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  2. Pound retreats after UK data
  3. Growth in basic UK pay slips to 1.7%
  4. Markets await rate decision from US Fed
  5. High Street sales continue to fall for WH Smith
  6. Chairman of Anbang steps down

Live Reporting

By Russell Hotten

All times stated are UK

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Airline complaints soar

Jess Jackson leads protest at Chicago's main airport
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Civil rights leader Jess Jackson protests at Chicago's main airport about United Airlines

The US Department of Transportation says airline passenger complaints jumped by 70% in April after a series of high-profile incidents including the removal of a passenger from a United Airlines flight.

The Department said it received 1,909 complaints about airline service from consumers, up 70% on April 2016.

Many high-profile incidents on airlines have been captured on mobile phones in recent months, prompting congressional hearings with airline executives that raised questions about customer service and airline policies.

Wall Street close

A slide in technology stocks pulled down the Nasdaq, while the S&P 500 ended slightly lower as investors worried about the pace of economic growth after weaker-than-expected inflation numbers and an interest rate hike from the Federal Reserve.

However, the Dow Jones eked out another record close, ending up 47 points, or 0.22%, to 21,374.56. The S&P 500 lost 2.43 points, or 0.1%, to 2,437.92, and the Nasdaq dropped 25.48 points, or 0.41%, to 6,194.89.

The Nasdaq cut its loss in more than half in a late rebound, having earlier fallen 1%, while bank stocks buoyed the Dow Industrials.

US rethinks Chinese investment in AI start-ups

The Pentagon

Away from the dry - but important - world of US interest rates...

The Pentagon has raised concerns about China's access to artificial-intelligence-based technology developed in the US, according to Reuters.

The news agency says a leaked report proposes that export controls be updated to stop Chinese organisations being able to invest in some start-ups.

It suggests the move is needed to prevent their advanced algorithms being repurposed for the military by Beijing.

One expert said the report sounded credible.

"Quite a few people in the US security establishment see China as a likely potential adversary," Prof Trevor Taylor, from the UK's Royal United Services Institute for Defence and Security Studies, told the BBC.

Balance sheet reduction

Janet Yellen
Getty Images

Asked when the Fed might begin reining back its balance sheet, Janet Yellen told the news conference that no decision had been made - but it could begin “relatively soon” if the economy continues to improve.

Dollar up

Gold turned negative on Wednesday after the Federal Reserve increased interest rates, while the dollar sharply pared its losses against a basket of major currencies.

The dollar was up about 0.12% against both the pound and euro. Gold fell 0.2% to $1,263 an ounce.

Watching paint dry

Don't hold your breath for any rapid normalisation of Fed policy as it unwinds the massive injection of money put into the economy since the financial crisis.

While Janet Yellen gave a clear outline of intentions to reduce the Fed's $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities, her verdict on the pace of change was thus: "Like watching paint dry".

Credibility intact

Janet Yellen

The US economy is making "good progress" and a recent softening of inflation was transitory, Federal Reserve chairwoman tells a press conference.

Conditions are in place that are likely to justify a further rate rise this year, she said.

She also defended the Fed against criticism it has got its economic assessments wrong this year.

The central bank's credibility had not been "impaired", Ms Yellen insisted.


The big takeaways were as expected. What is noteworthy is that today Yellen laid out the balance sheet reduction plan with a lot more detail. Obviously with the big drop off in inflation this morning, which was a bit of a surprise, and the recent softening of economic data in general, it certainly gave the Fed pause with regards to September.

The market's not reacting much because the 25 basis point increase was widely expected. In the bond market we're still range bound. For investors it's still a yield grab in the credit markets even though the credit markets are very expensive. Bond investors don't have to worry about significantly higher rates for quite a while.

There's too many headwinds on the economic and geopolitical front to take up interest rates out of the recent range any time soon. We still think there's one more 25 basis point move, obviously data dependent but it might not happen until December if we continue to get soft inflation data."

Rich TaylorPortfolio manager, American Century Investments

'The bull market still has legs'

An interest rate rise today was highly expected and shows the Fed continues to be confident in moving towards normalizing monetary policy. Despite recent underwhelming jobs numbers, the underlying US economic data remains robust enough to warrant tightening.

While the economy is bouncing back from a weak first quarter, earnings have been strong and even in the wake of continued political uncertainty, corporate confidence remains secure. The market has demonstrated that it is comfortable with gradual rate hikes and will be reassured that the Fed has today committed to its promises. We expect at least one more rate hike this year but incoming data will influence future decisions.”

The next step for the Fed will be to reduce its balance sheet and stocks could experience bouts of volatility in the coming months due to both political surprises and Fed policy communications. The bull market still has legs, but investors should be aware that risks are elevated.”

