World Markets
STOCK MARKETS
Aug 1 prev %chg
S&P 500 3009.38 2980.38 0.
Nasdaq Composite 8296.56 8175.42 1.
Dow Jones Ind 27126.47 26864.27 0.
FTSEurofirst 300 1526.84 1519.87 0.
Euro Stoxx 50 3486.68 3466.85 0.
FTSE 100 7584.87 7586.78 -0.
FTSE All-Share 4132.23 4134.03 -0.
CAC 40 5557.41 5518.89 0.
Xetra Dax 12253.15 12189.04 0.
Nikkei 21540.99 21521.53 0.
Hang Seng 27565.70 27777.75 -0.
MSCI World $ 2187.56 2203.40 -0.
MSCI EM $ 1037.01 1043.14 -0.
MSCI ACWI $ 524.35 528.07 -0.CURRENCIES
Aug 1 prev
$ per € 1.106 1.
$ per £ 1.215 1.
£ per € 0.910 0.
¥ per $ 108.185 108.
¥ per £ 131.439 132.
SFr per € 1.099 1.
€ per $ 0.904 0.Aug 1 prev
£ per $ 0.823 0.
€ per £ 1.099 1.
¥ per € 119.637 120.
£ index 75.105 74.
SFr per £ 1.208 1.COMMODITIESAug 1 prev %chg
Oil WTI $ 56.69 58.58 -3.
Oil Brent $ 63.33 64.63 -2.
Gold $ 1427.55 1425.90 0.INTEREST RATES
price yield chg
US Gov 10 yr 127.38 1.96 -0.
UK Gov 10 yr 149.29 0.59 -0.
Ger Gov 10 yr -0.45 -0.
Jpn Gov 10 yr 121.67 -0.14 0.
US Gov 30 yr 104.31 2.48 -0.
Ger Gov 2 yr 101.18 -0.78 0.price prev chg
Fed Funds Eff 2.38 2.39 -0.
US 3m Bills 2.12 2.10 0.
Euro Libor 3m -0.42 -0.42 0.
UK 3m 0.77 0.77 0.
Prices are latest for edition Data provided by MorningstarMEHREEN KHAN— BRUSSELS
VICTOR MALLET— PARISEU finance ministers are to vote today
on Europe’s candidate to succeed
Christine Lagarde as managing direc-
tor of the IMF in the hope of breaking
an impasse that has divided eurozone
capitals.After weeks of negotiations that have
failed to come to a consensus, ministers
from the EU’s 28 finance ministries will
vote via email on a shortlist of at least
five names, according to officials
involved in the process.
The decision to hold a vote, an option
that had initially been rejected by some
capitals, including Berlin, was designed
to whittle down the possible candidates.
It came after Bruno Le Maire, France’s
finance minister, who has been chairing
negotiations, failed to broker a deal.European diplomats involved in the
talks said the decision was designed to
press some candidates into withdrawing
fromtherace.
Late yesterday Mário Centeno, the
eurogroup’s Portuguese chief, did pull
out, leavingfour candidates in the fray.
The shortlist includes Jeroen Dijssel-
bloem, Dutch former chair of the euro-
group of EU finance ministers; Olli
Rehn, Finland’s central bank governor;
Nadia Calviño, Spain’s finance minister;
and Kristalina Georgieva, Bulgarian
World Bank chief executive.
Diplomats expected Mr Dijsselbloem
and Ms Georgieva to emerge as the two
candidates in any final run-off vote. In
that case, the Brexit-backing new UK
government could have the casting vote.
As the EU third-biggest member
state, Britain’s vote may prove decisive
for either of the candidates, who havedivided the support of Paris and Berlin.
At a meeting of the G7 finance ministers
last month, UK diplomats indicated
they would back a candidate from a
non-eurozone country.
Candidates had to submit their names
for inclusion in the ballot by last night.
The vote will be held under the EU’s
qualified majority rules in which bigger
member states carry more weight.
