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Introduction: Markets subdued as investors and business groups remember the Queen
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
The financial markets are subdued on the first day of national mourning following the death of Queen Elizabeth II.
Business groups and City investors are remembering the Queen’s service over seven decades, and her contribution to modern Britain.
Tony Danker, CBI Director-General, spoke for the business world last night when he hailed her leadership and values:
“Throughout her unprecedented 70 years on the throne, HRH Queen Elizabeth II served the nation with distinction as a stalwart example of British values of honour, dignity and resilience. She dedicated her life to the people of the UK and the Commonwealth, providing compassionate and inspirational leadership during the many challenging times of her long reign.
“Times are hard right now – made more so by the loss of our much-loved Queen – and our tribute should be to work tirelessly to build a better future for the people of this country in memory of Her Majesty.”
The New York Stock Exchange and Nasdaq both observed a moment of silence yesterday to honour the queen.
The London Stock Exchance has just opened as usual – unlike in sport, where events such as the third Test between England and South Africa and the PGA championship at Wentworth will be paused for at least a day.,
Under Operation London Bridge (the plan for the coming days) the stock market would shut on the day of Elizabeth II’s funeral.
But while the markets are open, the main indices aren’t expected to be volatile, with investors contemplating the Queen’s remarkable reign, and her work at home and abroad.
Bill Blain, strategist at Shard Capital, says Queen Elizabeth was “instrumental in establishing and strengthening the UK’s soft power” and its position on the world stage.
It has been an extraordinary reign by an extraordinary queen – one of simple but unchallenged majesty. Admired and respected around the globe. Deeply loved at home.
For the next 10 days the UK will be in mourning. Life will go on, but don’t expect business as usual.
King Charles III is due to meet Liz Truss and address the nation:
The agenda
-
Today: EU energy ministers gather for emergency talks in Brussels on Friday discuss measures to counter the energy crisis
-
Noon: OECD publishes its annual Employment Outlook report
-
5pm BST: Russian GDP and inflation report
Key events
Filters BETA
Last night the Bank of England reassured the public that current banknotes featuring the image of the Queen will continue to be legal tender.
Governor Andrew Bailey said:
“It was with profound sadness that I learned of the death of Her Majesty The Queen.
On behalf of everyone at the Bank I would like to pass on my deepest condolences to the Royal Family. For most of us, she is the only head of state we have ever known, and will be remembered as an inspirational figure for our country and the Commonwealth.”
The Bank’s building at Threadneedle Street will fly a flag at half-mast as a mark of respect.
Despite the sombre mood in the City, both the pound and the FTSE 100 index have pushed higher – as anxiety over the global economy and hawkish central banks eases.
Sterling and the euro have gained over a cent against the dollar – whose weakness today has pushed up stocks. One pound now buys $1.164, up from just over $1.14 at its 37-year low on Wednesday.
Mining companies are rallying, helped by the weaker dollar and lower-than-expected inflation data out of China overnight, lifting the FTSE 100 by 120 points or 1.6%.
Traditionally, a strong pound would pull the FTSE 100 lower (as it make exports less competitive and cuts the value of overseas earnings).
But that relationship seems to have changed, with UK assets moving more in sync, as Reuters’ Andy Bruce shows here:
Interesting in investor behaviour towards UK assets in the last few months.
Used to be the case that people that people would use a weak pound to pile into the FTSE. No more.
£ and FTSE now highly correlated – compare with, say, months after the Brexit vote 👇 pic.twitter.com/xg97p3hnpQ
— Andy Bruce (@BruceReuters) September 9, 2022
Similar with gilts – investors used to pounce on a weak pound to snap those up. But last couple of months have seen a positive correlation.
(change in gilt yield here inverted so it represents the price) pic.twitter.com/WGNiInUqF7
— Andy Bruce (@BruceReuters) September 9, 2022
Investor sentiment has soured towards UK assets recently, reflecting a few things including reliance on imported energy and questions over institutional competence.
— Andy Bruce (@BruceReuters) September 9, 2022
Robert Booth
Changing the nation’s coins and bank notes, following the Queen’s death, will be a slow process, as my colleague Robert Booth explains:
There are 4.5bn sterling bank notes in circulation with the Queen’s face on them, worth a combined £80bn. Replacing them with alternatives featuring the head of the new monarch is likely to take at least two years.