Kully SamraUK managing director, Charles Schwab

US shares tick higher

Wall Street road sign

US share markets ticked higher on the rate rise news - just. The Dow, S&P and Nasdaq edged back into positive territory. The dollar pared earlier falls and was down 0.4% about 15 minutes after the announcement.

Getting back to normal

Federal Reserve building
Fed's headquarters

In its statement following a two-day meeting, the Fed's policy-setting committee indicated the economy had been expanding moderately and said a recent softening in inflation was seen as transitory.

The Fed gave a clear outline on its plan to reduce its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities, most of which were purchased in the wake of the 2007-2009 financial crisis and recession.

"The committee currently expects to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated," the Fed said in its statement.

Rate rise based on solid economic growth

The quarter-point rise in the benchmark interest rate lifts the Federal Reserve's target range to 1%-1.25%.

It's the second time in three months rates have risen.

The Fed cited US economic growth and job market strength, and announced it would begin cutting its holdings of bonds and other securities this year.

BreakingUS rates rise 0.25%

The US central bank has raised interest rates by 0.25%, and says another rise this year is likely.

The Federal Reserve also signals possibly three rises in 2018.

Bank shares fall

Shares in US banks have fallen as investors await an imminent announcement from the Federal Reserve on interest rates.

The KBW Regional Banking index has fallen 2.5%, while the S&P 500 Banks index is down 1.6%, with weak inflation data seen as limiting the Fed's scope for action over the coming months.

JP Morgan Chase shares are down 1.4% and Goldman Sachs' are 1% lower.

The Fed's announcement will be followed by a press conference from Fed chairwoman Janet Yellen outlining her views on the US economy.

Although most economists are still forecasting a rate rise today, they have cooled on whether there could be one or two more hikes this year.

"In my view there's no question that we'll get a rate hike. What matters most in today's statement is how the Fed signals the next rate hike and perhaps even more critically what the reduction in the balance sheet will be," said Frances Donald, senior economist, Manulife Asset Management.

VW agrees guarantee over diesels

VW logo
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The German car giant Volkswagen has agreed to provide a two year guarantee for car owners whose vehicles suffer failures after having them modified to remove so-called 'defeat device' software.

The company has recalled millions of vehicles in the wake of a scandal over the manipulation of emissions tests. But many owners have complained that their cars have subsequently broken down.

In the aftermath of the diesel emissions scandal, Volkswagen agreed to modify millions of vehicles in Europe which were equipped with software capable of undermining the emissions testing process.

However, some owners have since complained that their cars have suffered expensive failures, or lost performance, after having the modifications carried out.

Volkswagen now says that as a 'trust building measure' it will offer a two year guarantee covering 11 key parts of the fuel injection and emissions control system. Parts will be replaced free of charge, provided the car has been serviced properly.

Scaling new heights

Hybrid Air Vehicles

The world's longest aircraft has successfully completed its fourth test flight, reaching the highest altitude it has attained so far.

The Airlander 10 - a combination of a plane and an airship - took off near its base at Cardington Airfield, Bedfordshire.

During the flight, which lasted about three hours, the 302ft (92m) long craft reached 3,500ft (1,067m).

Hybrid Air Vehicles said it was "a hugely successful flight".

Oil prices weigh on FTSE 100 shares

Britain's blue chip FTSE 100 fell 0.35% to 7,474.4 points, while the mid caps managed to end in positive territory, up 0.58% at 19,974.7.

Housebuilders had suffered a sell-off in the immediate aftermath of the UK's general election, which resulted in a hung parliament, but a trading update from Bellway eased investors' concerns as the firm said demand had not slowed in the run-up to the election.

Barratt, the UK's biggest builder of homes, closed up 3.2%, making it the biggest gainer on FTSE 100. FTSE 250-listed Bellway rose 5.9%.

A fall in crude oil prices, following reports showing that US crude inventories were still increasing, weighed on energy stocks, which took most points off the FTSE.

Shares in BP and Royal Dutch Shell fell 1.8% and 1.3% respectively. Miners were also lower, with Anglo American and Glencore both down more than 2.5%.

Revenues from on-demand streaming to soar

Crazy from Orange is the New Black
Orange is the New Black has been one of Netflix's blockbusters

Netflix and Amazon are set to overtake UK cinemas to become the biggest box office moneymakers by 2020, says a report.

Consultancy firm PwC says revenues from streaming on-demand film and TV will grow by more than 30% to £1.42bn, edging ahead of the £1.4bn in estimated earnings from cinemagoers.

“Demand for internet video shows no signs of slowing down,” Phil Stokes, UK head of entertainment and media at PwC told the Guardian. “The figures do not signal the death of film."

