And finally, European stock markets have ended the day with solid gains.

The FTSE 100 has closed 49 points higher at 7187, its highest close since mid-August.

Broadcaster ITV was the top riser at the close, up 2.5%, along with luxury goods maker Burberry (+2.3%), alternative asset manager Intermediate Capital (+2%), credit report firm Experian (+2%) and pest control company Rentokil (+2%).

The Europe-wide Stoxx 600 also had a good day, up around 0.7% at the close.

And European technology stocks hit a 20-year high, Reuters reports.

🔺 EUROPEAN TECHNOLOGY STOCKS <.SX8P> UP 1.6%, HIT 20-YEAR HIGH

— Cable FX Macro (@cablefxmacro) September 6, 2021

Danni Hewson, AJ Bell financial analyst, sums up the day::

“With US markets closed for Labour Day London’s new term has started in an upbeat if steady manner with all indices getting a big green tick. Despite Wall Street’s silence there’s been quite a bit for UK investors to get their teeth into. On the travel front Ryanair’s fired a shot across Boeing’s bow by ditching plans to add the Max10 to its stable because it said the price wasn’t right. The budget airline’s colourful Chief Exec poured a little salt into the wound with canny comments about other airlines plumping for Airbus in recent weeks. Ten months of talks couldn’t secure a deal and leaving the field whilst complimenting a rival’s colours might be seen by some as an interesting tactic ahead of the next round.

“The start of the new term has given investors a chance to assess what the next few months will look like if Delta doesn’t force any restriction U-turns. Figures released by TfL today certainly seem to suggest that hybrid rather than remote working will dominate over the next months. This morning’s commute was the busiest since the pandemic began but one Monday in September doesn’t tell the full story and a quick look across the share prices for Real Estate Investment Trusts and the retail and hospitality sectors shows a mixed bag of performance. Waste management business Biffa’s been the day’s big winner as those still out of office last Friday catch up on the news that the acquisition of Viridor has been signed off a deal which further strengthens the businesses growth potential.

Journeys on the London Underground are the highest level since the first coronavirus Lockdown.

TFL says this morning 831,000 people were registered entering the tube network - the highest level since March 2020.

This is still half the passengers travelling pre-pandemic.

— Sam Francis (@DavidSamFrancis) September 6, 2021

“But once again the big economic picture is being framed by labour shortages and supply chain snarl ups which have dented car sales and slowed the pace of construction.

No industry seems immune to the current challenges which look set to eat away at all that lovely recovery momentum which had been hoped would propel the UK through the long winter months. Furlough might be in its final days, but the schemes end seems unlikely to solve this particular riddle. And there are many riddles for the Treasury to try and unravel, how to pay for social care one of the trickiest. Businesses coming back from the brink won’t take kindly to additional taxes but then there’s never a good a time to ask anyone to pay more.”

EU Closing Prices#FTSE 7191.8 +0.68%#DAX 15930 +0.95%#CAC 6644.3 +0.72%#EU50 4247 +1.01%

Prices are indicative only.#BUXTradingBellAlert #EUMarket

— BUX Markets (@BUXMarkets) September 6, 2021

We’ll be back tomorrow. Goodnight. GW

With Wall Street closed for Labor Day, it’s time for a recap.

UK businesses have reported fresh signs that the supply chain crisis, and Brexit disruption, are hurting the economy.

Growth in the UK’s construction sector has fallen to a five-month low, as “supply chain disruption” hit building firms, and drove up costs sharply.

Construction firms said the cost of materials was rising at among the fastest rates since the 1990s, as severe and sustained supply chain issues held back growth across the industry, according to a closely watched survey of the industry.

Duncan Brock, the group director at Cips, said:

“A combination of ongoing Covid restrictions, Brexit delays and shipping hold-ups were responsible as builders were unable to complete some of the pipelines of work knocking on their door.

“Material and staff costs went through the roof as job hiring accelerated to fill the gaps in capacity left behind by employee moves, overseas worker availability and brought on by skills shortages.”

Car sales fell to their lowest August total since 2013, as the global shortage of semiconductors continued to hurt production across the automotive industry.

New car registrations fell 22% year-on-year, with just 68,033 new cars registered.

