The pound is staging a late mini-rally, as traders cling onto hopes of a Brexit breakthrough over the weekend.
Government ministers have been holding fresh talks with Northern Ireland’s DUP party, whose support could be vital to getting Theresa May’s Brexit deal over the line.
But what cost could it come at? They’ve already secured £1bn in extra funding for Northern Ireland in 2017, after May lost her majority.
Of course, they’ll also need reassurance that the Irish backstop couldn’t create a border between Northern Ireland and the rest of the UK.
Optimism that a no-deal might yet be avoided has pushed pound up half a cent to almost $1.33.
The further decline in manufacturing output in February confirms that the global industrial slowdown is now weighing more heavily on US producers.
With tighter fiscal and monetary policy constraining domestic demand, the weaker external environment is another reason to expect a sustained slowdown in economic growth this year.
Pantheon Macroeconomics’s Ian Shepherdson also sees trouble ahead:
Ouch. America’s factory sector has shrunk for the second month running, adding to fears that the US economy is slowing.
US manufacturing activity dropped by 0.4% in February, new figures from the Federal Reserve show, driven by falling output of motor vehicles, machinery and furniture.
Economists had expected a small rise. This follows a 0.5% decline in January, and may be a sign that the US-China trade war is eating into demand.
Simon Underwood, business recovery partner at accountancy firm Menzies LLP, reckons Interserve’s collapse won’t cause as much disruption as the Carillion crisis 14 months ago.
Like Carillion, Interserve has limited capital and slim operating margins, therefore opting for compulsory insolvency may become the most suitable approach.
“The fact that a large proportion of Interserve’s public sector contracts are in non-critical areas, such as building maintenance, means its failure is unlikely to cause chaos on the same scale as Carillion. On the other hand, with a number of important infrastructure projects, such as the M5 Junction 6 improvement works, resting on Interserve’s continued trading, the Government may well need to intervene.
He’s also got advice for companies owed money by Interserve:
“With suppliers vying to get their contracts resolved with administrators, it is essential that they seek third-party advice at the earliest possible opportunity and ensure cash-flow protection is at the top of their agenda. As well as attempting to renegotiate payment terms with their own suppliers, entering into ‘Time to Pay’ arrangements with HMRC may help them to ease the cash-flow burden and minimise operational disruption.
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