Wall Street markets tread water

US stocks have failed to kick on after opening higher at the start of trading. The Dow Jones and Nasdaq are now fractionally up, while the S&P 500 is down 0.12%.

There is nervousness ahead of an announcement later of the Federal Reserve's interest rate decision.

And a set of weak economic data has weighed on some shares, especially banks. US retail sales recorded their biggest drop in 16 months, while consumer prices fell unexpectedly in May, raising questions about the Fed's ability to further tighten monetary policy.

While traders polled continued to see a more than 93% chance for the Fed to raise rates at the end of the two-day meeting on Wednesday, they dialed back the odds of a third hike this year.

Review after lottery ticket sales fall

Lotto raffle ticket

National Lottery operator Camelot is to conduct an in-depth review of its strategy following an 8.8% drop in ticket sales.

Camelot said total ticket sales fell to £6.9bn for 2016/17 from a record £7.5bn the previous year.

Total returns to good causes were lower than the previous year, mainly because of a "disappointing" performance across the National Lottery's range of draw-based games - especially on Lotto.

EuroMillions also had a soft first six months in 2016/17 but its performance improved significantly over the second half.

Although the latest results reflected Camelot's fourth highest yearly sales, the company is facing increased competition from secondary lottery products such as Lottoland.

The cost of playing EuroMillions increased by 50p to £2.50 a line and players had to choose from an extra number under changes introduced in September that decreased the odds of winning the jackpot but promised bigger prizes and double the number of UK millionaires.

Changes to the Lotto draw in 2015 saw the number of balls increase from 49 to 59 and the chance of winning the jackpot decrease from one in 14 million to one in 45 million.

The strategy review will focus on four key business areas: commercial plans to boost sales performance, investment in technology and systems, the current business structure, and long-term succession.

Brexit: compromise and pragmatism needed

UK and EU flags
Getty Images

The British aerospace industry has rejected Theresa May's Brexit mantra of "no deal is better than a bad deal".

In a further sign that business lobby groups feel more emboldened since the Conservative Party lost its majority last week, trade body ADS warned that "no deal is the worst outcome for the UK".

ADS, which represents the aerospace, defence, security and space sectors, added that since the "political context" has changed, a fresh approach to Brexit is needed for the £31.8bn sector.

Chief executive Paul Everitt said: "The political context in the UK and elsewhere in Europe has changed.

"Last week, the country signalled it wanted a more collaborative approach. The Government needs to build a strong consensus on the priorities and options for a successful Brexit.

"No deal is the worst outcome for the UK and Europe. Finding the best agreement will require compromise and pragmatic decisions by the UK and its European partners."

Telegraph boss out

BBC media editor Amol Rajan tweets:

View more on twitter

FTSE 100 update

FTSE graphic

London's index of leading shares looks to be going into reverse. Most of the gains made during the morning have been lost, with the FTSE 100 up just 0.06% at 7,504.6 points.

The FTSE 250 has fared better. It has been broadly about 0.7% higher for the past few hours.

Egypt bids to lure more foreign investment

Egypt has scrapped currency controls in a bid to lure back foreign investment.

The central bank had a $100,000 limit on individual bank transactions that was imposed in 2011 after the political uprising.

"This decision comes as the central bank continues to take steps in the framework of economic reform which it began to implement last year, and in order to strengthen confidence in the Egyptian economy," a central bank statement said.

The unknown

BBC New York business correspondent tweets:

Wall Street ticks higher ahead of interest rate decision

US stocks opened slightly higher on Wednesday, with the Dow Jones hitting a record intraday high as technology stocks rose.

The rise comes ahead of what many analysts believe will be an interest rate hike by the Federal Reserve later today.

The Dow Jones industrial average was up 19.35 points, or 0.09%, at 21,347.8, the S&P 500 was up 3.14 points, or 0.12%, at 2,443.5 and the Nasdaq was fractionally higher at 6,226.9.

Oil prices fall

oil rig worker

Oil prices fell on Wednesday after reports showed global supply was rising and US crude inventories were still increasing, raising concerns the market could stay oversupplied for longer than expected.

Brent crude oil fell by 28 cents to $48.44 a barrel, while US crude futures were down 29 cents on the day at $46.17.

Crude prices have fallen more than 10% since late May, pulled down by heavy global oversupply that has persisted despite a move led by the Organization of the Petroleum Exporting Countries to curb production.

US inflation falls ahead of Fed meeting

US petrol station
Getty Images

A falling in petrol prices pushed US consumer prices lower in May, the Labor Department has reported.

The Consumer Price Index, which tracks changes in the cost of household goods and services, fell 0.1% compared to April.

