at the end of their holidays, but some are suffering delays — and long journeys home if they’re landed at the wrong airport.
With MPs and regulators circling the collapsed company, there may be more developments today:
On the economic front, new UK home loan and retail sales figures will show how the economy is faring:
- 9.30am BST: UK finance survey of UK mortgage approvals in August
- 11am BST: CBI survey of UK retail sales in September
- 3.30pm BST: US weekly oil inventory figures