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  2. Wage growth remains below inflation
  3. BoE deputy 'not ready' to raise rate
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Live Reporting

By Tom Espiner

All times stated are UK

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Good night

That's all for another day on the Business Live page. Join us again tomorrow from 06:00.

US stocks close higher after Yellen comments

Janet Yellen, Fed Chair
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US stocks have closed higher after Federal Reserve Chair Janet Yellen said interest rates hikes would be gradual and would not have to rise much further to reach the neutral rate.

The Dow Jones Industrial Average was up 0.57% at 21,532.14, a new closing record.

The broad-based S&P 500 gained 0.7% to 2,443.48, while the tech-focused Nasdaq jumped 1.1% to 6,260.55.

Kaspersky 'a pawn in geopolitical game'

Eugene Kaspersky
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Russian cyber security firm Kaspersky Lab has reacted to a US government move restricting its activities, saying it has fallen victim to US-Russia global sparring.

The Trump administration on Tuesday removed the Moscow-based firm from two lists of approved vendors used by government agencies to purchase technology equipment, amid concerns its products could be used by the Kremlin to access US networks.

"By all appearances, Kaspersky Lab happened to be dragged into a geopolitical fight where each side is trying to use the company as a pawn in its game," RIA news agency quoted the firm as saying.

Nevada 'emergency' over lack of marijuana

Hilary Benn re-elected as Brexit committee chair

Hilary Benn
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Labour MP Hilary Benn has been re-elected as chair of the cross-party Exiting the European Union select committee.

He said:It is an honour... As the government negotiates our withdrawal from the EU, the committee will have a very important part to play in scrutinising both the negotiations on an agreement and the legislation that the government will be bringing before Parliament."

Hyperloop completes first full-systems test

A Hyperloop prototype
Hyperloop One

US start-up Hyperloop One says it has completed the first full-systems test of its futuristic rail transit system.

Based on an idea by tech entrepreneur Elon Musk, the Hyperloop aims to fire pods carrying people through reduced-pressure tubes at high speeds.

In theory it could one day travel at up to 750 miles per hour - a rate that would cut the 424-mile journey from London to Edinburgh to 50 minutes.

The start-up, which has raised $160m to date, said its test took place in May at the company's development track in the Nevada desert, and saw a vehicle coasting above tracks for more than five seconds using magnetic levitation.

The test vehicle reached speeds of 70mph, but the firm said its next goal was to ramp that up to 250 mph.

The firm says its system would be safer than passenger jets and cheaper to run than high-speed trains.

Wetherspoon boss 'slinging mud' says CBI

Tim Martin
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The Confederation of British Industry (CBI) - which is, as you'd expect, normally quite august - has responded in very strong terms to Wetherspoon chairman Tim Martin telling the CBI's Carolyn Fairbairn to "put a sock in it" over Brexit.

A CBI spokesperson said:

"Rather than slinging mud, Mr Martin should know that all the major UK business groups have made clear the risks to the economy of leaving the EU without a deal.

"The prospect of multiple cliff edges – in tariffs, red tape and regulation - is already casting a long shadow over investment decisions for many firms in this country.

"The CBI and the wider business community is committed to making a success of the negotiations and helping to secure the most ambitious and comprehensive free trade deal ever agreed."

Mr Martin this morning used the medium of a Wetherspoon trading statement to say that organisations pointing out the potential economic perils of Brexit were "gloomsters" who could stymie UK negotiators' efforts:

"The public's message to Carolyn 'We're all doomed' Fairbairn, head of the CBI, and other gloomsters is: put a sock in it. We'll do well with or without a free trade deal, so stop tying the hands of our negotiators, who are doing their best to achieve a respectable outcome," he said.

It's worth pointing out here that a recent YouGov poll found that only 18% of people thought that the UK could get a good deal on Brexit given the result of the general election - 36% thought we would get a poor deal.

Brazil markets jump after Lula conviction

Daniel Gallas

BBC South America business correspondent

Stock markets are up in Sao Paulo. They jumped 1% in a matter of seconds after the news broke, and are still moving up.

A criminal conviction for Lula means he may not be able to run in next year’s elections. Polls show he is a frontrunner. Most market analysts believe a new Lula Presidency would undo the economic steps Brazil has taken to emerge from recession.