New car sales in August were down 20,000 year on year, with chip shortages persisting

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Mike Hawes, the chief executive of the SMMT, said:

“The global shortage of semiconductors has affected UK, and indeed global, car production volumes, so new car registrations will inevitably be undermined.”

The CBI warned that the UK’s labour crisis could last for up to two years, as it called for ministers to take action on visas for foreign workers and stop “waiting for shortages to solve themselves”.

The labour shortage has hit Wagamama, with the restaurant chain is struggling to hire chefs at a fifth of its sites.

The Unite union warned of concrete supply disruption this autumn, if lorry drivers employed by construction materials group Hanson vote for strike action in a dispute over pay.

The threat of strike action by lorry drivers at the Booker distribution network, which is part of Tesco, has also raised the prospect of further disruption this autumn amid Britain’s worst supply chain meltdown since the 1970s.

Aluminium prices jumped to their highest in a decade, after soldiers claimed to have seized power in Guinea, a key producer of bauxite, raising fears of supply disruption.

A coup in Guinea has fueled concerns over raw material supplies, at a time when global output is already constrained and demand is booming. The country is a major supplier of bauxite (the feedstock needed to make aluminum) https://t.co/5TeoEFfets pic.twitter.com/1MvuyY8bQC

— Bloomberg Economics (@economics) September 6, 2021

German factories have seen an unexpected surge in orders, boosted by strong overseas demand for major goods such as ships.

But eurozone investor confidence has weakened, as the region’s recovery passes its peak.

In the airline world, British Airways and Lufthansa have resumed flights from London City airport as pan-European business travel shows the first signs of picking up....

... while Ryanair has terminated talks on a large order of Boeing 737 Max jets after failing to reach an agreement on price with the US planemaker.

The City watchdog has issued a warning about the risks of buying crypto assets promoted by social media influencers such as Kim Kardashian West, and said people with little understanding of the risks were buying into digital currencies for fear of missing out.

Goldman Sachs is preparing to list a new investment vehicle, Petershill Partners, on the London Stock Exchange in a move that could value the unit at £3.6bn thanks to a boom in the private equity market.

Burger chain Byron has been accused of creating a “hostile environment” between managers and waiting staff who fear their tips are about to be diverted to increase pay for kitchen workers and restaurant managers.

The London Metal Exchange’s historic “ring” has reopened, for the first time since March 2020.

Open outcry trading has returned to the City today -- with brokers once again setting benchmark prices in person at the London Metal Exchange’s historic “ring”.

They have returned to the Ring for the first time since being sent home in March 2020, as the pandemic hit the UK.

But while traders will be shouting and using hand signals to set metals prices again, there are some changes. As a compromise, open outcry trading will be used for setting official prices at lunchtime, but the trading day’s closing prices will be set electronically.

The Evening Standard has more details:

The return was seen as symbolic of life returning to the Square Mile, but significant changes introduced during the 19th century trading floor’s 18-month pandemic closure will remain in place.

As part of a compromise deal to balance the ring’s traditional role with modernisation of other exchanges, the LME announced in June that the traders will now only be responsible for setting “official” prices of metals like aluminium and copper at around lunchtime.

Closing prices will stay electronic, which is expected to lead to a sharp reduction in the amount of trading that takes place on the floor.

Keeping face-to-face trading Covid-19 secure will be tricky, given traders will be working enthusiastically close together.

LME chief executive CEO Matthew Chamberlain said:

“Our ability to mitigate Covid risk is limited. You can’t tell these traders to keep their voices down, or wear a face mask or put them in a Perspex box. It would fly against the way they operate.”

Photos from the Ring show that some attendees have been wearing face shield visors:

The City watchdog has issued a warning about the risks of buying crypto assets promoted by social media influencers such as Kim Kardashian West, and said people with little understanding of the risks were buying into digital currencies for fear of missing out.

In a warning that appeared to be targeting younger investors, the Financial Conduct Authority (FCA) cautioned against buying into the “hype” of cryptocurrencies, particularly new tokens backed by celebrities that may end up being fake.

“The hype around them generates a powerful fear of missing out from some consumers who may have little understanding of their risks,” the FCA chair, Charles Randell, said in a speech prepared for the Cambridge International Symposium on Economic Crime on Monday.

