Friday Update

DB Live: Bailey upbeat on stimulus; Japan PM resigns

4.30pm: Bailey upbeat on stimulus

Bank of England

The Bank of England has a number of ways to support the UK economy if recovery from the coronavirus pandemic proves be sluggish, according to the Bank of England governor Andrew Bailey.

“We are not out of firepower by any means,” Mr Bailey said in a speech to the Federal Reserve Bank of Kansas City’s annual Jackson Hole economic symposium which is being held online this year because of the pandemic.

1pm: FM’s briefing

First Minister Nicola Sturgeon today said she would take exception to any employer who “intimidates” people into returning to workplaces.

Full story here

9am: Abe unsettles markets

Markets were unsettled by the news that Japan’s premier Shinzo Abe is resigning due to ill health (see below).

There was also some hesitation ahead of Bank of England governor Andrew Bailey’s comments to the Jackson Hole symposium.

The FTSE 100 was marginally lower at 5,993.55 (down 6.44 points), while the pound was up by 0.65% at 1.33 against the US dollar.

6am: Japan PM to resign, says sources

Japanese Prime Minister Shinzo Abe is to resign his post as the nation’s longest serving premier due to his worsening health, according to the Reuters news agency.

A statement was expected at 8am (GMT).

The news sparked a slide in Tokyo stock prices and a rise in the yen. Japan’s Nikkei fell as much as 2% before recouping some losses.

Mr Abe has suffered from ulcerative colitis for years and recent hospital visits raised questions on whether he could stay in the job.

Markets and Jackson Hole

While London’s FTSE 100 drifted lower (down 46 at 6000 points) following Federal Reserve chairman Jerome Powell’s speech at Jackson Hole the Dow Jones rose 160 points and the S&P climbed 6 points.

Mr Powell said the Fed had formally agreed to a policy of “average inflation targeting”, meaning the central bank would let inflation run “moderately” above its 2% goal for “some time” despite attempting to cap it at that level for several years.

He also acknowledged the importance of a strong labour market, stating it would ensure that US employment doesn’t fall below its maximum level.

Today’s Agenda

* Shadow Chancellor Anneliese Dodds visits Edinburgh and is calling for a continuation of the UK government’s furlough scheme, saying it should be targeted

* BoE governor Andrew Bailey speaks to the Jackson Hole symposium

* Police get powers to break up house parties of more than 15 people

Today’s top Daily Business headlines

Factory bosses call for UK compromise on Brexit

Call for nuclear pledge as Hunterston to close early

Homes get nod over plan for hospitality ‘destination’ at Glasgow office block

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