FTSE 100 enjoys longest run of record closing highs since 1997

London’s FTSE 100 enjoyed its longest run of record closes in 20 years, after the benchmark index set another all-time peak.

After a stellar run in the final days of 2016, the blue chip index extended its end-of-year rally, which began on December 28, into the new year.

In volatile trading, it crawled across the finish line into positive territory, up 5.57 points, or 0.08pc, to 7,195.31, marking its sixth record close in a row. This compares to the longest run of consecutive closing highs in the FTSE 100’s 33-year history in May 1997, when it finished at all-time peaks for eight straight sessions.

Britain’s benchmark index also managed to set a new all-time intraday high of 7,211.96, surpassing its previous peak of 7,205.45 which it hit on Tuesday.

However, Michael Hewson, of CMC Markets, cautioned: “There’s been little in the way of follow-through buying, suggesting some caution, in the wake of Wednesday’s Fed minutes and the clear lack of certainty with respect to the timings of further policy tightening measures.”

The recent rally has been driven by the persistent weakness in sterling. Since the Brexit vote last June, the slump in sterling has boosted multinational companies listed on the FTSE 100, with many benefiting from earnings in currencies that are stronger than the pound. US President-elect Donald Trump’s commitment to boost infrastructure spending when he takes office later this month has also contributed to the bounce in international earners on the index.

In 2016, the FTSE 100 made gains of 14.4pc, marking its best year since 2009.

With that, it's time to close the blog for today. Thanks for following our markets coverage - I'll be back again tomorrow morning.

Engineering giant Rolls-Royce slumped to its lowest level in almost seven months after JP Morgan warned the group’s earnings will be “significantly depressed” in the coming years.

In the latest blow for the FTSE 100 company, the investment bank slashed its price target to 730p from 890p highlighting a string of concerns about its civil aerospace unit. “Rolls-Royce is a much less profitable company than we had thought”, said JP Morgan analysts.

They cautioned investors that the adoption of new IFRS accounting standards will have an adverse effect on the company’s earning, as it will mean Rolls can “no longer capitalise losses on civil aero engines; no longer smooth profit over new engines and the aftermarket.”

Since 2014, the company has issued five major profit warnings. In November, it faced further embarrassment after it admitted parts of its financial forecasts were wrong. Shares tumbled 28p, or 4.2pc, to 639.5p.

On the wider market, the FTSE 100 recorded its sixth consecutive record closing high, rising 5.57 points, or 0.08pc, to 7,195.31. The longest run of consecutive closing highs in the FTSE 100’s 33-year history was in May 1997, when it finished at all-time peaks for eight straight sessions.

Housebuilders lifted the blue chip index to new heights after Persimmon said sales had climbed by 15pc since the Brexit vote last June. Revenue is also expected to rise 8pc in 2016 to £3.14bn. Shares rose 130p to £19.40. Its peers also rallied, with Taylor Wimpey adding 8p to 169.4p and Barratt Developments jumping 13.6p to 497.5p.

Next became the target of a slew of bearish broker notes a day after the retailer cut its profit forecast for the financial year. In its wake, HSBC downgraded its rating to “reduce” citing an “even more challenged” outlook for the year ahead. Meanwhile, Goldman Sachs slashed its target price to £45 from £54. The FTSE 100 stock is now on track for its biggest weekly loss in 19 years, falling 18.5pc so far this week.

Elsewhere, Micro Focus found itself  among the laggards, dropping 23p to £21.17, as it was trading ex-dividend.

Insurers came under pressure after JP Morgan said it sees “significant market volatility” this year, prompting the bank to remain “cautious” on several stocks. It also downgraded RSA Insurance to “neutral”. In its wake, shares in Prudential surrendered 41p to £16.01, Legal & General lost 4.8p to close at 247.4p, Direct Line dipped 7p to 366p, Aviva fell 2.9p to 490p, and RSA Insurance shed 2p to 574p.

On Aim, Atalaya Mining leapt 12p to 137.5p on bullish broker forecasts following last month’s achievement of 9.5Mtpa nameplate capacity at the historic Rio Tinto copper project.

Finally, shares in sports nutrition brand Science in Sports, which boasts partnerships with Team Sky and Liverpool Football Club, climbed 5.5p to 77p after it reported sales growth of 30pc to $12.24m.

In the final minutes of trading, the FTSE 100 made a comeback, helping it post its longest run of consecutive record closing highs since 1997. 