When the latest synthetic £50 notes were issued, the process of recall and replacement took the Bank of England 16 months. When the Queen acceded to the throne in 1952, the monarch was not featured on the banknotes.
That changed in 1960 when the face of Elizabeth II began to appear on £1 notes in an image created by the banknote designer Robert Austin, which some criticised as too severe.
An image of the new monarch would be agreed with Buckingham Palace. The Queen’s head also features on some $20 banknotes in Canada, on coins in New Zealand, and on all coins and notes issued by the Eastern Caribbean central bank, as well as other parts of the Commonwealth.
Coin designs may be changed more slowly if historical precedent is followed: it was common to have different monarchs in your wallet as the changeover in coins happened organically rather than through recall.
Britain’s steel-making industry paid tribute last night, with trade body UK Steel saying:
Everyone involved in the UK steel sector will be deeply saddened at the death of Her Majesty the Queen.
We all owe her an immense debt of gratitude for the duty and public service to which she dedicated her life in the UK, the Commonwealth, and around the world. The sector sends its thoughts and prayers to her family.
Everyone involved in the UK steel sector will be deeply saddened at the death of Her Majesty the Queen. We all owe her an immense debt of gratitude for the duty and public service to which she dedicated her life. The sector sends our thoughts and prayers to her Family.
— UK Steel (@UKSteel__) September 8, 2022
Full story: Royal Mail and rail workers cancel strikes after the Queen’s death
Mark Sweney
Strikes by postal and rail workers have been cancelled after the death of Queen Elizabeth II my colleague Mark Sweney writes:
Royal Mail workers were due to stage the second day of a 48-hour strike on Friday in a dispute over pay and conditions. Unions cancelled the action after the Queen, the longest-serving monarch in British history, died peacefully at Balmoral on Thursday afternoon, aged 96.
Dave Ward, the general secretary of the Communication Workers Union, said last night:
“Following the very sad news of the passing of the Queen, and out of respect for her service to the country and her family, the union has decided to call off tomorrow’s planned strike action,”
Here’s the full story:
Selfridges and Liberty among stores to remain closed today
While the stock market is open, some retailers have closed their doors as businesses pay tribute to the Queen.
Liberty London will not reopen its store in the West End of London until Saturday morning, saying:
Our heartfelt sympathy and thoughts are with the Royal Family at this sad time. As a mark of respect Liberty Store will be closed until Saturday 10th September at 10am while we join the country in mourning.
Our heartfelt sympathy and thoughts are with the Royal Family at this sad time. As a mark of respect, Liberty Store will be closed until Saturday 10th September at 10 am while we join the country in mourning. pic.twitter.com/2txIbogmgN
— Liberty London (@LibertyLondon) September 8, 2022
Selfridges’s stores will remain closed today too, after closing early yesterday after the Queen’s death was announced. They will reopen on Saturday 10th September with our usual opening hours.
The department store chain said:
Queen Elizabeth has been a reassuring constant throughout our lives, ascending to the throne on 6 February 1952, making her the longest-reigning monarch in British history.
Over the past 70 years, her Majesty has been dedicated to the service of our country and the Commonwealth, demonstrating an enormous sense of duty and commitment.
The Queen was a regular visitor to the City, giving major speeches at Guildhall, opening new buildings, and visiting its most historic church, St. Paul’s Cathedral.
City AM have written a nice piece about the links between the Palace and the Square Mile. Here’s a flavour:
At one lunch at the Guildhall, marking the 40th anniversary of her accession to the throne, she toasted the Square Mile’s joie de vivre.
“This Great Hall has provided me with some of the most memorable events of my life,” she said.
“The hospitality of the City of London is famous around the world, but nowhere is it more appreciated than among the members of my family,” she said at the lunch which took place just days after the fire at Windsor Castle.
That was the famous Annus horribilis speech, when the Queen remarked:
“1992 is not a year on which I shall look back with undiluted pleasure.”
She also attended the opening of the Swiss Re building – better known as The Gherkin – when it first dominated the City of London skyline.
With the stock market open as usual, the FTSE 100 has risen by almost 1%.
The weakness of the US dollar today is lifting some equities, with mining companies leading the way.
Naeem Aslam, chief market analyst at Avatrade says:
“Investors are digesting the sad news of Queen’s death in the UK and contemplating Federal Reserve Chair Jerome Powell’s most recent statements on inflation.”