“There is no shortage of stories of people who have lost savings by being lured into the crypto bubble with delusions of quick riches, sometimes after listening to their favourite influencers, ready to betray their fans’ trust for a fee.”

Severe shortages of building materials dragged down activity in the UK construction industry last month, in the latest sign of Covid and Brexit disruption hitting Britain’s post-lockdown oh economic recovery.

Construction firms said the cost of materials was rising at among the fastest rates since the 1990s, as severe and sustained supply chain issues held back growth across the industry, according to a closely watched survey of the industry.

The latest snapshot from IHS Markit and the Chartered Institute of Procurement and Supply (Cips) revealed a decline in growth across housebuilding, commercial work and civil engineering as the restricted supply of materials and transport issues began to weigh on overall construction activity.

The monthly purchasing managers’ index (PMI) fell to 55.2 in August, down from 58.7 in July on an index where anything above 50 separates growth from contraction. City economists had forecast a reading of 56.9.

Duncan Brock, the group director at Cips, said:

“A combination of ongoing Covid restrictions, Brexit delays and shipping hold-ups were responsible as builders were unable to complete some of the pipelines of work knocking on their door.

“Material and staff costs went through the roof as job hiring accelerated to fill the gaps in capacity left behind by employee moves, overseas worker availability and brought on by skills shortages.”

Business leaders are warning chronic shortages of workers and key materials are beginning to weigh on Britain’s economic recovery from the winter lockdown, with disruption to global supply chains caused by the pandemic exacerbated by Brexit migration rules and border controls introduced at the start of the year.

Sales of new cars slumped by more than a fifth last month to their lowest August level in eight years, as the global shortage of semiconductors continues to hurt production across the automotive industry.

The Society of Motor Manufacturers and Traders (SMMT) said that just over 68,000 new cars were registered in the UK last month, a 22% fall compared with August last year.

New car sales in August were down 20,000 year on year, with chip shortages persisting

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While demand in August is typically weaker than other months, with many buyers holding off for the new number plate change in September, the SMMT said the chip shortage is affecting vehicle production.

“While August is normally one of the quietest months for UK new car registrations these figures are still disappointing, albeit not surprising,” said Mike Hawes, the chief executive of the SMMT.

“The global shortage of semiconductors has affected UK, and indeed global, car production volumes so new car registrations will inevitably be undermined.”

The price of aluminium has hit a fresh 10-year high today, as reports of a coup in Guinea added fresh fuel to its rally.

Guinea is a major supplier of bauxite, the ore processed to produce aluminium.

Yesterday, an elite army unit announced it has seized power in the west African country, deposing the president, Alpha Condé, and imposing an indefinite curfew.

Aluminium had already been trading at a decade high, and concerns over potential disruption to Guinea’s output drove it higher.

Reuters has the details:

Benchmark aluminium on the London Metal Exchange (LME) was up 1.1% at $2,757 a tonne at 10:59 GMT after touching its highest since May 2011 at $2,775.50.

Prices are up about 40% this year.

Aluminium prices hit decade high on Guinea coup https://t.co/Mo54hyRDJV

— FT Commodities (@ftcommodities) September 6, 2021

Aluminium is used widely, from cans and packaging to construction and aerospace, and is also used in electric cars - both in the batteries which power them, and in the bodies of some vehicles, to reduce weight.

Prices have jumped as demand has risen, and as curbs on electricity use at Chinese smelters hit output.

Last week, Coca-Cola’s British and continental bottling operation said it was facing a shortage of aluminium cans.

So these price rises, and potential shortages, could add further disruption to supply chains.

China imports more than half of its bauxite from Guinea, according to Bloomberg, which says:

The ready availability of cheap, high-quality Guinean bauxite helped cement China’s position as global leader in aluminum output. But it also leaves the world aluminum market exposed to disruptions in the African country....

The outcome of the coup attempt is unclear, but the political turmoil offers a test for this relatively new supply chain. Investors need to mull a range of possibilities, from a relatively peaceful power transfer in Conakry that preserves the bauxite status quo, to more disruptive scenarios that curb shipments.

Aluminum surged to its highest in a decade after a military coup in Guinea. Here's why https://t.co/zAH6BXTTdu

— Bloomberg (@business) September 6, 2021

Investors across the eurozone have turned gloomier this month, suggesting the region’s economy recovery has past its peak.

