Crumbs, what a busy day. Here’s a quick recap of the main events.

The European Central Bank has halved its asset purchase stimulus programme, to €30bn per month, for another nine months. But the ECB also left little doubt that it intends to keep buying bonds for even longer than announced today, in an attempt to get inflation.

The euro has fallen following the announcement.

In the UK, a gloomy retail report has raised new fears over the strength of the recovery. The CBI reported that retail sales were falling at the fastest pace since 2009 this month.

Economists say the survey shows that consumers are being forced to cut back, due to rising inflation and economic uncertainty.

Britain’s car industry is also struggling. Production fell by 4% in September, mainly due to a sharp decline in domestic demand.

Barclays is having its worst day since the day after the EU referendum. Shares are down by 7.5% today, after it reported a decline in earnings at its investment banking arm.

And Britain’s pay gap has also narrowed, to 9.1%. But it’s not shrinking fast enough, with experts warning it will take ‘decades’ to eliminate at the current rate...

That’s probably all for today. Thanks for reading and commenting. GW

Ian Stewart, chief economist at Deloitte, has a good take on Mario Draghi’s comments:

“This is softly, softly tapering. William McChesney Martin, a previous Fed Chairman, once said that the job of the Fed was ‘to take away the punchbowl just as the party gets going.’

The ECB certainly isn’t taking away the punchbowl, Mr Draghi is saying that so long everyone keeps having a good time they plan to put less punch in.”

Nancy Curtin, Chief Investment Officer at Close Brothers Asset Management, says:

“Ten years on from the financial crash, the era of quantitative easing is yet to run its course in Europe. Draghi confirmed that the bond buying programme would be tapered, but it has hardly come to an end.

This slow, steady and widely predicted approach hopes to rein in the Euro from rising further, which is limiting the earnings capacity of European exporters, at the same time as avoiding a European taper tantrum in the markets. Whether one can be achieved without the other remains to be seen.

Paul Rayner, Head of Government Bonds at Royal London Asset Management, agrees that the European Central Bank’s QE programme will continue for some time:

In our view, the tightening of European monetary policy will continue be a very gradual process, with further comments made today that there are no plans for a cliff-edge end to the bond purchase programme.

As Mario Draghi himself put it during today’s press conference, the reinvestment of principal payments will be ‘massive’, and it’s worth remembering that despite the squeeze on liquidity entering the markets, the ECB will still be buying €30 billion per month.

Viktor Nossek, Director of Research at asset management firm WisdomTree, predicts that bond prices could suffer from the ECB’s decision:

“Investors in Europe should consider hedging their fixed income exposures, now that the ECB is cutting back asset purchases from the start of 2018.

“German bunds could now be in the firing line, as the cut back could spark a taper tantrum in Europe.

Mario Draghi has done a good job of talking down the euro too.

The single currency has now shed one cent against the US dollar to $1.172, a three-week low.

Traders have clearly got the message that the ECB’s bond-buying programme remains ‘open-ended’, and that it has not intention of raising interest rates any time soon.

That was a pretty dovish performance from Mario Draghi. An effective performance too, as the ECB president makes it clear that he expects maintain loose monetary policy for some time, despite the economic recovery.

Here are the key points:

1) The European Central Bank has halved the pace of its bond-buying asset purchase programme. From January, it will only buy €30bn of government and corporate bonds each month, down from €60bn, for at least the next nine months.

2) But..... this doesn’t mean that the ECB’s QE programme is on borrowed time. President Draghi has insisted that today’s decision is not ‘tapering’, meaning the Bank expects to keep buying bonds beyond September 2018.

This was perhaps the key quote:

The decision today is for an open-ended programme ... it’s not going to stop suddenly. The large majority of the Governing Council expresses a preference for keeping it open-ended.

There is still a large amount of uncertainty, so it was only prudent.

So while the ECB has taken a step towards ending its ultra-loose monetary stance, we’re not there yet....

3) Draghi was upbeat about the recovery in the eurozone recovery, pointing out (twice) that seven million jobs have been created in the last four years.

He declared that:

“The latest data and survey results point to unabated growth momentum in the second half of this year.”

