Good morning! Here’s what you need to know on Friday.
1. The Bank of England on Thursday afternoon left monetary policy unchanged for another month, meeting the expectations of forecasters and the markets in the process. That means an unchanged base interest rate of 0.25% and a QE programme capped at a total of £435 billion pounds. The bank’s Monetary Policy Committee voted 6-2 in favour of leaving rates and QE unchanged.
2. The Bank of England on Thursday said that regular Brits could start to work longer hours in order to combat the squeeze on their household finances triggered by the Brexit uncertainty affecting the economy. “The loss in real income as a result of the depreciation in sterling may also lead to some people wanting to work longer hours to make up that loss,” the bank’s Quarterly Inflation Report said.
3. Britain’s financial sector could double in size over the next 25 years, BoE Governor Mark Carney has said. Speaking to the Guardian newspaper in an interview to mark 10 years since the beginning of the financial crisis, Carney said: “If the UK financial system thrives in a post-Brexit world, which is the plan, it will not be 10 times GDP, it will be 15 to 20 times GDP in another quarter of century because we will keep our market share of cross-border capital flows.”
4. Robo-advisor MoneyFarm has attracted over 10,000 customers in the UK since launching last year and is now one of Europe’s biggest independent digital wealth managers. Annual accounts filed with Companies House and shared with journalists on Friday show that MoneyFarm, which operates across Italy and the UK, now has £260 million in assets under management (AuM).
5. US stocks slipped late in the day after the Wall Street Journal reported that special counsel Robert Mueller enlisted a grand jury in the ongoing probe into Russian affairs. The S&P 500 lost 0.2%, while the Dow was little changed and the Nasdaq fell 0.4%.
6. It’s Jobs Day in the USA. U.S. employers likely maintained a strong pace of hiring in July while raising wages for workers, signs of labour market tightness that could clear the way for the Federal Reserve to announce next month a plan to start shrinking its massive bond portfolio. According to a Reuters survey of economists, the Labour Department’s closely watched employment report on Friday will probably show that non-farm payrolls increased by 183,000 jobs last month after surging 222,000 in June.
7. Insiders say Google was interested in buying Snap for at least $US30 billion last year. Three people, including people inside and close to the company, separately confirmed to Business Insider that they had heard the chatter and price tag, with one calling it an “open secret” among Snap’s upper ranks and certain tech industry circles.
8. Car manufacturer Toyota and rival Mazda are expected to announce plans on Friday to build a $US1.6 billion U.S assembly plant as part of a new joint venture. The plant will be capable of producing 300,000 vehicles a year, with production divided between the two automakers, and employ about 4,000 people when it opens in 2021, a person briefed on the matter said on Thursday.
9. $US1 billion Dallas-based hedge fund Carlson Capital’s Black Diamond Thematic fund has lost 14.2% net this year through July 31, according to a client update reviewed by Business Insider, and bitcoin mania is partly to blame. “We are naturally disappointed by the performance of the first half of 2017,” the portfolio managers, Richard Maraviglia and Matthew Barkoff, wrote in the fund’s second-quarter letter.
10. Albert Edwards, a Societe Generale strategist and one of the world’s most bearish forecasters believes that household debt levels are in a worrying place. For Edwards, it’s the eve of the financial crisis all over again.”Every day more evidence mounts that almost exactly the same debt excesses that caused The Global Financial Crisis (GFC) in 2008, are present today,” he said. Slumping savings rates in the US and the UK were last seen in 2007, “just before the bursting debt bubble blew the global economy and financial system to smithereens.”
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