Research group Sentix’s index of eurozone investor confidence has dropped to 19.6 points this month, down from August’s 22.2.

That’s the lowest reading since April, and weaker than expected, signaling that growth slowed.

A gauge of investors’ future expectations dropped for the fourth month running to its lowest level since May 2020 (from 14.0 to 9.0), while a measure of current conditions was unchanged.

Eurozone September Sentix Investor Confidence Report – Sentix
Sentixhttps://t.co/LqW8zs2oUY pic.twitter.com/VSKdPM67FO

— LiveSquawk (@LiveSquawk) September 6, 2021

"Yet another fall in expectations." @MelanieDebono on #Eurozone #Sentix, September #PantheonMacro

— Pantheon Macro (@PantheonMacro) September 6, 2021

Sentix managing director Manfred Hübner explains:

The economic recovery process that has been going on for about a year after the painful lockdown in spring 2020 has passed its zenith for the time being....

The question now is whether we are dealing with a trend reversal or a growth slowdown, as is typical for the middle phase of an economic recovery. So far, the signs point to the latter. The further development in China is likely to be decisive

Hübner also warned that the momentum of the global economy is slowing.

For the global economy, too, the signs point to a so-called “mid-cycle slowdown”, i.e. a slowdown in growth in the middle of the cycle. The Asia ex-Japan region is particularly affected, where the overall index has already weakened for the fifth time in a row.

The situation index fell to its lowest level since February 2021.

A ‘perfect storm’ has hit UK builders as they struggle to get hold of material and labour. warns Jan Crosby, head of infrastructure, building and construction at KPMG UK.

The industry is telling us that this is one of their biggest concerns right now, and that supply chain delays are preventing them from taking on new work to grow their construction businesses at a time when the economy is bouncing back.

Global demand for materials, the HS2 high-speed rail project, the shortage of lorry drivers, and the loss of some EU workers after Brexit are all shaking up supply chains, making it harder for construction firms meet demand.

Crosby explains:

“The scale of HS2 is acting as a magnet for certain elements of the supply chain, including heavy equipment and cement; the global demand for steel and timber is pushing up prices and lead times for most goods can take much longer than normal. Additionally, labour in the south has been impacted by Brexit and HGV drivers are in high demand.

“The good news is that demand remains high across most markets – particularly residential and infrastructure. Rising end prices for houses and real estate are often fully mitigating the impact of the cost increases – at least in the private sector. However, availability will act as a break on how much the industry can respond to the high demand.

“This month has again seen slow growth for the sector. The ongoing lorry driver shortages and lack of stock mean these supply vs demand worries aren’t going away quickly.

Britain’s builders have also been hit by supply chain problems in August.

The UK construction sector grew at the slowest pace since February, as “sustained, and severe, supply chain disruption” hit building firms, and drove up costs sharply.

Data firm IHS Markit reports that its UK Construction PMI fell to 55.2 in August, down from 58.7 in July.

That shows a sharper slowdown than expected, as the restricted supply of materials and transport began to weigh on overall construction activity [any reading over 50 shows growth].

Builders reported that supply chains were stretched, with some struggling to either source raw materials and parts, or receive them, as supplier delivery times continued to lengthen.

Ongoing material shortages are being exacerbated by a lack of transport and freight availability, and congestion at the ports, the report says.

Usamah Bhatti, Economist at IHS Markit, explains:

Supply chain disruption continued to disrupt activity across the UK construction sector, as demand for materials and logistics capacity outstripped supply.

Average vendor performance continued to deteriorate at a near-survey record rate, as firms noted severe shortages of building materials, a lack of available transport capacity and long wait times for items from abroad due to port congestion.

This drove up input cost inflation, which accelerated at the second-fastest rate in the 24-year history of the survey (beaten only by June’s record rise).

Builders said concrete, fuel, steel and timber all jumped in price, for example.

Growth slowed across housebuilding, commercial work and civil engineering activity, with a dip in new order growth too.

Job creation fell to a four-month low, as rising costs and “a lack of skilled workers” led to a slowdown in hiring.