The blue chip index ended up 5.57 points, or 0.08pc, at 7,195.31 - that's its sixth consecutive record closing finish in a row. 

The longest run of consecutive closing highs in the FTSE 100’s 33-year history was in May 1997, when it finished at all-time peaks for eight straight sessions.

With just 17 minutes of trading to go, the FTSE 100 has slipped into the red, down 15.73 points, or 0.21pc, at present to 7,174.39. This means the blue chip index may snap its winning streak of record closing highs, after posting five consecutive days of record peaks. 

It comes as disappointing ADP payrolls figures weighed on the dollar. US stock markets also turned negative, with the Dow Jones and S&P 500 both 0.3pc lower. 

Joshua Mahony, of IG, said: "The common theme for many markets is the devaluation of the dollar, which has suffered in the wake of a disappointing ADP payrolls reading of 153k. At 153k, the figure represented the second lowest ADP number in 34 months. The worry of course is whether this provides an inkling of a similarly weak figure for tomorrow’s US jobs report, which would likely  spark another sharp deterioration in the dollar." 

Shares in security firm G4S are trading up 3.3pc at 240p on the back of a rating upgrade. 

US investment bank Jefferies hiked its rating to "hold" from "underperform" as it thinks trading momentum will remain "robust" in the US and Europe. It said favourable FX moves mean the London-listed company will no longer need an 8pc dilutive equity placing. 

Kean Marden, of Jefferies, said: "FX tailwinds have increased and we no longer assume an 8pc dilutive equity placing. Although we assume a modest Emerging Markets slowdown, momentum should remain robust in the US and Europe."

Royal Mail has launched a consultation into changes to its final salary pension scheme amid threats of strike action from unions. Rhiannon Bury reports: 

The company is exploring how to fund its pension scheme after 2018, when the current £1.7bn surplus is expected to run out.

Royal Mail said it cannot afford an increase to the annual £400m it currently contributes, having calculated that it needs to increase its payments to £1bn in order to keep running the fund.

Around 90,000 workers will be affected by any changes, although the move will not have an impact on anyone who has already retired. The consultation ends in March.

"With our unions, we have been actively exploring possible changes to potentially enable us to keep the plan open on a defined benefit basis after March 2018 as part of our pension review process,” the company said.

Full report here

US ISM non-manufacturing climbed to 57.2 in December, beating forecasts of flat reading of 56.6.

However, employment growth tumbled, with the index falling to 53.8 from November's reading of 58.2.

 Meanwhile, data from Markit showed that the services PMI slipped to 53.9 in December from November's reading o 54.6. However, it beat a flash reading of 53.4.

The FTSE 100 has made gains of 0.2pc in afternoon trade, which as per my earlier analysis, that puts it on track for its longest run of record closing highs since May 1997, when it recorded 8 consecutive days of closing highs. 

That winning streak between May 1 and 13 is the longest run of consecutive record closing highs in the 33-year history of the FTSE 100. 

Back over to the US where jobless claims fell towards a 43-year low last week, pointing to a further tightening in the labour market. 

Initial claims for state unemployment benefits dropped 28,000 to a seasonally adjusted 235,000 for the week ended Dec. 31, the Labor Department said this afternoon. 

US stocks opened in negative territory for the first time this year as economic data and Fed's December minutes weighed on banking stocks. 

At the opening bell: 

• Dow Jones: -0.04pc
• S&P 500: -0.06pc
• Nasdaq: +0.15pc

Funding Circle has secured an extra £40m from the Government to lend to small businesses, providing fresh capital at a time when business borrowing is facing a squeeze.

The firm, which pairs lenders with small companies, said the state-owned British Business Bank will lend directly through its platform alongside other backers including more than 50,000 individuals.

The cash injection follows £60m in earlier UK Government support.

“A key part of our remit is to support the development and growth of such finance markets, while earning an attractive, commercial return for the taxpayer. We look forward to seeing our latest commitment to Funding Circle enabling the growth and success of many more businesses across the UK,” said Catherine Lewis La Torre, chief executive of British Business Bank Investments.

Report by Marion Dakers (Continue reading here)

Moody's will make rating calls on Britain, China and South Africa this year as political risk looms. 

In an interview with Reuters, Alastair Wilson, Moody's managing director of sovereign risk, said the "mood music" of the Brexit talks will help decide whether to strip the UK of its triple-A rating. 

