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Morning Edition

Markets: The oil market has paused for breath following the recent rally, which has seen Brent crude rise 20 per cent since the start of the month. Overnight the price slipped and at 7.02am Brent crude was trading at $50.08 a barrel.

Against the dollar the pound was trading at $1.304 and at €1.156 against the euro. The Nikkei closed up 0.32 per cent this morning at 16,598.19. IG is calling the FTSE 100, which closed at 6,858.95 last week, to open 15 points lower. For more coverage see the market snap below and don't forget to follow me on Twitter for regular market updates throughout the day - @fletcherr.

Good morning: House prices are expected to fall across the UK next year as years of robust growth end and uncertainty over Brexit saps demand for property, according to a survey published overnight by Countrywide.

The owner of Hamptons International and Bairstow Eves said that it expects house prices to grow 2.5 per cent this year before falling 1 per cent next year. This compares to house price rises of 8.5 per cent in 2014 and 6.5 per cent last year.

“The driver is what happens to the economy,” Fionnuala Earley, chief economist at Countrywide, said. “We think the economy is going to suffer and although we expect the availability of finance to be there, the question is whether the demand will still be there given the uncertainty about future jobs and where the economy is going.”

Tom Knowles, our Economic Correspondent, has a full report here.

On the corporate front we have got half-year results this morning from Wireless Group, the radio business currently the subject of a takeover bid from The Times owner News Corp. “Wireless Group - and especially talkSPORT - has performed well in the first six months of the year,” says Richard Huntingford, Wireless Group’s chairman.

We have also got interim results from Kingspan, the Irish building materials group.

Please do keep sending me any thoughts or observations about The Times business coverage - richard.fletcher@thetimes.co.uk. Have a great day.

Richard Fletcher
Business Editor
The Times

The week ahead
Read full update

Monday
Interims Wireless Group

Tuesday
Four Seasons, Britain’s biggest care homes group, is expected to report disappointing figures as the company risks falling into the hands of its creditors. The group, owned by Guy Hands’s Terra Firma, said in April that it did not have enough money to meet its long-term needs, adding that it was exploring its options. It is understood that a number of hedge funds have increased efforts over the past month to buy into the company’s £525 million debt pile in anticipation of a debt-for-equity swap.
Interims Hostelworld Group, Hansteen Holdings, Persimmon, Cape, Four Seasons Health Care Finals Rank Group Economics UK: CBI industrial trends (August)

Wednesday
WPP, the advertising and marketing giant headed by Sir Martin Sorrell, made a series of warnings over the impact of Brexit on the economy and advertising demand before the vote and said in June that UK trading had slowed in the run-up. Analysts expect WPP’s global operations to help the group to weather the storm, predicting a currency boost from the pound’s plunge.
Interims WPP, Sportech, Paddy Power Betfair, Hikma Pharmaceuticals, Headlam, Costain, Carillion, Glencore, Candover Investments Finals Xaar AGM/EGM James Latham Trading statement WH Smith Economics UK: BBA loans for house purchase (July)

Thursday
CRH, the world’s second-largest building materials business, is to publish its half-year results. The company generated revenues of €23 billion last year, as well as completing the €4.5 billion acquisition of assets from Lafarge and Holcim and the $1.3 billion acquisition of CR Laurence.
Interims Spire Healthcare, STV Group, Anglo Pacific Group, Henry Boot, CRH, John Laing, IFG, Cairn Homes, Playtech, Phoenix Group Holdings, Camellia, PV Crystalox Solar AGM/EGM The Fulham Shore, Stagecoach Economics UK: CBI quarterly distributive trades survey

Friday
The Office for National Statistics publishes the second estimate figures for UK economic growth in the second quarter after last month’s preliminary estimate showed that GDP had increased by 0.6 per cent compared with the first quarter. Final figures are due next month.
Interims Computacenter, Lavendon Group, Marshalls, The Restaurant Group Economics UK: GDP (Q2, second release); UK: index of services (June); US: GDP (Q2, second release)

Editor's picks

“One way or another, though, China’s economy is bound to decelerate. Private investment and exports are weak while activity levels in the residential housing market have started to soften again.” Credit stimulus doesn’t really work for long and the greater the reliance on it, the more abrupt and damaging the financial consequences will be, argues George Magnus.

“The expansion of the Panama Canal will open up new and hitherto underdeveloped trade routes. Among the most valuable of these is likely to be the growing trade in US shale gas to China and other energy-hungry economies in the Far East.” The tide is turning against the Middle East as enlarged Panama Canal takes bigger ships, says Robin Pagnamenta.

