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Summary

  1. Sterling hits new low against US dollar
  2. Supermarket downgrade hits FTSE 100
  3. Gold at two-year high and government bond yields tumble
  4. RBS chairman says banks are open for business

Live Reporting

By Tom Espiner

All times stated are UK

Get involved

Good night

That's all from the Business Live page for today. Join us again tomorrow from 06:00 for more business news as it happens.

Deutsche Bank: World's most dangerous bank?

BBC business editor Simon Jack writes...

Deutsche Bank logo and statue
Reuters

Deutsche Bank shares hit a new record low today. Its value has halved since the beginning of the year.

So is it now the most dangerous bank in the world?

According to the International Monetary Fund - yes.

Read more here.

Wall Street finishes up as investors digest Brexit comments

Wall Street stocks finished higher as officials sought to reassure investors of limited impact from Britain's decision to leave the European Union.

German Chancellor Angela Merkel said Britain's 23 June vote would have limited impact on the country's economy, while Federal Reserve Governor Daniel Tarullo said world financial markets are well prepared for it.

Minutes from the US central bank's June policy meeting showed policymakers decided in June that interest rate hikes should stay on hold until they have a handle on the consequences of the Brexit vote.

A recovery in oil prices and strong US services data also helped alleviate some concerns about a potential global economic slowdown.

The Dow Jones industrial average was up 78 points, or 0.44%, at 17,918.62, the S&P 500 had gained 11.18 points, or 0.54%, rising to 2,099.73 and the Nasdaq Composite had added 36.26 points, or 0.75%, finishing at 4,859.16. 

US sanctions Kim Jong Un and North Korea officials

Kim Jong Un
AFP

The US has decided to sanction North Korean officials, including leader Kim Jong Un, over "notorious" human rights abuses

The sanctions could have "global financial implications" for the individuals, the State Department said.

Kim, ten other individuals, and five government ministries and departments were sanctioned by the US Treasury Department.

State Department spokesman John Kirby said the sanctions were not just symbolic and could be picked up and observed by other countries now that they have been implemented by the United States.

"Quite frankly, there could be global financial implications for some of the individuals," Mr Kirby said.

Brexit a 'key global risk become reality'

Brian Coulton, chief economist at Fitch Ratings, says the Federal Reserve will be unlikely to raise US rates until later this year after Brexit and US jobs numbers.

With the Brexit vote, a key global risk identified by the Fed has become a reality. Along with the recent poor jobs numbers this will see the Fed sitting tight until late 2016. Medium term global growth risks have also risen after Brexit and this will [probably] mean a shallower trajectory for Fed normalisation [in] 2017 and 2018."

Aberdeen Asset Management suspends trading in UK property funds

Aberdeen Asset Management has suspended property fund trading "due to rapidly changing commercial property market conditions".

The firm is the latest major investor to suspend trading.

The halt will be from midday on 6 July 2016 to 7 July 2016 at midday, it said.

It will continue to offer clients an option to redeem, but it will impose a 17% penalty for withdrawals.

Messi to appeal tax fraud conviction

Do's and don'ts in North Korea

Bloomberg Business tweets...

France 'overtakes UK as fifth biggest economy' says Reuters

Peugeot 208 cars sit on a conveyor at the PSA Peugeot Citroen assembly plant in Mulhouse
Getty Images

France has overtaken the UK as the world's fifth largest economy after the slump in the pound following the Brexit vote, according to Reuters.

"With the pound falling below 1.17 euros overnight for the first time since 2013, that means the size of the British economy in 2015 is now equivalent to €2.172trn euros - less than France's official GDP of €2.182trn last year," the article said.

In 2014 the UK overtook France, six years after the financial crisis caused the pound to fall and allowed France to regain a position it had lost in 1997.

Fed minutes show Brexit unease

Federal Reserve policymakers decided in June that interest rate rises should stay on hold until they have a handle on the consequences of Britain's vote on EU membership, according to the minutes from the Fed's June policy meeting.

The minutes for the mid-June meeting, which took place before the 23 June referendum, showed widespread unease over Brexit. 

"Members generally agreed that, before assessing whether another step in removing monetary accommodation was warranted, it was prudent to wait for additional data on the consequences of the UK vote," the minutes said.

Policymakers also cited a slowdown in hiring by US employers as a reason for leaving interest rates unchanged last month.

More on the Buffett-Gates bromance

The story of how it all began between the two friends...

"At first glance, Warren and I may seem like a mismatch. I’m a technology nerd. He’s an investor who doesn’t use email. In fact, I never expected to be friends with him.