Moody's is due to review the UK on June 2 and then on September 22. By then formal EU divorce proceedings should have started.

"Brexit is negative for the UK from a credit perspective, the question is how negative. We will only start to learn that over the next few months or year as the negotiations really pick up steam," he said.

 Bank of England Chief Economist Andy Haldane said this afternoon that the central bank was right to keep an eye on a strong increase in consumer lending but that there were reasons to believe that the pickup was not a major problem.

Haldane also said the BoE's current neutral stance towards monetary policy felt like the right way of balancing the trade-off between rising inflation and supporting economic growth.

BoE data earlier this week showed lending to consumers expanded in November by the largest amount in more than 11 years. 

"You'll have seen and read from our Financial Policy Committee that this is something that they're keeping a close ... eye on. And they are right so to do," Haldane said at an event in London hosted by the Institute for Government.

"Nonetheless, we need to put all this in a bit of context. Aggregate borrowing by households isn't tearing away right now. We've gone through a long period where borrowing, both by companies and households, has actually been rather subdued."

Report from Reuters

Elsewhere, Sports Direct chairman Keith Hellawell was re-elected today after Mike Ashley backed him. Our retail correspondent Ashley Armstrong reports: 

Keith Hellawell, the chairman of Sports Direct, has been spared from another shareholder revolt by Mike Ashley who has thrown his weight behind the embattled former policeman for a second time.

Mr Ashley's support comes after even more independent shareholders voted against Mr Hellawell's re-election in a second poll held at Sports Direct's Shirebrook headquarters. 

The Sports Direct chairman suffered an earlier rebellion during the company's annual meeting in September when independent shareholders raised concerns about a lack of corporate governance at the sportswear giant.

According to the second vote, 53.9pc of independent shareholders voted against Mr Hellawell's re-election compared to 52.9pc in September. 

The influential shareholder advisory body, ISS, had urged investors earlier this week to rebel against Mr Hellawell, 74, for "overseeing a catalogue of governance and operational failures".

Continue reading here

US stock index futures pointed to a flat opening call on Wall Street after the Fed's minutes from its December minutes, which were released last night, showed policymakers thought President-elect Donald Trump's pro-growth policies could prompt faster interest rate hikes.

 Anthony Cheung, of Amplify Trading, said the main takeaways from the meeting stated that "almost all policymakers saw upside risk to the economic growth forecasts on exception of more expansionary fiscal policies under the Trump administration." 

"Policymakers emphasised their uncertainty on timing, size and composition of any future fiscal and economic policies. As well as that, they generally agreed to continue to closely monitory inflation, global economic and financial developments." 

After a wobble in early trade, oil prices have bounced higher this afternoon. It comes as Saudi Arabia started talks with customers about a reduction in crude sales to support a plan by Opec to reduce global supply. 

 Saudi Arabia agreed to cut output by 486,000 barrels per day (bpd), or 4.61pc of its October output of 10.544m bpd.

The news lifted Brent crude almost 1pc higher to $56.99 a-barrel. 

High street cobbler Timpson’s has bought the dry cleaning arm of Johnson Services Group for £8.25m.

Dry cleaning has been one of Timpson’s fastest growing services in recent years, along with mobile phone repairs, and the deal comes as the firm looks to diversify away from traditional shoe repairs.

Johnson’s business, which includes Johnson Cleaners, Jeeves of Belgravia, and Jeeves International, made total revenue in the year to December 2015 - the most up-to-date figure available - of £46.2m. Profits in the same period were £2m.

In 2012, the drycleaning business posted a £200,000 loss, prompting Johnson to shut unprofitable stand-alone stores and focus on areas where there are more shoppers, such as close to supermarkets. It also agreed a tie-up with Waitrose to run its units within stores. It had originally operated 500 branches, but cut the number to around 200.

Report by Rhiannon Bury (Read more here)

I've been doing a little bit of digging, and from my analysis I find that if the FTSE 100 manages to close at another record high today today, that will make it its longest run of consecutive closing highs since May 1997. 

Since December 28, the FTSE 100 has closed at a record closing high for five consecutive trading sessions. If it ends today at a record high, that will make its six consecutive all-time closing peak. 

In May 1997, the FTSE 100 recorded its longest ever run of consecutive closing highs from May 1 to May 13. Will the FTSE 100 continue to push higher? 

