Markets unsettled by Brexit uncertainty as pound struggles to recover

 

7:59AM

Italian set for relief rally with elections (probably) averted

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Italian futures trading is is alone in looking positive this morning, with events in Rome likely to spill into a relief rally.

After days of talks, leftist Five Star (MS5) and Democratic Party (PD) lawmakers agreed to form a coalition, which will maintain the theoretically neutral figure of Giuseppe Conte as Prime Minister. The decision is expected to get the go-ahead soon.

That puts paid to right-wing populist Matteo Salvini’s ambitions for the job, for now. More importantly for markets, it dispels the uncertainty that a fresh general election would have entailed.

7:32AM

Agenda: Pound plunge and car industry stuck in reverse

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Good morning. The pound suffered one of its sharpest tumbles of the year yesterday as City analysts warned that Boris Johnson’s plan to suspend Parliament will send the currency even lower in the coming weeks. It later recovered some ground, while the FTSE 100 seemed unhinged from sterling’s movements.

5 things to start your day

1) Car production in the UK is stuck in reverse, falling 10.6pc in July —the 14th consecutive month of decline as Brexit and global economic uncertainties weigh. A total of 108,239 cars rolled off British production lines during the month, taking the year to date output to 774,760, almost a fifth down on the same point in 2018.

2) Running out of puff: the merger of tobacco giants Philip Morris and Altria faces uphill battle. Falling income. Hankering after faded glory days. An effort to stay relevant amid changing trends. In the music industry, getting the band’s original line-up back together is one of the oldest tricks in the book but often it says more about the absence of fresh ideas than the promise of renewed success.

3) Britain’s offshore wind farms are about to get bigger after the Crown Estate decided that seven sites could comfortably expand their operations without posing any threat to the environment. The expansion will add 2.85 GW to the UK’s wind farm capacity, equating to an extra 10pc in the UK’s offshore wind farm capacity. 

4) WH Smith is making more money from its shops in hospitals than from those in train stations as it told the City it expects to meet its profit targets. The retailer has been increasingly focusing on lucrative travel locations such as airports and railways stations, while its high street shops have seen sales dwindle in recent years.