Today’s governing council was held in a positive atmosphere, he added.

All the members mentioned growth momentum, improving employment ...investment is actually picking up. The earning capacity of households is picking up, so disposable income is increasing.

4) But the ECB still sees ‘muted’ inflation pressures. That’s why it intends to keep pumping euros into the economy through its asset purchase scheme.

“Domestic price pressures are still muted overall and theeconomic outlook and the path of inflation remain conditional oncontinued support from monetary policy. Therefore, an ampledegree of monetary stimulus remains necessary.”

5) On geopolitics, Draghi said the ECB was watching developments in Catalonia very closely.

“It is very difficult to comment on developments that change every day. We are following what is happening ... to conclude now that there will be instability is premature.”

Q: Is political uncertainty in Catalonia a risk to financial stability in Spain, and in the euro area at a whole?

Mario Draghi says the ECB is following developments with “great attention”, but it is “very difficult to comment on developments that change every day”.

To conclude now that there will be financial stability risks would be premature. We have to see what will happen....

Q: Was today’s decision unanimous?

No, there were different viewpoints, Draghi replies.

He says there was a “broad consensus on several issues, and a large majority on other issues.”

Onto questions.

Q: Did the ECB discuss changing the composition of the assets bought under your stimulus programme?

No, Draghi replies. But the press get more details later today on how the asset purchase programme will evolve, and re-invest its assets (as bonds mature)

Mario Draghi begins by telling reporters that his governing council conducted a “thorough” analysis of the outlook for inflation in the eurozone today.

Draghi confirms that the ECB decided to leave interest rates at their current record low, and expects to leave borrowing costs at these levels for an extended period.

He also confirms that the ECB will maintain its QE programme for another nine months, at a pace of €30bn per month, “or beyond if necessary”.

The ECB stands ready to increase the asset purchase programme in terms of size and or duration if needed, he adds.

Speaking particularly crisply, Draghi concludes:

Today’s monetary policy decisions were taken to preserve the very favourable financing conditions that are still needed for a sustained return of inflation to levels that are close to, but below 2%.

Over in Frankfurt, ECB president Mario Draghi is explaining today’s decisions to the press pack.

You can watch it live here:

My colleague Richard Partington tweets:

Danske Bank have helpfully summarised today’s ECB statement:

BREAKING: The European Central Bank has slowed the pace of its stimulus programme.

From January 2018, the ECB will buy €30bn of new bonds each month -- that’s down from €60bn per month at present.

The ECB’s governing council has decided to continue this quantitative easing programme for at least another nine months - or longer if needed.

That means the ECB has taken another step towards ending the era of ultra-loose monetary policy.

The ECB says:

From January 2018 the net asset purchases are intended to continue at a monthly pace of €30 billion until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.

If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the APP [Asset Purchase Programme] in terms of size and/or duration.

The ECB has also left borrowing costs unchanged.

That means the headline eurozone interest rate remains at 0.0%, and banks face a negative interest rate of -0.4% for leaving money in the central bank’s vaults.

Details and reaction to follow!

If you’re just tuning in, here’s our news story on the retail sales figures:

The fastest monthly fall in high street sales since the height of the recession in 2009 has raised fears for the retail sector ahead of the crucial Christmas trading period.

A survey by the the CBI found that 50% of retailers suffered declining sales in September while only 15% benefited from an increase, leaving a rounded balance of -36%, the lowest since March 2009.

The business lobby group said the survey showed retailers were “feeling the pinch” from rising inflation, which has eaten into consumer incomes and squeezed profit margins.

Rain Newton-Smith, the CBI chief economist, said: “While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.”

The gloomy CBI survey came as Debenhams warned of an “uncertain” environment on the high street in the run up to Christmas after suffering a 44% dive in profits.

The department store confirmed the closure of two stores, in Eltham, south London, and at Farnborough, Hampshire, affecting about 80 jobs, as sales on the high street continue to fall. They are the first of up to 10 UK branches that Debenhams has earmarked for closure....

More here:

BREAKING: UK retail sales have suffered their sharpest monthly decline since the financial crisis.

