China grows at one of lowest rates on record; Thames Water has funds to survive to year end – business live

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China grew 4.3% in the quarter to 30 June, one of the slowest rates on record, as sluggish domestic demand outweighed a surge in exports.

Growth slowed from the first quarter rate of 5%, and was the lowest in three and a half years. It was less than economists had forecast, and below Beijing’s 4.5% to 5% target range.

Thames Water said this morning that it has enough funding to survive until the end of this year. It continues to work with creditors, regulators and the government on a rescue recapitalisation plan, the only option for it to avoid temporary nationalisation.

It has £515m of cash in the bank, according to its annual report.

The company, which serves 16 million customers in London and southern England, has become a symbol of failure in Britain’s privatised water sector, polluting rivers and the sea with sewage due to ageing infrastructure, and struggling under a massive debt pile. It said its debts grew by £1.7m from last year, to £18.5bn.

Andy Burnham, who is expected to become the UK’s new prime minister on Monday, has said he believes public ownership is the best option for Thames Water. The government was already looking at taking Thames Water into its Special Administration Regime, a form of temporary public ownership.

However, Thames said its performance is improving. Sewage pollution fell 18% in the 12 months to the end of March, and its underlying profit after tax jumped to £203.9m, from £12.6m last year.

Chief executive Chris Weston said:

While operationally the business is improving, we are also working with our creditors, regulators and government to complete our recapitalisation.

In financial markets, oil prices have increased modestly, after the US ditched a plan to charge a 20% on cargo transiting through the strait of Hormuz. But Donald Trump ratcheted up the rhetoric, threatening to expand US strikes on Iran next week to target power plants and bridges if Tehran does not agree to a deal.

Brent crude rose 0.7% to $85.3 a barrel, after climbing above $86 a barrel on Tuesday amid escalating tensions in the Middle East.

Asian stock markets mostly rose and government bonds steadied, after a bigger-than-expected cooling in US inflation on Tuesday prompted markets to scale back expectations for interest rate hikes.

Japan’s Nikkei rose 1.5% and Hong Kong’s Hang Seng climbed 1.4%, while South Korea’s Kospi, which took a hammering earlier in the week, bounced back 6.2%.

Bond yields and the dollar fell amid relief over the inflation reading. The pound rose 0.45% against the dollar and the euro was above $1.14 while two-year Treasury bonds (which are particularly sensitive to rate expectations) fell 9 basis points to 4.2% from Tuesday’s 17-month high of nearly 4.3%.

However, US Federal Reserve chair Kevin Warsh told Congress on Tuesday that one data point was not enough to declare victory over inflation.

Also contributing to optimism, Netherlands-based ASML, Europe’s most valuable company and the world’s biggest supplier of chip-making equipment, beat revenue forecasts.

The Agenda

10am BST: Eurozone industrial production for May

1.30pm BST: US producer prices for June

2.45pm BST: Bank of Canada interest rate decision

3pm BST: US Federal Reserve chair Kevin Warsh Congress testimony

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