The news comes just hours before the Federal Reserve finishes its two-day monetary policy meeting and is widely expected to increase interest rates, despite weak inflation and tepid wage growth.

Dockers down tools

Port of Valencia
Cranes lay idle in Valencia port

Spain's dock workers have started a two-day nationwide strike, stepping up a months-long fight to preserve their jobs after the adoption of an EU-triggered reform they say puts them at risk.

The stoppage risks impacting the economy of a country in which more than 60% of exports pass through its main ports, particularly in the food and auto sectors, which are key engines for growth.

The new decree deregulates the hiring of dock workers to load and unload ships in Spain at the request of the EU, which ruled that Madrid must reform the sector or face sanctions.

All 6,150 dockers around Spain are on strike, bar those who will ensure a minimum service for activities deemed essential, a spokeswoman for their main CETM union told AFP.

US retail sales weakest in 16 months

US shopper
Getty Images

US retailers in May reported the biggest decline in sales in 16 months, largely because of lower petrol prices and fewer Americans buying new cars and trucks.

Sales fell 0.3%, the biggest drop since January 2016, after rising 0.4% in April.

The only ray of light was online, as sales jumped 0.8%, although traditional department store sales dropped 1%.

Air Berlin stays aloft

Air Berlin plane
Getty Images

Struggling German airline Air Berlin says it has enough money to stay solvent despite suffering heavy losses and a string of cancellations.

The carrier has posted losses of 1.2 billion euros over the last two years and depends financial support from key shareholder Etihad airlines.

A report this week claimed that on average 24 flights per day had been cancelled or seriously delayed this month.

But on Wednesday a spokeswoman said customers could keep booking Air Berlin flights "without worries".

"We are flying reliably again and have a grip on operational problems," she said.

She said "insolvency is not an issue" and that Etihad had pledged its support through to October 2018.

Lobby group welcomes new City Minister

Canary Wharf
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TheCityUK has welcomed the appointment of Steve Barclay, the new City Minister, and urged him to champion the interests of the financial services sector.

The lobby group campaigned vigorously against Brexit and now wants to keep the closest relationship possible with the EU. Mr Barclay, who has a long track record in the financial services industry, was a Leave supporter.

Miles Celic, chief executive of the TheCityUK, said: “The industry’s continued success relies on the UK remaining an attractive and competitive place to do business and the right policy environment will be critical to this."

FTSE climbs as pound falls

US traders

The FTSE 100 is up 0.5% at 7,540.18 thanks in part to the falling pound.

Among the strongest performers are energy firm Centrica, up 3.2%, miner Fresnillo, up 2.8%, and investment group Old Mutual, up 2.3%.

Sterling has slipped on weak wage growth figures from the ONS and currency traders are nervous ahead of a US Federal Reserve meeting later.

A weak pound means the international profits of FTSE 100 firms are worth more when converted back in sterling.

Experience the desert with virtual reality

Some nice video below of BBC technology correspondent Rory Cellan-Jones using virtual reality technology.

View more on twitter

IMF upgrades growth outlook for China

Getty Images

The International Monetary Fund has raised its forecast for China's economic growth this year to 6.7% from a previous forecast of 6.6%.

IMF first deputy managing director David Lipton said China had the "potential to safely sustain strong growth over the medium term".

However, he said this would require deep reforms to transition from its current growth model that relies on "credit-fed investment and debt”.

Zugzwang anyone?

When an obscure or new term enters the mainstream, journalists tend to leap on it.

So the deployment of the chess term zugzwang has been quite exciting.

Zugzwang describes the situation where your next move can only make your position worse.

It has been used to describe the Conservative's position following the election result.

'Astonishingly' weak wage figures

Today's UK wage figures were "astonishingly" weak says Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

"The painful experience of 2011/12, when inflation surged but wage growth weakened, appears to be repeating; firms are responding to rising raw material costs and uncertainty about the economic outlook by doubling down on pay awards. The fall in wage growth also partly reflects the fading of support from the National Living Wage."

Why are wages not rising more quickly, given that unemployment is so low?

Well according to Mr Tombs that's because there are many workers who want to work more hours but can't. Also the UK can still draw on workers from the European Union, were unemployment is much higher.

EU competition watchdog to investigate Nike

Nike shoes
Getty Images

The EU is investigating Nike, Universal Studio and Hello Kitty-owner Sanrio over claims they stopped retailers from selling merchandise across Union borders.

EU Competition Commissioner Margrethe Vestager said the probe would explore whether the firms broke competition rules, by restricting a retailer's ability to sell licensed goods cross-border and online.

"We are going to examine whether the licensing and distribution practices of these three companies may be denying consumers access to wider choice and better deals in the Single Market," she said.