Economy grew more slowly than expected before omicron hit

Good morning. 

We kick off with some rather grim data on the health of the UK economy.

The ONS has revised down its figures for third-quarter GDP growth from 1.3pc to 1.1pc. That’s a sharp slowdown from the 5.4pc growth registered as the country reopened in the second quarter.

It suggests the recovery was struggling even before the omicron variant hit, and investors will be pessimistic about the prospect for fourth-quarter growth.

The only saving grace is that the economy is now only 1.5pc smaller than its pre-Covid levels in the fourth quarter of 2019, rather than a previous estimate of 2.1pc smaller. That’s thanks to some upward revisions to growth in 2020.

5 things to start your day 

1) Ministers stand up to Sage doomsters as economic fears mount  No models about the impact of a new lockdown have been shown to the Cabinet, running the risk of more unbalanced decision-making

2) Gas prices surge to new records as fears of winter crisis deepen  Low storage levels across Europe, reduced output from renewable sources and delays to Nord Stream 2 pipeline are all contributing factors

3) Airbus and Boeing call for 5G delay over aircraft safety fears  World’s two largest plane makers ask Biden administration to support delaying the rollout of high-speed networks in the US

4) Europe’s pandemic recovery fund unravels as billions go to old projects  The bulk of grants allocated under the bloc’s stimulus scheme are funding investments already on the drawing board

5) Bitcoin will replace the US dollar, says Jack Dorsey  The Twitter founder, who recently resigned as its chief executive, made the prediction in a series of controversial exchanges online

What happened overnight 

Most Asian markets rose on Wednesday, extending a global rally as investors assess the impact of the fast-spreading omicron variant.

Traders are also keeping an eye on developments in Washington after President Joe Biden reassured investors by calling for vaccinations and testing but no travel curbs in response to omicron.

Tokyo, Hong Kong, Shanghai, Singapore, Seoul, Taipei, Manila and Jakarta rose but Sydney and Wellington slipped.

Both the Nikkei 225 in Tokyo and the Shanghai Composite Index recorded a 0.1 percent rise, to 28,548.80 and 3,629.47 respectively, while the Hang Seng in Hong Kong was up 0.7pc to 23,143.11

Coming up today

  • Corporate: Heineken, Winnebago (Interim results); Revolution Bars (AGM)
  • Economics: GDP (UK, US), Chicago Fed National Activity Index (US), personal consumption expenditures (US), consumer confidence (US)

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