That’s according to the CBI’s monthly survey of the UK retail sector.

It found that just 15% of retailers reported that sales volumes were up in October on a year ago, whilst 50% said they were down. That gives a rounded balance of -36%, the worst reading since March 2009 - when Britain had fallen into recession after the financial crisis.

Firms reported that sales were below average for the time of year. Suppliers have also been hit -- with orders dropping at the fastest rate since March 2009.

Here are the key findings from the report:

• 15% of retailers said that sales volumes were up in October on a year ago, whilst 50% said they were down, giving a rounded balance of -36%. This significantly undershot expectations (+23%), and was the steepest fall in sales volumes since March 2009 (-44%), during the financial crisis
• 14% of respondents expect sales volumes to increase next month, with 12% expecting a decrease, giving a rounded balance of +3%
• 14% of retailers placed more orders with suppliers than they did a year ago, whilst 57% placed fewer orders, giving a balance of -43%. This was the fastest decline since March 2009 (-47%)

Rain Newton-Smith, CBI Chief Economist, blames the cost of living squeeze, due to the slump in the pound since the Brexit vote.

“It’s clear retailers are beginning to really feel the pinch from higher inflation.

While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.

The survey only covers 106 firms, including 49 retailers, so it needs treating with some caution. But such a sharp decline is certainly worth noting...

Deep cuts in inward migration from other EU countries after Brexit would seriously hit Scotland’s economy, the Scottish government has warned, after new projections showed it would lead to a fall in the country’s working age population.

New data from the National Records of Scotland published on Thursday shows all future population growth depends on continued inward migration from the rest of the UK and overseas, because birthrates are projected to fall while numbers of pensionable adults to increase by 25% by 2041.

Based on existing trends, the NRS, a government agency that monitors population figures, said Scotland’s population will rise from 5.40 million in 2016 to 5.58 million in 2026 – an increase entirely due to net inwards migration. By 2041, Scotland will have 1.32m pensioners, it said, but the number of working Scots would rise by just 1%.

In a separate paper, the NRS also modelled the impact of a 50% cut in EU inwards migration, and said that would cut a population rise to 4%, while an end to EU migration would see Scotland’s population peak in 2032 and decline afterwards. Under that scenario, Scotland’s wage-earning population would fall by 3%.

The NRS made clear these figures were illustrative and not official data (a distinction the Scottish government’s press release did not highlight) but Fiona Hyslop, the Scottish culture and external affairs secretary, said they underlined “the critical importance of maintaining inward migration to Scotland.”

Hyslop said:

“The stark reality outlined in today’s figures is that projected growth in Scotland’s population will slow significantly if levels of EU migration are reduced. And in that scenario the population is also predicted to start declining again within the next 25 years.

“That would have a significant negative impact on Scotland’s economy and our ability to fund the public services we will need for an ageing population.”

Good news! Britain’s gender pay gap has hit its lowest level in at least two decades.

Bad news! Women are still being paid over 9% less than men.

That’s according to the latest Annual Survey of Hours and Earnings from the Office for National Statistics.

It found that the gender pay gap for full-time staff dropped to 9.1% in the year to April, down from 9.4%. That’s the lowest level since the survey began in 1997, as this chart shows:

It’s illegal to pay a woman less than a man for doing the same job. But still, the gender pay gap persists. The ONS says there are several reasons, including:

• more women work in lower-paid jobs or sectors
• women are more likely to work part-time, which can mean a lower rate of pay
• women are under-represented in senior roles -this may be due to attitudes about gender roles, lack of flexible working or women taking time to look after their family

It also varies widely between different industries and jobs. Assemblers and metal workers see the biggest pay gap, and there’s also a sharp difference for senior roles like financial managers, directors, and CEOs.

Brexit is a particular worry to the UK auto industry because components typically cross the channel several times before a car finally rolls off the production line.

The Financial Times did a good piece on this last year, pointing out that the bumper for a new Bentley could be made in Europe, checked in Crewe, painted in Germany, and then assembled in Britain.