"In 1991, when my mother called me to come out to our vacation home on Hood Canal to meet a group of friends, including Warren, I didn’t want to go. I told her I was too busy at work. Warren would be interesting, my mother insisted. But I wasn’t convinced. “Look, he just buys and sells pieces of paper. That’s not real value added. I don’t think we’d have much in common,” I told her. Eventually, she persuaded me to go. I agreed to stay for no more than two hours before getting back to work at Microsoft.

"Then I met Warren. He started asking me some questions about the software business and why a small company like Microsoft could expect to compete with IBM and what were the skillsets and the pricing. These were amazingly good questions that nobody had ever asked. We were suddenly lost in conversation and hours and hours slipped by. He didn’t come across as a bigshot investor. He had this modest way of talking about what he does. He was funny, but what impressed me most was how clearly he thought about the world. It was a deep friendship from our very first conversation."

Oreos for breakfast

Bill Gates has blogged about his 25-year friendship with Warren Buffett. 

He says that Mr Buffett has helped him and his wife "do two things that are impossible to overdo in one lifetime: learn more and laugh more".

And the Microsoft founder also revealed that Mr Buffett eats Oreo biscuits for breakfast.

How billionaires pass the time...

Amazon on Brexit

We reported earlier that Amazon was creating 1,000 new jobs.

It was also an opportunity for journalists to ask about the impact of Brexit.

Doug Gurr, head of Amazon UK said that sales "were in line with expectations". 

"We don't know what the impact will be. As far as we're concerned right now, we're keeping our heads down and continuing to do what we do... we'll deal with whatever situation arises. "

Twitter live-streams Wimbledon

A story for tennis and Twitter fans.

Select tennis matches at Wimbledon are being live-streamed on Twitter. This marks the first time the tech firm has broadcast footage from a sports event in this way.

However it's a work in progress:

"This live-stream is an extremely early and incomplete test experience, and we'll be making lots of improvements before we launch it in its final form," Twitter said in a statement.

Read the full story here

US markets turn higher

After starting the session by trading lower, stocks on Wall Street are now heading higher.

The Dow Jones is up 0.33% to 17,898.66

The Nasdaq has risen 0.56% to 4,849.94

The S&P has jumped 0.39% to 2,096.72

Pound fall in perspective

Canada Life statement

Earlier we reported that Canada Life had suspended its property fund. This is what the company has said:

Following last month’s vote to leave the European Union, a combination of uncertainty around the pricing of commercial property assets and the recent rise in requests to withdraw from property funds, has meant Canada Life taking the decision to immediately defer requests for withdrawals. Deferring requests to withdraw allows us to protect the interests of all investors in the property fund, including those who plan to remain invested for the medium to long term.

Canada Life spokesperson

France lures London bankers with expat tax break extension

General view of Paris at dusk with the Eiffel Tower
Getty Images

The French government has pledged to make its tax regime for expatriates the most favourable in Europe in a landgrab for London banking business displaced by the UK's decision to quit the European Union.

"We want to build the financial capital of the future," Prime Minister Manuel Valls said. "In a word, now is the time to come to France."

Mr Vall's said France's already favourable tax regime for expatriates and French nationals returning from stints abroad would in future be applicable for their first eight years in France, up from five currently.

Venezuelan women cross border to buy food

BBC World Service

Border crossing between Venezuela and Colombia
AFP

About 500 Venezuelan women have broken through military border controls and rushed across a bridge into Colombia in search of food, reports BBC World Service.  

The women said they had bought rice, sugar, flour, toilet paper and oil in the north eastern Colombian city of Cucuta before returning to the Venezuelan town of Urena. 

Venezuela's economic crisis has led to acute shortages of basic commodities. 

These are said to be particularly severe near the border following its closure by the Venezuelan government almost a year ago. Read more here

Amazon plans to create 1,000 further UK jobs

Parcels are prepared for dispatch at Amazon's warehouse
Getty Images

Amazon has said it wants to create a further 1,000 permanent jobs in the UK this year "in preparation for the festive season". It announced in January that it would add 2,500 roles.

Doug Gurr, Amazon UK country manager, said:

We are hiring for all types of roles from software engineers, computer programmers and corporate managers in our R&D centres and head office, to operations managers, engineers, service technicians, HR roles and order fulfilment roles in our fulfilment centres."

Nutmeg expects all UK property funds to suspend trading

Shaun Port, the chief investment officer of online investment firm Nutmeg, has said it expects all property funds to suspend trading due to outflows after the Brexit vote.