It’s been a volatile week in the City, with the announcement of the country’s new Prime Minister and the death of its longest-reigning monarch.
Stocks have been choppy, while government bonds weakened on concerns over the economic outlook, and higher borrowing to fund the energy bill freeze announced ysterday.
The pound is making up some ground against the dollar, recovering from hitting a 37-year low in Wednesday.
Sterling has picked up a cent to $1.16, as the dollar falls back against other currencies.
But as Reuters points out, the pound lost a lot of value over the Queen’s reign:
Elizabeth was crowned in a nation exhausted by victory in World War Two and reigned for 70 years. Sterling is perhaps a mirror on the long decline of empire over that time; pegged at $2.80 in 1952, it touched a 37-year low of $1.1407 this week.
It may yet fall further, as Britain borrows big to pay for energy subsidies economists think might cost £100 billion pounds or more.
Stock market to open as normal today
The London Stock Exchange (LSE) has said markets will open as normal on Friday and will close at normal times today, after the death of Queen Elizabeth
The LSE said it would notify markets of any subsequent changes to operating arrangements via a further notice, adding that it recognised public bank holidays in England and Wales.
Last night, the LSE said:
“We are deeply saddened at the passing of Her Majesty Queen Elizabeth II.
“Our sympathies and condolences are with the royal family.”
It is expected that the funeral of Queen Elizabeth will be a public holiday, and in this scenario the LSE would be closed for trading.
“We are deeply saddened at the passing of Her Majesty Queen Elizabeth II. Our sympathies and condolences are with The Royal Family.” – London Stock Exchange Group pic.twitter.com/XQj6g2UWDv
— LSEG (London Stock Exchange Group) (@LSEGplc) September 8, 2022
Rail and postal unions suspend strikes
Three British trade unions representing postal workers and transport staff are suspending their scheduled strikes following the death of Queen Elizabeth.
Royal Mail members of the Communication Workers Union had planned to take industrial action today over a pay dispute, but the union said it had called off the strike after the passing of the Queen.
The RMT transport union, is suspending strikes planned for September 15th and 17th, saying:
“We express our deepest condolences to her family, friends and the country,”
The TSSA (Transport Salaried Staffs’ Association) said it was cancelling its planned strike action for September and “will be respecting the period of public mourning.”
Introduction: Markets subdued as investors and business groups remember the Queen
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
The financial markets are subdued on the first day of national mourning following the death of Queen Elizabeth II.
Business groups and City investors are remembering the Queen’s service over seven decades, and her contribution to modern Britain.
Tony Danker, CBI Director-General, spoke for the business world last night when he hailed her leadership and values:
“Throughout her unprecedented 70 years on the throne, HRH Queen Elizabeth II served the nation with distinction as a stalwart example of British values of honour, dignity and resilience. She dedicated her life to the people of the UK and the Commonwealth, providing compassionate and inspirational leadership during the many challenging times of her long reign.
“Times are hard right now – made more so by the loss of our much-loved Queen – and our tribute should be to work tirelessly to build a better future for the people of this country in memory of Her Majesty.”
The New York Stock Exchange and Nasdaq both observed a moment of silence yesterday to honour the queen.
The London Stock Exchance has just opened as usual – unlike in sport, where events such as the third Test between England and South Africa and the PGA championship at Wentworth will be paused for at least a day.,
Under Operation London Bridge (the plan for the coming days) the stock market would shut on the day of Elizabeth II’s funeral.
But while the markets are open, the main indices aren’t expected to be volatile, with investors contemplating the Queen’s remarkable reign, and her work at home and abroad.
Bill Blain, strategist at Shard Capital, says Queen Elizabeth was “instrumental in establishing and strengthening the UK’s soft power” and its position on the world stage.
It has been an extraordinary reign by an extraordinary queen – one of simple but unchallenged majesty. Admired and respected around the globe. Deeply loved at home.
For the next 10 days the UK will be in mourning. Life will go on, but don’t expect business as usual.
King Charles III is due to meet Liz Truss and address the nation:
The agenda
-
Today: EU energy ministers gather for emergency talks in Brussels on Friday discuss measures to counter the energy crisis
-
Noon: OECD publishes its annual Employment Outlook report
-
5pm BST: Russian GDP and inflation report
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