Markit points out that the supply chain crisis is weighing on client confidence too:

Businesses noted a continued resumption of projects that had been delayed due to Brexit and the COVID-19 pandemic, though client confidence was dampened by volatility in raw material supplies and increased cost burdens.

Reaction to follow...

Karen Johnson, head of retail & wholesale at Barclays Corporate Banking, warns that supply chain problems could hit car sales in September, usually a bumper month for demand:

“We might be in the ‘new normal’, but it’s the same old patterns for UK car dealers. August has upheld its reputation as a typically quieter month for new car registrations, with sales falling both month on month and year on year.”

“Although there continue to be positive reports of strong used car sales, dealers across the country will already be looking ahead and wondering how much the shortage of new vehicles is going to impact registrations in September?”

James Fairclough, CEO of AA Cars, says supply problems mean dealers have fewer cars to sell.

“After a poor July, sales of new cars continued to disappoint in August. But there is an important silver lining to the clouds currently hanging over the market - the culprit is likely to be patchy supply rather than flagging demand.

“In July the number of cars leaving UK factories and heading for the domestic market slumped by 38.7%, meaning that despite dealers’ best efforts to fulfill orders as quickly as possible, too often they just don’t have the vehicles to sell.

Seán Kemple, Managing Director of Close Brothers Motor Finance, points out that major carmakers such as Toyota cut production due to chip shortages, and others may follow:

“Unless something drastically changes in the remaining four months of the year, it’s looking unlikely that the manufacturing shortages hitting the car industry will level out by the end of 2021. The ongoing impact of the chip shortage means that a full recovery is not in sight for quite some time.

“Retailers are being asked to sell according to what manufacturers are able to produce, meaning that consumer choice is limited. However, this means consumers may be more likely to get a discounted price. For customers who aren’t willing to be flexible, it may be best to wait for things to get back to normal and for manufacturing to pick up again.”

“Despite the challenges in the car industry, we’re seeing more people wanting to drive and considering car ownership; many don’t want to use public transport due to health reasons and persisting Covid anxiety. With this in mind, dealers need to be upfront with their customers about what cars they have available, and perhaps be prepared to be flexible on price points given the lack of options.”

Just in: last month was the weakest August for UK car sales in eight years, as supply issues continue to undermine the market.

Industry body the Society of Motor Manufacturers and Traders reports there were just 68,033 new cars registered in August, a drop of 22% compared with last year.

That’s the weakest monthly performance for any August since 2013, and 7.6% below the average over the last decade (August is usually a quiet month, as buyers wait for the new year plate-change in September).

The SMMT says the fall is partly due to constrained supply, as the global shortage of semiconductors undermines production volumes.

Mike Hawes, SMMT chief executive, said the figures are disappointing, although not wholly surprising.

The global shortage of semiconductors has affected UK, and indeed global, car production volumes so new car registrations will inevitably be undermined. Government can help by continuing the supportive Covid measures in place currently, especially the furlough scheme which has proven invaluable to so many businesses.

“As we enter the important September plate-change month with an ever-increasing range of electrified models and attractive deals, buyers in the market for the new 71 plate can be reassured manufacturers are doing all they can to ensure prompt deliveries.”

So far this year, UK car registrations are 20.3% higher than in 2020, when the early waves of Covid-19 hit the economy. But, they are still 25% below the 10-year average for January-August.

In August, registrations by private, business and fleet buyers all fell by double digits in the month. Fleet purchases were worst hit, down 27.5%, while sales to individuals dropped 15.2%.

The eurozone construction sector shrank last month, hurt by rising cost pressure and severe supply chain disruption.

Data firm IHS Markit’s latest survey of purchasing managers at eurozone building firms found:

• Further decline in output despite renewed growth of new orders
• Cost burdens rise rapidly amid severe supply-chain disruption
• Confidence around the 12-month outlook weakens

Companies blamed the drop in activity on raw material and labour shortages, which disrupted work on site, along with rising input prices (materials and wages).

There were longer delays obtaining supplies, which were “overwhelmingly attributed” to raw material shortages and supply bottlenecks.

This pulled Markit’s eurozone construction PMI down to 49.5 in August from 49.8 in July. That’s further below the 50-point mark showing stagnation, indicating a small drop in activity.