This – combined with yesterday’s approval of Michel Temer’s labour reforms – is a boost to Brazilian markets, despite other ongoing political scandals.

Nicky Morgan to chair Treasury Select Committee

Nicky Morgan
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Conservative politician and former education secretary Nicky Morgan has been elected to chair the influential Treasury Select Committee.

"Rt Hon. Nicky Morgan MP will formally take up the position of chair when the remaining members of the committee have been appointed by the House," the Treasury said in a statement.

Ms Morgan was in competition with five other Tory MPs to land the coveted role scrutinising the government's finances.

Brazil's ex-President Lula convicted of corruption


Former Brazilian President Luiz Inacio Lula da Silva has been convicted of corruption charges and sentenced to nine-and-a-half years in prison, court documents show.

The judge ruled he could remain free pending an appeal.

Lula has rejected claims he received an apartment as a bribe in a corruption scandal linked to state oil company Petrobras.

He says the trial is politically motivated and denies any wrongdoing.

Read more here.

Former Brazilian President Lula found guilty of corruption

Former President of Brazil, Luiz Inacio Lula da Silva
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Former Brazilian President Luiz Inacio Lula da Silva has been convicted of corruption in the first of five trials he faces, the Reuters news agency reports.

Mr Lula was sentenced to nine and a half years in prison and will remain free on appeal.

Lawyers for Mr Lula, still one of Brazil's most popular politicians, have said they would appeal a guilty ruling and have continuously criticised the trial as being a political witch hunt.

One down, at least one to go...

RBS logo
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The Federal Housing Finance Agency agreement means RBS has resolved one of the two major long-awaited settlements with US regulators over its selling practices of toxic mortgage-backed securities.

It is still to agree a settlement with the Department of Justice, as well other smaller claims related to mortgage-backed security mis-selling.

The expected fines have weighed heavily on the bank’s shares due to fears over the size of the settlements.

RBS said it had not started discussions with the Department of Justice (DoJ).

Chief executive Ross McEwan warned that the bank may need to set aside more cash to settle outstanding claims.

"We have always been very open about the fact there could be further provisions against the DoJ," he said.

He added it is "never a great experience for a chief executive to be writing such a large cheque".

RBS shares fell after the FHFA settlement announcement, but remained in positive territory.

Google wins challenge against 1.1bn euro French tax bill

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US internet giant Google won a court challenge against demands by French authorities that it pay 1.1bn euros (£970m) in back taxes.

The Paris administrative court ruled that Google Ireland was not subject to corporate and value-added taxes for the period 2005-2010, striking down the tax administration's demands for back payments.

The ruling in favour of Google, now part of Alphabet, followed a court adviser's recommendation that Google did not have a "permanent establishment" or sufficient taxable presence to justify the bill.

Canada economic performance 'excellent'

So why has the Bank of Canada decided to raise interest rates?

Governor Stephen Poloz says: "The most important thing is the economy clearly no longer needs as much as stimulus as we've been giving it... We're monitoring carefully how the economy continues to adjust."

Manuel Ortiz-Olave, a marker analyst at Monex Europe, says: "The Canadian economy’s performance has been excellent lately. It has seen a 3.7% increase in GDP in Q1 2017 (3.3% increase year-on-year in April 2017); the unemployment rate has been consistently decreasing since the beginning of 2015 to 6.5% - the lowest in nearly a decade, and the average earnings are at the highest level since April 2015."

Bank of Canada raises rates

The Bank of Canada has raised interest rates for the first time in nearly seven years citing confidence in it outlook for "above potential growth" .

But it said it will wait for more economic data before committing to its next move.

The hike brought the bank's official interest rate to 0.75% and boosted the Canadian dollar to a 10-month high.

Burberry and miners boost FTSE at the close

The FTSE 100 has closed higher after commodities stocks rose and luxury retailer Burberry jumped after stronger than expected sales.

The share index closed 1.19% higher at 7,416.93.

Digging deep?

RBS logo
Getty Images

So how will RBS pay for the net £3.65bn cost of the settlement with the with the Federal Housing Finance Agency (FHFA)?

It said the cost would be largely covered by funds it has already set aside.

But it will take a $196m (£151m) charge in its second quarter results for the deal.

RBS had already put £6.6bn by to cover US mis-selling claims.

The bank's finance chief Ewen Stevenson said the FHFA settlement was "in the region of what we'd been anticipating".