European bourses are standing steady this lunchtime after the FTSE 100 set another new record peak this morning. 

Here's a look at the current state of play: 

• FTSE 100: +0.08pc
• DAX: -0.06pc
• CAC 40: +0.07pc
• IBEX: +0.42pc

Connor Campbell, of SpreadEx, said: "After a negative start the Eurozone indices have managed to crawl back to where they started the day. This recovery seems to be down to the euro seeing its own gains dissipate; the currency is now only up 0.3pc after having taken nearly 1% off of sterling earlier in the morning."

Artificial sweetener maker PureCircle has blamed an ongoing dispute with the US authorities for a fall in sales over the last six months. Sam Dean reports: 

A PureCircle shipment was seized and impounded last year as part of a US Customs and Border Protection clampdown on products made with forced labour. The US authorities said they had received information that stevia being imported from China had been produced by convicts.

PureCircle shares plummeted more than 10pc to £2.22 in early trading after the company said the detainment had a direct impact on sales in the six-month period ending December 31. Sales are expected to fall 14pc to $47m (£38m) compared to $54m for the same period a year ago.

The US market accounts for a third of PureCircle’s sales, and the company added that it expected group gross profit to be $18m, down 19pc from last year. This will result in a net loss of $2m, compared to a profit of $5m the previous year.

Read more here

The FTSE 100 has taken another wobble. It's turn negative and is down just 1.74 points, or 0.02pc, at 7,187.54.

It comes less than three hours after it set a new intraday peak of 7,211.96. 

Will the blue chip index snap its winning streak today? 

The pain continues for Next. A day after the retailer cut its profit forecast for the financial year, brokers have slashed its rating. 

Goldman cut its target price to £45 from £54, with a "neutral" rating, arguing weaker revenue guidance is driven by pressure on UK consumers' real incomes. 

Meanwhile, HSBC cut its rating to "hold" citing a poor Q4 and an "even more challenged" outlook in the year ahead. 

The FTSE 100 stock is now on track for its worst week since 1998, having slumped by 18.4pc so far this week. 

Here's our full report on the UK services PMI data by economics correspondent Tim Wallace:

Economic growth accelerated in the final month of 2016, as companies across Britain’s powerful services sector reported rising demand in December.

Growth in the sector rose to its highest level in 17 months, according to IHS Markit’s purchasing managers’ index (PMI), as companies recovered from the blow to confidence inflicted by the Brexit vote.

Businesses had feared the referendum result would harm the economy but, so far, there is little evidence of any widespread slowdown.

The services PMI rose to 56.2, up from 55.2 in November. Any score above 50 indicates rising business activity, while a score below 50 shows output falling.

In July the index dropped to 47.4, so December’s figure represents a major turnaround from the gloom of the summer.

Continue reading here

Although the British economy continues to defy expectations, Chris Beauchamp, of IG, points out that in each of the three PMIs released this week "signs of higher prices due to the weaker pound can be seen".

"Thus, it looks increasingly likely that the BoE could find itself on the horns of an inflation dilemma later in the year." 

 Meanwhile, Samuel Tombs, of Pantheon Macroeconomics, urges investors to treat the PMIs with "more skepticism than usual", given that they were "misleadingly downbeat" in the third quarter. 

"Just as the PMI overstated the extent of the slowdown in Q3 because it is excessively sensitive to changes in business confidence, it might now be overstating the subsequent bounce back in activity. Meanwhile, the services sector still looks vulnerable to slowing this year as sterling’s depreciation and higher oil prices begin to erode households’ purchasing power."

After briefly dipping into the red following the strong UK services PMI, the FTSE 100 is back in positive territory. 

It is now up 0.2pc at 7,200. 

Earlier this morning, it set a new record peak of 7,211.96.

After digesting the UK services data, analysts react: 

Dean Turner, UK Economist at UBS Wealth Management: “Following an unexpectedly strong showing from the UK’s manufacturing and construction sectors earlier in the week, today’s figures demonstrate that the economy ended last year on a confident note, which bodes well for momentum heading into 2017.

“The robust nature of recent economic data has been supported by a number of factors, in particular the weaker pound, as well as looser monetary and fiscal policy.

“As we move further into the year, our expectation is that these positive effects may begin to fade. Moreover, higher inflation is likely to erode household income growth which could dampen the up to now buoyant consumer.”