Market snap

In London, the FTSE 100 finished Friday on a dour note - down 0.2 per cent, or 10 points, to close at 6,858.95 - on its way to the worst weekly drop since mid-June and 0.8 per cent lower for the week. The broader FTSE 250 at least managed a positive finish with a three-point gain, flat in percentage terms, to 17,874.10.

On Wall Street, shares drifted lower in a thinly traded end-of-week session. The Dow Jones Industrial Average shed 0.2 per cent, or 45.13 points, to close at 18,552.57, leaving the index 0.1 per cent down over the week. The S&P 500 slid 0.1 per cent, or 3.2 points, to 2,183.87, which left it flat for the week as a whole. Around 5.7 billion shares changed hands compared with the recent daily average of 6.4 billion.

Sterling fell by 0.7 per cent against the dollar in London on Friday to $1.307 but that is still its best weekly performance in a month as robust economic data drove currency traders to trim their record high bets against the pound. Against the euro, the pound was 0.4 per cent lower at €1.154.

Oil prices eased on Friday but still held at over $50 a barrel, buoyed by the hope that the world’s biggest producers will agree output limits at an informal meeting in Algeria next month. In New York, Brent crude for October settlement was 0.1 per cent lower at $50.83 - a level which is 8 per cent higher than the start of the week.

The day's front pages
The Times

One of the most prominent figures in the City has taken the unprecedented step of permanently abolishing all staff bonuses at his firm.

Neil Woodford, the star stock-picker and founder of Woodford Investment Management, has rejected the conventional wisdom that bonuses are essential to motivate and retain staff and has put everyone on a flat salary.

The new pay scheme was quietly introduced on April 1 for the firm's 35 staff, who include sales people, traders, fund managers and analysts as well as IT, marketing and compliance professionals. Salaries were increased this year so that on average no one would be worse off than they were the year before when they were paid a salary plus bonus. The change was said to be cost-neutral.

The radical shift in policy is unheard of in the City, where discretionary bonuses have traditionally been seen as necessary to drive performance. Mr Woodford and his co-founder and chief executive, Craig Newman, believe that bonuses can distort behaviour, encouraging misconduct, recklessness and short-termism.

Read full update
 
The Wall Street Journal

Turkey’s president blamed Islamic State for turning a youth into a human bomb at a crowded outdoor wedding party in southeast Turkey’s largest city, killing at least 51 people in a weekend attack that underscored how the war in neighboring Syria is destabilizing the region.

The bombing in Gaziantep targeted a largely Kurdish neighborhood and turned a celebratory summer evening into a scene of anguish and mourning, as the couple recovered on Sunday from injuries sustained in the massive Saturday blast and investigators worked to identify the charred body parts of guests and family members.

Dozens of funerals took place on Sunday, including ceremonies for 29 children who forensics teams had managed to identify. Nearly 100 people, including many women and children, were wounded in the attack.

Read full update
 
The Daily Telegraph

Tata's giant Port Talbot steel plant has clawed itself back into profit as staff strain to boost efficiency despite having no idea whether their jobs are safe. Sources familiar with finances at the sprawling operation in South Wales revealed it made a £5m profit in June, reversing the £1m a day loss it was making six months ago.

Tata Steel UK - which includes the speciality and pipe businesses that are up for sale - also made a profit at the group level.

The news has caused frustration among the 11,000 staff, whose future has been in doubt since the company's Indian parent put the UK business up for sale in March, as it buckled under the pressure of cheap imports, global overcapacity, high energy costs and punitive taxes.

The sale of Port Talbot was suspended in July because of uncertainty caused by the Brexit vote, leaving staff no clearer as to what their future held. Tata later said it still planed to sell the speciality and pipe businesses, and was exploring a tie-up with European rival Thyssenkrupp for what remained.

Read full update
 
Financial Times

Infrastructure spending in Britain has declined sharply since the vote to leave the EU, putting pressure on prime minister Theresa May to press ahead with pledges for new road, rail, energy, broadband and flood defence projects.

The value of contracts for July dropped to £1.5bn, a fall of 20 per cent against the previous month and 23 per cent lower than a year ago, according to Barbour ABI, the construction consultancy that supplies figures to the Office for National Statistics.

Michael Dall, chief economist at Barbour ABI, said the public and private sectors were putting projects on hold as a result of uncertainty surrounding Britain's decision to withdraw from the EU.

The prime minister has already put infrastructure at the heart of plans to rebuild the economy following the vote, pledging Treasury backing for new projects and the launch of infrastructure bonds. Last week she promised support for former chancellor George Osborne's "Northern Powerhouse" project, backing proposals for a new trans-Pennine road tunnel linking Manchester and Sheffield.

Read full update