Yellen cautions about US inflation

The US economy is healthy enough for the Fed to move forward with plans to raise rates and begin winding down its massive bond portfolio, though low inflation and a low neutral rate may leave the central bank with diminished leeway, Fed Chair Janet Yellen has said.

Her appearance comes as the Trump administration mulls whether to replace her when her term ends in February.

Following her remarks, US stocks rose, while yields on Treasury bonds fell, and the dollar declined against a basket of currencies.

Will Janet Yellen serve out her term as Fed chair?

Federal Reserve chair Janet Yellen is asked: if she is renominated as chair by Donald Trump in 2018, would she accept?

She reiterated that she intends to serve out her term, and hasn't considered a further term.

US banks slip after Yellen's rate hike comments

Morgan Stanley and Bank of America have slipped about 1%, while other top banks have fallen about 0.5%, after Fed Chair Janet Yellen tempered the pace of future rate hikes in testimony to Congress.

Fed rates "would not have to rise all that much further" to reach what it considers a neutral rate that neither encourages nor discourages spending and investment, she said.

"It [Ms Yellen's comment] was a little bit more dovish than most had thought. She said rates won't have to rise much further to get to neutral, I thought that was key," said Richard Scalone, co-head of foreign exchange at TJM Brokerage.

Yellen asked about Trump and Russian money

Janet Yellen is asked whether the Federal Reserve looked into whether President Trump or his family members benefited from Russian money laundering that Deutsche Bank was fined $630m for in January.

"We haven't in the course of our investigations looked into individual transactions with the President," she says.

Wall Street higher after Yellen's rate hike comments

Wall Street traders
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US stocks are higher in early trading after Federal Reserve Chair Janet Yellen said interest rates hikes would be gradual and will not have to rise much further to reach neutral rate.

Ms Yellen, in a prepared testimony to Congress, said the economy is healthy enough to absorb further gradual rate increases and the slow wind down of the Federal Reserve's massive bond portfolio.

The Dow Jones Industrial Average was up 153 points at 21,562, the S&P 500 was 17 points higher at 2,443, and the tech-heavy Nasdaq was up 52 points at 6,246.

US only needs "gradual interest rate rises"

Janet Yellen

US federal reserve chair Janet Yellen has said she thinks only "gradual" interest rate increases will be needed over the next few years, as the US economy grows stronger and employment expands.

Giving her semi-annual testimony to Congress, Yellen said: "The federal funds rate would not have to rise all that much further to get to a neutral policy stance".

She added that temporary factors were to blame for a recent slowdown in inflation, but said officials are watching developments in order to ensure that price gains take the figure back towards their 2% target.

RBS settlement breakdown

RBS logo
Getty Images

So how does RBS' $5.5bn settlement break down? Freddie Mac (the Federal Home Loan Mortgage Corporation) will get $4.525bn, and Fannie Mae (the Federal National Mortgage Association) will get $975m.

The lawsuit relates to mortgage-backed securities bought by Fannie Mae and Freddie Mac between 2005 and 2007.

FTSE boosted by energy firm shares

The FTSE 100 has touched its highest level in two weeks and is up more than 1% as energy stocks rose after a drop in US fuel inventories.

Luxury retailer Burberry has also jumped after stronger than expected sales.

Brexit: EU stands firm on citizen rights

European Union's chief Brexit negotiator Michael Barnier addresses a news conference at the EU Commission headquarters in Brussels, Belgium
Michael Barnier set out his priorities at a news conference in Brussels

The EU's top negotiator says European courts must be responsible for protecting citizens' rights.

European Union's chief Brexit negotiator Michel Barnier addresses a news conference at the EU Commission headquarters in Brussels, Belgium

Brexit: EU stands firm on citizen rights

The EU's top negotiator says European courts must be responsible for protecting citizens' rights.

Read more

Canadian universities attracting more overseas students

Students at Toronto University

Canadian universities are seeing a surge in applications from overseas students.

Students who might once have headed for the United States now seem to see Canada as a North American alternative.

A study last week suggested that overseas students were worth $36bn (£28bn) per year to the US economy.

But Canadian universities are seizing an opportunity from the Trump administration in the US and the Brexit vote in the UK to present themselves as a more outward-looking alternative.