Eurozone housebuilding activity did pick up in August, but this was countered by a fall in commercial building and civil engineering work.

And there were “sharp and accelerated” declines among French and German construction firms, which offset a series-record upturn in construction output in Italy.

LiveSquawk: German August Construction PMI Report – IHS Markit
IHS Markithttps://t.co/jAFS7AErqq pic.twitter.com/5FsBOON53b

— Value's Vector (@pulpmarkets) September 6, 2021

Usamah Bhatti, Economist at IHS Markit, said:

“The downturn in the eurozone construction sector extended into its second month in August, as businesses reported a slightly quicker fall in activity. Positively, growth in new business inflows resumed, albeit at a marginal pace, marking the third rise in new orders in four months.

That said, firms continued to report widespread shortages of raw materials and labour across the bloc and beyond, which placed everincreasing strain on supply chains and cost burdens.

The rate of input price inflation softened from July’s peak, but remained among the strongest seen since the series began in January 2000. Increased headwinds, notably from local and global supply chains, dampened business confidence.

The degree of optimism eased to the softest since May. At the national level, only Italian firms indicated a rise in activity, and one that was the fastest on record. Yet this was offset by sustained declines in Germany and France.”

European stock markets have opened higher, as investors conclude that Friday’s bad US jobs report is good news for asset prices.

In London, the FTSE 100 is up 0.5% or 36 points at 7174.

Tech-focused investment trust Scottish Mortgage (+1.8%) is the top riser, along with the London Stock Exchange Group (+1.7%), Asia-focused bank Standard Chartered (+1.4%), retailer JD Sports (+1.5%) and mining giant Glencore (+1.3%).

The pan-European Stoxx 600 has gained 0.3%, with rises in Germany, France and Spain, and a 0.7% jump in Italy.

The sharp fall in US job creation in August -- just 235,000 payroll gains, down from over one million in July -- seems to have calmed the markets.

With the delta variant hitting America’s economy, there’s less danger of the US Federal Reserve tapping the brakes on its stimulus programme, the theory goes.

Richard Hunter, Head of Markets at interactive investor, says:

“A major miss from the US unemployment reading has had the ironic impact of reducing investor jitters.

The Delta variant, as largely expected, has continued to impact new job openings, particularly in the areas of hospitality and retail. At the same time, there may be a reluctance for some potential workers to seek employment until the variant subsides. The non-farm payrolls figure of 235000, as compared to the expected consensus of 750000 was below even the lowest of estimates and is further proof that the strength of the US recovery may plateau until normal service can be resumed in society.

That being said, the July figure was also revised to 1.05 million jobs added from the initial reading of 943000, and even the notoriously uneven August figure may yet be subject to revision.

In contrast, the unemployment rate fell in August and wage inflation was muted, suggesting that the Federal Reserve narrative of no imminent stimulus tapering will remain in place, with December now being seen as the earliest possible time.

German factories have seen an unexpected surge in orders, boosted by strong overseas demand for major goods such as ships.

Orders for German-made goods jumped by 3.4% in July, official data from Destatis shows. It lifts new orders to the highest level since the survey began in 1991, after reunification.

Economists had forecast a 1% fall. The stronger-than-expected data suggests Germany’s manufacturing sector has made a decent start to the second half of this year.

#Manufacturing in July 2021: new orders up 3.4% on the previous month https://t.co/WErqmik7jL pic.twitter.com/FMqYE80mCf

— Destatis news (@destatis_news) September 6, 2021

The jump in orders was driven by overseas demand from countries outside the eurozone. It rose by 15.7%, due to “many major orders especially from the shipbuilding sector.”

But domestic orders fell by 2.5%, and new orders from the euro area decreased by 4.1%.

If you strip out those major orders, there was a decline of 0.2% in July 2021.

German factory orders surged in July thx to big ticket orders, while core orders remained about flat at historically high levels. Real news is the 1.9% m/m jump in turnover suggesting that industrial production will surprise to the upside of consensus (0.7% m/m vs. 1.5% OE). https://t.co/EqHLA1vKei pic.twitter.com/jWxLerELj1

— Oliver Rakau (@OliverRakau) September 6, 2021

But German factories now face the challenge of filling these orders, given the global scramble for raw materials, parts and workers.