A fuel injector built by US component maker Delphi, used in diesel lorries, takes a similarly long trip....

The FT’s Peter Campbell explained:

This part uses steel from Europe which is machined in the UK before going to Germany for special heat treatment. The injector is then assembled at Delphi’s UK plant in Stonehouse, Gloucestershire, before being sold on to truckmakers based in Sweden, France or Germany.

If the resulting truck is sold into the UK market, the component or materials used in it will have crossed the Channel five times before the lorry is ever driven by the customer. If tariffs are applied at each stage, the cost could be substantial.

The storm clouds gathering over Britain’s car industry have darkened this morning, after manufacturers suffered a sharp fall in production.

Output shrank by 4.1% in September, new figures from the motor industry show.

Alarmingly, domestic demand tumbled by 14.2%, while there was also a 1.1% decline in production for exports.

In total, 6,500 fewer cars were produced last month than in September 2016. That has helped to drag production during 2017 down by 2.2%:

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, says the industry is suffering from falling confidence - and a government clampdown on diesel cars.

Hawes says the industry’s big fear is that Britain leaves the EU without a deal, which would disrupt the car industry’s ability to buy and sell cars and components across the channel.

“With UK car manufacturing falling for a fifth month this year, it’s clear that declining consumer and business confidence is affecting domestic demand and hence production volumes. Uncertainty regarding the national air quality plans also didn’t help the domestic market for diesel cars, despite the fact that these new vehicles will face no extra charges or restrictions across theUK.

Brexit is the greatest challenge of our times and yet we still don’t have any clarity on what our future relationship with our biggest trading partner will look like, nor detail of the transitional deal being sought. Leaving the EU with no deal would be the worst outcome for our sector so we urge government to deliver on its commitments and safeguard the competitiveness of the industry.”

These disappointing figures come a day after Japanese manufacturer Toyota urged the government to raise the ‘fog’ of Brexit uncertainty.

City analyst Simon French of Panmure Gordon points out that car production has gone into reverse in other countries too......

Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.

All eyes will be on the European Central Bank today, as the eurozone’s top central bankers meet to set monetary policy. And it could be a red letter day, with the ECB likely to turn down the gas on its money-printing programme.

With Europe’s economy firing on all cylinders, the ECB is likely to decide to cut the pace of its bond-buying stimulus scheme, which is currently creating €60bn of new money each month.

But, inflation is still below target, so the ECB won’t feel under pressure to slam the brakes. Instead, it will probably cut the pace of quantitative easing...but by how much?

No-one’s really sure, so prepare for drama when ECB chief Mario Draghi reveals how he plans to slow, or ‘taper’, the stimulus plan.

Financial group PNC predicts that the ECB will lop €15bn off its QE programme, and keep buying government and corporate bonds until next autumn.

They say:

We expect a reduction in monthly asset purchases to perhaps €45 billion euros in January from the current €60 billion. The ECB will probably refrain from a firm commitment to an end-date for its program at tomorrow’s decision; we expect purchases to continue until at least the third quarter of 2018.

Draghi’s challenge is to avoid alarming the markets, sparking a crash in bond prices or a surge in the euro.

Capital Economics say he must strike a delicate balance:

Following the numerous signals from President Draghi and colleagues over recent months, the market is well primed for some form of taper announcement. But there is still a delicate balance to strike.

Taper too quickly and the markets might worry that the ECB’s historically hawkish instincts – typified by the premature (and subsequently reversed) interest rate hikes of 2011 – may be resurfacing. One obvious consequence could be an undesirable rise in the euro. But too tentative a move could fuel concerns that the ECB has little confidence in the economic outlook and the effectiveness of its previous policy measures.

European stock markets are expected to rise a little, while traders wait for the ECB’s announcement at lunchtime.

Also today.... Barclays Bank and high street retailer Debenhams are reporting results this morning. We also get a new survey of retail spending from the CBI.

The agenda:

• 11am BST: CBI’s survey of retail sales in October
  
• 12.45pm BST: ECB interest rate decision
  
• 1.30pm BST: ECB president Mario Draghi’s press conference
  
• 1.30pm BST: US trade figures for September