Mark Carney, the Bank of England’s
Canadian governor, is widely regarded
as a competent candidate butdeemed by
somecapitals “not European enough”,
despite holding UK and Irish passports.
In the past, Europe has nominatedthe
head of the IMF while the US chooses
one of its citizens to lead the World Bank.
Europe’s failure to unite on a cand-
idate has raised expectations that alter-
native candidates, including Mr Carney,
might stand a chance.Europe impasse forces vote on picking
candidate to succeed Lagarde at IMF
FRIDAY 2 AUGUST 2019Briefing
iTrump escalates trade war with Beijing
US markets turned sharply lower after Donald
Trump said the US would place a 10 per cent tariff
on $300bn of additional Chinese goods, in an
escalation of the trade war between the world’s
two largest economies. A series of tweets from the
US president yesterday afternoon shook a fragile
truce with China, sending the yield on the 10-year
Treasury note to its lowest level since 2016 and
pushing down stock prices after a rally earlier in the
day.—PAGEiJavid prioritises no-deal preparations
The chancellor Sajid Javid has ordered HM Revenue
& Customs to make preparations for a no-deal
Brexit on October 31 its “absolute top priority”
amid fears exporters could face chaos.—PAGEiBMW chief warns Johnson on Brexit
Harald Krüger, pictured, has
urged Boris Johnson to seek a
“compromise that is acceptable
to everyone”, warning that both
sides will lose if the UK leaves
the EU without a deal.—PAGEiRevolut in stock trading challenge
The digital bank has taken on established trading
platforms, such as Hargreaves Lansdown, with the
launch of a commission-free stock trading service
in a bid to “democratise” investing.— PAGE 17iShell profits tumble by a quarter
The Anglo-Dutch oil group has seen earnings fall
26 per cent because of lower prices and widespread
divisional weakness, triggering a close to 5 per cent
drop in its share price.— PAGE 14; TAIL RISK, PAGE 13iFactory output at lowest level since 2013
Manufacturing is “suffocating” as a downturn in the
sector continued into July, leaving factory activity
at its lowest level since 2013, amid continuing
Brexit uncertainty and a global slump.—PAGEDatawatch
UK £2.70Channel Islands £3.00; Republic of Ireland €3.© THE FINANCIAL TIMES LTD 2019
No: 40,158★Printed in London, Liverpool, Glasgow, Dublin,
Frankfurt, Milan, Madrid, New York, Chicago, San
Francisco, Orlando, Tokyo, Hong Kong, Singapore,
Seoul, Dubai, DohaSubscribeIn print and online
http://www.ft.com/subscribenow
Tel: 0800 028 1407For the latest news go to
http://www.ft.comWORLD BUSINESS NEWSPAPER
If the face fits
London leads the west in facial
recognition systems— BIG READ,PAGE 9
Gillian Tett
Family offices invest in real estate as
the wealthy hunt for yield— PAGE 11
It doesnt matter
Why we should stop worrying about
punctuation— HENRY MANCE, PAGE 10
Nearly a third
of adults aged
over 16 across
the EU say they
could not afford
a one-week
annual holiday
away from home.
The countries
with the highest
proportions are
Romania, Croatia
and Greece.Staycation
of Europeans who can’t a ord
to go away for one week a year Romania
Croatia
Greece
Italy
Ireland
Spain
France
UK
SwedenSource: EurostatDELPHINE STRAUSSThe Bank of England has flagged a one-
in-three chance that the UK economy
will shrink at the start of next year as
Brexit uncertainty and global trade ten-
sions hit growth.
Even without taking into account the
rising possibility of a no-deal Brexit, the
BoE cut its central forecast for growth
this year and next. It predicted output
would rise 1.3 per cent in both 2019 and
2020 even if it were to cut interest rates,
as markets expect. The BoE hadforecast
in May that output would grow 1.5 per
cent and 1.6 per cent respectively.
It added in its August inflation report
there was a 33 per cent probability of
negative growth in the first quarter of
2020 if interest rates remainedunchanged — the highest chance of a
contraction it has seen sincethe Brexit
referendum in August 2016.