We think all of these funds will now gate, probably for the remainder of the year. This is a stark reminder that low volatility does not mean low risk. Investors tend to invest on the understanding that they can sell their investment at any time, but the underlying assets - large buildings - are themselves very hard to sell at short notice. They require weeks or months to sell. Worse, some properties under development cannot be sold until development work is completed."

He added that Nutmeg fears a "vicious cycle in commercial property where the gating of withdrawals in one fund leads to higher withdrawals and further gating in other funds across the sector.

"As sentiment turns, funds could be forced into selling property assets at ever falling valuations, as more and more property comes onto the market, meaning the valuation of the fund also falls."  

HSBC analyst: 'Asda price cuts loom'

An Asda supermarket store logo
Getty Images

HSBC Global Researchhas downgraded its outlook for Tesco and Morrisons, saying it expects Asda is preparing to "fundamentally reposition on price".

HSBC analyst David McCarthy said if Asda cuts prices, that "could seriously damage sector profitability":

The chief executive of Wal-Mart International stated recently that Asda will prioritise sales over margin. We believe this suggests Asda may be preparing a major price repositioning. If Asda does reposition fundamentally, then it could seriously damage sector profitability. Consequently, we think it prudent to downgrade our ratings on Tesco and Morrison to reflect our growing concern."

'Half of property fund sector on ice' says analyst

More than half of the £25bn Investment Association property fund sector has now suspended trading, saysLaith Khalaf of Hargreaves Lansdown:

Over half of the property fund sector is now on ice, and will remain so until managers raise enough cash to meet redemptions. To do that they need to sell properties, and as any homeowner knows, that is not a quick or painless procedure. These funds are therefore likely to be closed for weeks and months rather than simply a matter of days. Clearly there has been a knee-jerk reaction to Brexit in the commercial property sector, which may moderate over time. Investors in commercial property funds should not make decisions in a panic. Granted the Brexit vote may have the potential to negatively affect the commercial property market in the short run, but long term investors should be willing to ride out periods of weakness, particularly when there has been such a sharp decline in fund prices without much evidence of a slowdown in the underlying property market."

BreakingCanada Life suspends property fund

Canada Life is the sixth property fund to suspend trading this week to halt outflows after the UK's Brexit vote.

Jaguar Landrover supplier: Brexit will push up UK car parts prices

Land Rover Freelander II SUV vehicles
Getty Images

A German supplier to Jaguar Land Rover, ZF, has said that a sharp fall in the pound following the Brexit vote will hurt the pockets of UK customers buying car parts made abroad.

ZF supplies automatic gearboxes which are assembled outside Britain to the UK-based carmaker.

"The things we supply them have become significantly more expensive for them to buy. This means that if the situation persists, we expect pressure on prices," ZF chief executive Stefan Sommer said.

The pound has fallen about 13% against the US dollar since the vote on 23 June, hitting a 31-year low this week. It has also dropped to a three-year low against the euro. 

BreakingColumbia Threadneedle is fifth firm to suspend property fund trading after Brexit vote

Columbia Threadneedle Investments says it has "temporarily suspended dealing in the Threadneedle UK Property Authorised Investment Fund", which is worth around £1.39bn.

We have not been immune to the recent trend of retail outflows from the sector and so far these requests have been met from the cash balance retained within the Threadneedle PAIF. However, it is expected that these requests to sell will continue for the time being due to uncertainty in the market following the UK referendum result, therefore the temporary suspension of dealings allows sufficient time for the orderly sale of assets, and protects the interests of all investors."

Columbia Threadneedle

EU regulators raid rail passenger transport companies

Train passengers walk along a platform after arriving at the railway station of Toulouse
Getty Images

European Union antitrust regulators said on Wednesday they had raided several rail passenger transport companies across the EU after concerns they may have taken part in a cartel to shut out competitors.

The raids were carried out on 28 June.

"The Commission has concerns that the companies concerned may have entered into anti-competitive agreements aiming to shut out competing rail passenger transport operators from the market, in breach of EU antitrust rules," it said.

Unannounced inspections are a preliminary step in investigating suspected cartels.

Sky Bet: Wales football win 'would lead to similar losses as Leicester win'

Cristiano Ronaldo (L) of Real Madrid CF clashes hands with his teammate Gareth Bale
Getty Images

Thousands of Wales fans are heading to France for the biggest football match in the nation's history.

Wales will appear in their first semi-final of a major tournament when they play Portugal in Lyon at 20:00 BST.