Bastian Hepperle, economist at Bankhaus Lampe, said (via Reuters)

“The development in Germany is disappointing: the order books are still well filled and the order backlog is high.”

“Due to a lack of materials and primary products, there are considerable difficulties in processing orders.”

German factory orders boosted by foreign demand for shipshttps://t.co/bfKNymvMNp via @jrandow pic.twitter.com/SAyKgXNfrC

— Zoe Schneeweiss (@ZSchneeweiss) September 6, 2021

The labour crisis could last for up to two years, Britain’s leading business lobby group has warned, as it called for ministers to take action on visas for foreign workers and stop “waiting for shortages to solve themselves”.

Amid the most severe labour crunch since the 1970s, the Confederation of British Industry (CBI) launched a broadside against the government, saying the UK’s economic recovery from the winter lockdown was being undermined by a lack of skills in key positions, with mounting risks that the problem would continue for some time.

“Standing firm and waiting for shortages to solve themselves is not the way to run an economy,” said the CBI director general, Tony Danker, whose group represents 190,000 businesses with more than 7 million employees.

“We need to simultaneously address short-term economic needs and long-term economic reform.”

He said the government’s ambition to make the British labour force more highly skilled and productive was right, and that businesses would train and hire more homegrown workers in time, but added that this could not be achieved overnight.

“A refusal to deploy temporary and targeted interventions to enable economic recovery is self-defeating.

The CBI is calling for the government’s shortage occupation list, which helps recruit workers from abroad to fill particular skills gaps, to be updated to include lorry drivers, welders, butchers and bricklayers.

Here’s the full story:

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

UK car sales have dropped as the sector struggles with supply chain problems and staff shortages, and the pandemic weighs on the economy.

The latest industry data, being released this morning, is expected to show new car registrations in August fell by around 22% compared with a year ago, as the global shortage of semiconductor chips continues to hit output.

This follows a drop of almost 30% in July, when the ‘pingdemic’ of people self-isolating also hit sales.

Demand could also be suffering from more people shifting to hybrid working patterns, and the dip in UK consumer confidence in August.

Reuters has more details:

British new car registrations in August fell 22% year on year, preliminary industry data showed on Monday, with the sector still battling pandemic-related supply difficulties.

Over the first eight months of the year the market is up about 20% from 2020, the Society of Motor Manufacturers and Traders (SMMT) said, though numbers remain below pre-pandemic levels as the sector contends with semiconductor chip shortages caused by the coronavirus crisis.

Demand is normally quiet in August because many buyers wait until the licence plate series is updated in September, one of the two annual updates.

UK new car sales fell 22% in August, preliminary data shows https://t.co/JdhjnrPvIK pic.twitter.com/lDOemjkQ20

— Reuters (@Reuters) September 6, 2021

Last August, car dealers got a post-lockdown sales boost as they reopened after the first wave of Covid-19.

But this year, they’re facing supply challenges, with the number of cars rolling off UK production lines dropping in June, to the lowest level for that month in almost 70 years.

The SMMT will release August’s final sales figures at 9am UK time.

Last month, Volkswagen and Toyota both warned of production cuts because of the global computer chip shortage. Last Friday, Volvo warned that its sales could fall in the second half of 2021, after being forced to cut production due to material shortages.

The latest healthcheck on UK and eurozone construction firms will also show the impact of supply chain problems.

The latest UK construction PMI is expected to see a slowdown, from a pacey 58.7 in July to around 56.9 in August.

European stock markets are set to open slightly higher, after dipping on Friday after a surprisingly weak US jobs report. Wall Street is closed for Labor Day.

European Opening Calls:#FTSE 7149 +0.15%#DAX 15800 +0.12%#CAC 6697 +0.11%#AEX 791 +0.20%#MIB 26098 +0.13%#IBEX 8856 -0.09%#OMX 2377 +0.29%#STOXX 4207 +0.11%#IGOpeningCall

— IGSquawk (@IGSquawk) September 6, 2021

The agenda

• 8.30am BST: Eurozone construction PMI for August
• 9am BST: New UK car registrations for August
• 9.30am BST: UK construction PMI for August
• 9.30am BST: Sentix survey of eurozone investor confidence
• 10.30am BST: New German car registrations for August