Mark Carney, the BoE governor, dis-
missed suggestions it was guilty of the
“gloomster” attitude decried by Boris
Johnson, the prime minister.
“It is clear the level of uncertainty is
affecting business,” Mr Carney said. “It
is also clear there has been a substantial
shortfall in investment. It is beginning
to become clear that the trade response
to lower sterling has begun to fade...
these consequences are there.”
Sterling hit a 30-month low against
the dollar yesterday of $1.2100 before
recovering to $1.2113, leaving it around
levels last seen in January 2017.
The bank’s Monetary Policy Commit-
tee has declined to set out any alterna-tive forecasts based on a less benign out-
come, such as an EU exit on October 31
without a withdrawal agreement, saying
that a deal with Brussels remains official
government policy.
But Mr Carney said: “In the event of a
no-dealBrexit, sterling would likely fall,
the risk premiums on UK assets would
rise and volatility would spike higher.”
Unlike the US Federal Reserve and
European Central Bank, the BoE
showed no sign of responding to the
weakening outlook by cutting rates.
Instead, the MPC voted unanimously to
hold rates at 0.75 per cent and signalled
that borrowing costs would eventually
need to rise to keep inflation at its 2 per
cent target — given an orderly Brexit
and a recovery in global growth.
It also stuck to its position that inter-est rates could move in either direction
in the event of a no-deal Brexit.
The BoE’s central forecasts were
premised on a smooth Brexit that would
boost the economy. They show growth
recovering to 2.3 per cent in 2021 and
inflation rising to 2.4 per cent on a three-
year horizon. The bank acknowledged
this forecast overstated inflation bec-
ause it built in current exchange rates
and market expectations that interest
rates will fall.
But it said alternative forecasts, strip-
ping out these market distortions, also
showed excess demand stoking infla-
tion, suggesting interest rates would
need to rise after an orderly Brexit.
BoE in no mood for rate cutpage 3
Tariffs ramp up tensionpage 6
BMW urges against no-dealpage 11Bank of England forecasts 33%
chance of economy shrinking
3 Carney cites Brexit uncertainty 3 Sterling at 30-month low 3 Trade tensions hit growth
Mark Carney
shrugged off
Boris Johnson’s
suggestions of
a ‘gloomster’
attitude and
instead pointed
to evidence
of a decline in
investmentDeadly ground
Congo losing
Ebola battle
Members of a safe burial team carry the
coffin of an Ebola victim to a grave last
month in Beni, in the Democratic
Republic of Congo.
Yesterday marked the first anniver-
sary of the confirmation of the first
cases in the latest outbreak in Congo, the
longest and deadliest of10 it has suf-
fered since the virus was first identified
in 1976. To date, 1,803 people have died
in the epidemic, the worst since 11,
lives were lost in west Africa in 2014-16.
Thousands of health workers have
been deployed and more than 170,
people have received a vaccine but so far
the outbreak has not been stopped. In a
dispatch from Beni, the Financial Times
reports on efforts to halt the epidemic.
Congo officials desperatepage 7
John WesselsWhile Wednesday’s interest rate cut
was broadly in line with expectations,
Jay Powell, the Federal Reserve
chairman, confused the financial
markets afterwards when he said
the move was a ‘mid-cycle adjustment
in policy’ rather than the start of
a full- blown easing cycle, stressing
there was no guarantee of more
stimilus. His unwillingness to commit
to deeper monetary easing contrasted
with earlier dovish messages from the
Fed and has spooked investors.
AnalysisiPAGE 6Powell’s rate cut remarks
leave markets flustered
РЕ
ЛИЗППОДГОТОВИЛАГГРРУУПППАFrancisco, Orlando, Tokyo, Hong Kong, Singapore,
АFrancisco, Orlando, Tokyo, Hong Kong, Singapore,"What'sNews"VK.COM/WSNWSVK.COM/WSNWS