The winners of that game will face either France or Germany in Sunday's Euro 2016 final.

Bookies Sky Betting & Gaming said:

"The worst result they could see would be Wales winning 2-1 or 3-1, with both Bale and Ronaldo scoring. These results could lead to estimated losses similar to that incurred when Leicester won the Premier League."

BreakingHenderson suspends property fund trading after Brexit vote

Henderson Global Investors, which some analysts say is the second biggest UK property fund behind M&G, has suspended trading in its £3.9bn portfolio.

"Despite a strong underlying portfolio, the decision was taken due to exceptional liquidity pressures on the funds, as a result of uncertainty following the EU Referendum and the recent suspension of other direct property funds," the firm said.

M&G and Aviva suspend their property funds on Tuesday.

Tata 'wants to do the best by its steel workers'

Has Tata Steel been fast and loose with the British Steel pension scheme?

Small-business minister Anna Soubry thinks not:

"I absolutely believe they genuinely want to to the best thing by their workers... Tata... what they want to do is to do the right thing... by the pensions, or the members, rather, of the scheme."

Nationalisation of steel industry: 'Buy it for a quid?'

Going into negotiations for Tata Steel, the option of nationalisation of the industry was and is on the table, says small-business minister Anna Soubry - but she adds that it is "not necessarily a good idea".

She said that her phrase was "whether or not [to] buy it for a quid?"

"We looked at all options. It's not necessarily a good idea... but the idea is on the table." 

'No clarity on steel industry trade post-Brexit'

Anna Soubry
Getty Images

MPs are quizzing small-business minister Anna Soubry on the future for the UK's steel industry at a select committee hearing.  

She is asked for some clarity on how tariffs will be imposed on the UK on goods exported by the steel industry, and whether the UK will impose tariffs on Chinese steel imports, in the wake of Brexit.

She says: "I don't know,. I genuinely don't know. Work has begun... to make sure we get the very best deal out of a serious situation."

Conservative MP David Davies, who was pro-Brexit, asks Ms Soubry whether she was aware that Tata had said a weaker pound following Brexit would help its exports.

"The difficulty is it doesn't have the same [effect] on imports," she says, adding that the UK steel industry imports much of its raw materials.

Wall Street opens lower amid global growth fears

US stocks have opened lower as a potential global growth slowdown and Britain's vote to leave the European Union led investors to safe-haven assets.

The Dow Jones industrial average was down 44.58 points, or 0.25%, at 17,796.04, the S&P 500 was down 6.72 points, or 0.32%, at 2,081.83 and the Nasdaq composite was down 24.81 points, or 0.51%, at 4,798.09. 

Scots car sales fall in June

BBC Scotland business and economy editor tweets...

Builders back house-building 'renaissance' call

Building montage
Getty Images; PA

The Federation of Master Builders has backed a call by the Local Government Association (LGA) for a "renaissance" in house building.

Uncertainty following the Brexit vote "could make it difficult for private developers to rapidly build enough homes on their own," the LGA said.

The builders federation agreed:

At present, for every £1 spent on house building by the government, roughly £4 is spent on housing benefit. By increasing public spend on house building, homes will become more affordable and at the same time, significantly decrease the housing benefit bill."

Brian BerryChief executive of the Federation of Master Builders

How affordable is your house?

Office for National Statistics tweets

Those government bond yields in full...

London Business School lecturer Linda Yueh tweets:

View more on twitter

Shoppers could escape higher food costs

Sainsbury's sign
Getty Images

The fall in sterling since the Brexit vote won't necessarily mean higher prices for shoppers, according to Sainsbury's chief executive Mike Coupe.

He told shareholders at the supermarket's annual meeting: "It is not certain we will see inflationary pressures passed on to customers. It is difficult to judge how it will play out. Things may change in future, commodity prices could come down, exchange rates could change."

He said supermarkets might absorb higher costs because of competitive pressures and pointed out that Sainsbury's is hedged against volatile commodity prices and currencies.

'Don’t panic about the pound'

Jonathan Loynes, chief European economist at Capital Economics, is not so gloomy about the slide in sterling: 

The single biggest factor behind the pound’s fall has been a substantial shift in expectations for UK interest rates. This re-assessment of the policy outlook has been fuelled by the deliberately dovish signals from Bank of England Governor Mark Carney, which imply that the Monetary Policy Committee is quite happy with the pound’s current level and would not be averse to a further depreciation... It might be argued the pound’s latest decline has been a Goldilocks depreciation – not too big and not too small."