German GDP fell 0.1% in last quarter but winter recession avoided. Newsflash: Germany’s economy slightly shank in the last quarter, but it not fall into recession last winter as previously thought. New economic data just released shows that German GDP fell slightly, by 0.1%, in the third quarter of 2023 compared with the second quarter of the year. That puts Europe’s largest economy halfway into a technical recession (two quarters of negative growth in a row). The Federal Statistical Office reports that household final consumption expenditure fell, while there were positive contributions from investment in machinery and equipment. However, GDP for the second quarter of 2023 has been revised to show 0.1% growth, up from 0% previously. And GDP for the first quarter has been revised higher too, to show stagnation rather than a 0.1% fall, following a 0.4% drop in GDP in Q4 2022. That means Germany did not drop into a technical recession last winter. Closing post Time to wrap up – here’s today’s main stories: Door and window seller Safestyle has fallen into administration, with the loss of around 680 jobs. Germany has dropped halfway into recession, after GDP shrank by 0.1% in the last quarter. UK mortgage approvals have fallen, as high interest rates hit demand for home loans. Britain’s FTSE 100 has rebounded today, after hitting its lowest level since August on Friday. The blue-chip share index is up 41 points, or 0.57%, at 7332 points. Full story; Around 680 Safestyle workers lose jobs after window firm enters administration Administrators for Safestyle have said the business has made around 680 of its workers redundant after it fell into administration, PA Media report. Interpath Advisory said around 70 of the door and window maker’s 750 employees would be kept on in the short term to help wind down the business. It comes after Safestyle said on Friday it intended to appoint administrators after failing to find a buyer. The Bradford-headquartered business has a manufacturing site in Wombwell, near Barnsley and 42 branches and depots across the country. The company failed after facing a series of pressures, including runaway inflation and poor consumer confidence, administrators said. The unseasonably warm weather in September also dented demand for its products. Safestyle suspended its shares from trading in London last Friday after it realised that a hoped-for rescue deal was unlikely to give shareholders any money back. Later in the day the company said that even such a potential deal had proven impossible and the company was going to appoint administrators. The company’s subsidiary HPAS and holding companies Style Group Holdings and Style Group UK concluded that they could not keep trading as a result. Rick Harrison, managing director at Interpath Advisory, said: “These are really challenging times for companies across the home improvement market. “After seeing strong sales during the Covid lockdown periods, many companies are seeing trading being impacted by the cost-of-living crisis and soaring costs.” He added: “Unfortunately for Safestyle, and despite the tireless efforts of the management team over recent months, these challenges have proven too difficult to overcome. “This will be particularly devastating for the company’s employees, as well as the many self-employed contractors who worked on behalf of the company. “Our immediate priority will be to provide support to those impacted by redundancy, including supporting them in making claims to the Redundancy Payments Service where relevant.” Shares in Meta have jumped over 2% after it announced plans today to offer users in Europe a subscription plan to use Facebook and Instagram without advertisements. The monthly subscription plans for users in the EU, European Economic Area and Switzerland, will cost €9.99 for web users, while iOS and Android users will have to shell out €12.99 a month. The move could help the company comply with the European Union regulations, which will curb Meta’s ability to personalize ads for users without their consent. 680 job losses as door and window seller Safestyle enters administration Around 680 workers at door and window seller Safestyle have been made redundant after the business fell into administration, administrators at Interpath Advisory said. The GMB union has said that Safestyle workers were “completely let down by mismanagement from the very top of the business”. Lee Parkinson, GMB Organiser added: “More than 600 workers have been cruelly cut off from work, weeks before Christmas, with no guarantee that they will even get last week’s pay-check. “The impact of this closure upon the community of Barnsley cannot be overstated. It is simply devastating. In New York, stocks have opened higher as markets shrug off some of their concerns over escalating conflict in the Middle East. The Dow Jones industrial average has gained 309 points, or almost 1%, to 32,727, while the tech-focused Nasdaq Composite is 1.15% higher. The oil price has dipped today, though, with Brent crude dropping by 1.5% today to around $89 per barrel. There’s a ‘risk-on’ mood in the markets today, at the start of a busy week which will see central bank decisions in the UK, US and Japan, plus inflation data in the eurozone tomorrow and the US jobs report on Friday. Bob Savage, head of markets strategy and insights at BNY Mellon, says: There is still mischief to be had across the tape as markets reset for year-end as October finishes into Halloween. The second phase of the Israel/Hamas war started over the weekend, but the worst-case escalations haven’t happened. Today’s Bank of England Money and Credt report shows a drop in the amount of money in the economy, a worrying sign for economic growth. The net flow of sterling money (known as M4ex) fell sharply to -£31.5 billion in September, from -£7.5 billion in August, the BoE reports. Costas Milas, professor of finance at the University of Liverpool, tells us: Divisia money 12-month growth recorded a new historical low of -9.8% in September. This should have very worrying implications for UK GDP since Divisia money growth is a very reliable predictor of future UK growth. It should also have encouraging implications for inflation as I have explained in a recent piece for The Conversation. Inflation would most likely start dropping like a stone now... All these should, in theory, mean no change in UK interest rates this week… Here’s a handy chart showing how Germany’s economy has struggled over the last 18 months: German inflation falls Back in Germany, inflation has fallen this month as the cost of living squeeze in Europe’s largest economy eases. Statistics body Destatis reports that the inflation rate in Germany is expected to be +3.8% in October 2023, the lowest level since August 2021, down from +4.5% a month earlier. On a monthly basis, consumer prices are expected to remain unchanged compared to September. Destatis says energy prices fell by 3.2% year-on-year, which had “a particularly dampening effect on the inflation rate.” German core inflation - excluding food and energy - is expected to have fallen to 4.3%, from 4.6% in September. On an EU-harmonised basis, the German inflation rate was even lower – just 3.0% in the year to October, down from 4.3% in September. Faost food chain McDonalds has posted a 17% jump in revenues and net income in the last quarter, helped by price rises. McDonalds has beaten Wall Street expectations by reporting an 8.8% increase in comparable sales in July-September. Total revenues rose to $6.69bn, from $5.87bn the same quarter of 2022. McDonalds says its US customers spent more, due to “strategic menu price increases”, while marketing campaigns also helped grow sales. International growth was led by the UK, Germany and Canada, it adds. The company has declared a 10% increase in its quarterly cash dividend to $1.67 per share.