Existing assets to cover most of RBS settlement

While RBS has been fined £4.2bn ($5.5bn), the penalty will only cost it £3.61bn ($4.6bn) because it is going to be reimbursed £581m ($754m) under indemnification agreements with third parties.

The cost of the settlement will be largely covered by existing assets.

Settlement "important step" for RBS, says McEwan

RBS chief executive Ross McEwan said the settlement with the FHFA was a key moment for the bank.

“Today’s announcement is an important step forward in resolving one of the most significant legacy matters facing RBS and is further evidence of the determination of the bank’s leadership to put our remaining issues behind us," he said.

“This settlement is a stark reminder of what happened to this bank before the financial crisis, and the heavy price paid for its pursuit of global ambitions.”

BreakingRBS reaches settlement with Federal Housing Finance Agency

Royal Bank of Scotland will pay Federal Housing Finance Agency £4.2bn ($5.5bn) after reaching a settlement in one of the two major U.S. investigations into allegations that it mis-sold mortgage-backed bonds, that it needs to resolve before the government can sell its shares in the bank.

How much money makes you happy?

A question BT can't refuse

Financial Times telecoms correspondent Nic Fildes tweets

BT is holding its annual general meeting on Wednesday and it is the first time it has stood in front of shareholders since the scandal at its Italian operation came to light.

One investor has an interesting question for BT's chairman Sir Michael Rake...

View more on twitter
Barnier: Brexit payment from UK 'not a ransom'
The EU chief negotiator says the UK is being asked for what it has "legally undertaken to provide".

Game, set and match for tennis players

Andy Murray

Wimbledon has once again provided an annual surge of interest in tennis.

And off the court, the sport is also in a healthy state in regards to sponsorship.

Lesley McCormack, daughter of the late founder of sports marketing group IMG Mark McCormack, believes the digital age will give players even more chance to boost their income.

Oil prices trim earlier gains

The oil price pared gains on Wednesday afternoon after Opec revealed higher production data for June.

Brent crude rose 1.4% to $48.18 a barrel.

West Texas Intermediate is up 1.6% at $45.74 a barrel.

New German rules can block foreign takeovers

German robotics maker Kuka was acquired by Midea of China last year
Getty Images
German robotics maker Kuka was acquired by Midea of China last year

Germany will introduce new rules that make it easier to block the sale of strategically important companies to investors from outside the European Union.

Economy Minister Brigitte Zypries said: "We remain one of the most open economies in the world, but we also need to take fair competitive conditions into consideration.

"We owe that to our companies. They often compete with countries whose economies are not as open as ours," she added.

The acquisition of German robotics maker Kuka by China's Midea stoked concerns that China was gaining access to key technologies while shielding its own companies from foreign takeovers.

Eddie returns

It turns out Southern Rail realise they are on to a good (and unaccustomed) thing: positive publicity.

Dozens of people have been tweeting to ask whether work experience lad, Eddie, will be back in the Twitter hotseat again today.

View more on twitter

Who knew getting a social media strategy could be so easy?

Demand for Opec oil to fall

Opec, the cartel of oil producing nations, said that it sees demand in 2018 for its crude below its current output.

Opec also said that its output rose in June by nearly 400,000 barrels a day. The group had agreed to cut production with other countries to help clear a glut in supplies and lift prices.

However, Libya and Nigeria are exempt from the deal and both accounted for the biggest production rises last month.

Opec's leading member Saudi Arabia also reported higher production in June, taking its output above a cap it agreed last year.

$100 oil price was 'an aberration', says BP boss

Bob Dudley

The boss of BP says that the period when oil reached $100 a barrel was "an aberration".

Bob Dudley told the International Business Times UK: "I think we'll all look back in history and think the period of three years [prior to 2014] at $100 per barrel or above was an aberration. It does feel that the market is getting back to a more normal range."

He added: "There's an overused expression in the market these days that oil price is staying 'lower for longer', we hope not lower forever. BP has a $60 break-even at the moment, but not for very long."

Barclays forms new board

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Barclays has announced who will sit on the board of its non-ring fenced bank.

It will separate its consumer-facing retail business from its corporate and investment banking business which will be known as Barclays International in the first half of 2018 . It will also include its international cards and payments businesses.

Sir Gerry Grimstone will be chairman of Barclays International. Tim Throsby will become president and Emily Portney will be appointed as the chief financial officer.

There will also be five non-executive directors.