Rolling coverage of the latest economic and financial news
- UK car sales recovered in April as lockdown eased
- Sales expected to have rebounded as showrooms reopened
- Yesterday: Fear of rising interest rates hit markets
- Janet Yellen later clarified remarks on interest rates
UK challenger bank Virgin Money has returned to profit – another signal that the economy is picking up.
We are cautiously optimistic about the improving outlook as the impact of the vaccination programme in the UK delivers positive revisions to economic expectations.
We’re continuing to manage through what is still an uncertain economic backdrop, but the bank is well placed, with a strong balance sheet, and through ongoing strategic delivery we have a clear path to long-term, improved sustainable returns.”
Related: Lloyds profits soar as Covid loan loss provisions released
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Last month, customers were able to buy cars in person from April 12 in England whilst delivery, click and collect and online services also facilitated purchases. Plants have continued to operate with COVID safe measures in place.
Sales stood at around 141,000 vehicles last month, still down 13% on the 2010-2019 monthly average, the Society of Motor Manufacturers and Traders (SMMT) said on Wednesday.
UK new car sales recover in April from last year’s lockdown hit https://t.co/JcwtVt772E pic.twitter.com/gZzZZDEFWM
Related: Mini will pause Oxford production line due to computer chip shortage
Related: Jaguar Land Rover to suspend work at UK plants amid computer chip shortage
Related: Fear of rising interest rates sends shares tumbling in both US and Europe
Yellen’s ‘rate hike’ comment, clarification later !
Yellen causes a flutter -> “It may be that int rates will have to rise a little bit to make sure our eco doesn’t overheat”
Yellen clarifies later in the day -> “Let me be clear,it’s not something Im predicting or recommending”
Ultimately, we all know that the investment made by the Biden Administration will need to be offset by tighter monetary policy in the future, so these comments should in no way shock but hearing it from a high-level official makes the market nervous.
Again, a world where we see lower liquidity from central banks is a world questioning how financial assets perform, as so much of the future performance has been brought forward. And as the gravy train is pulled away, it brings the extreme valuation into question and ascribes a lower risk premium. This will mean higher volatility.
On Wednesday, ADP employment, PMI composite final, and ISM services. ADP has been greatly underestimating the strength of payroll growth are on tap. An unexpectedly strong call by ADP (1 million is the high estimate) could lift forecasts further for Friday’s employment report. pic.twitter.com/kIvzL9Dv2d