Meanwhile, Chris Sood-Nicholls, managing director and head of global services at Lloyds Bank Commercial Banking, said: 

“Given the strong retail sales in the run-up to Christmas, the continued positive performance of the index is unsurprising. It caps off a strong year for the sector, with only a short, sharp decline experienced in the aftermath of the vote to leave the EU.

“Looking ahead, the fall in the value of the pound is expected to continue to push up inflation, putting pressure on household and business spending. As we head further into 2017, we may see continued uncertainty and some reluctance towards capex investment.”

Elsewhere, Fiona Cincotta, of City Index, reckons the service PMI is "the one to watch".

"It is arguably the most important of the PMI’s with biggest potential to move sterling, given the dominance of the service sector in the UK economy. With 3 strong PMI’s under our belt the UK clearly ended 2016 on a strong footing." 

Here's some reaction from Twitter to the UK services beat: 

After UK services PMI smashed expectations, here's a quick look at how markets have reacted: 

• Pound trimmed losses to 0.1pc on the day, changing hands at $1.2311 against the dollar;
• UK gilt futures extend losses by 10 ticks to hit session low;
• FTSE 100 turns negative

Meanwhile, David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said the services sector has "exceeded all expectations". 

“Keeping up with levels of new work and increased activity, additions to the workforce were maintained for the fifth month running. Though, overall, 2016 proved to be the weakest year for employment growth since 2012.

“There were reports of export business buoyed by the weak pound, adding to the strength of domestic demand. However, sterling’s persistent lows added more pressure to input prices, which expanded at a rate close to November’s five-and-a-half year high as fuel, food, IT and wage costs went up.

“Business optimism was solid, as firms increased their marketing efforts and launched new products in readiness for improved business conditions continuing into 2017. However, sentiment was lower that the survey’s long-run average, as the sector continued to stabilise after the ongoing impacts of the EU referendum result. The sector will need a persuasive argument as the terms of Brexit are negotiated for this broad-based recovery to be maintained in the New Year.”

Commenting on the UK services PMI beat, Chris Williamson, Chief Business Economist at IHS Markit, which compiles the survey, said:

“A buoyant service sector adds to signs that the UK economy continues to defy widely-held expectations of a Brexit-driven slowdown. The faster growth of services activity follows similar news of improvements in the manufacturing and construction sectors at the end of 2016.

“At face value, this improvement suggests that the next move by the Bank of England is more likely to be a rate hike than a cut, but policymakers are clearly concerned about the extent to which Brexitrelated uncertainty could slow growth this year. They will therefore consider the current resilience of the economy alongside the elevated levels of uncertainty highlighted by the historical weakness of business optimism about the year ahead. Any change in policy therefore looks unlikely in the short term, and the next move in policy could as much be a rate cut as a hike.”

Key points: 

• Growth accelerates for third straight month to 17-month high, fuelled by stronger growth in new work;
• New business increases at fastest rate since July 2015;
• Output price inflation hits 68-month record;
• The Index rose for the third consecutive month to 56.2, from 55.2;
• Growth of employment was maintained for the fifth month running in December;
• Cost pressures remained elevated at the end of 2016;
• Business expectations strengthened in December as firms reported planned marketing efforts, new products, export opportunities, acquisitions and new business premises.

 Britain's economy finished 2016 strongly, growing at the fastest rate since mid-2015, even though companies faced some of the fastest-rising costs of the past five years as sterling weakened after Britain voted to leave the European Union, an industry survey showed.

The Markit/CIPS Purchasing Managers' Index (PMI) for the services sector rose to a 17-month high of 56.2 in December, beating all forecasts in a Reuters poll of economists and rising a full point from November's reading.

More to follow

China's yuan soared against the US dollar on overnight following a sharp rise in the offshore spot rate as China worked to stem capital flows and stabilise the currency ahead of Donald Trump's inauguration as US president and the Lunar New Year.

The offshore yuan gained 0.8 percent against the dollar and traded at 6.8151 as of 0830 GMT, driven up by a rising cost of funds in Hong Kong and trading firmer than the onshore spot rate for a second straight day.

It was not clear if Chinese authorities had engineered the spike in yuan borrowing rates in Hong Kong. But they had used such a tactic several times last year to support offshore yuan exchange levels and by extension relieving some of the pressure on the yuan onshore, which is at more than eight-year lows.

The cost of borrowing yuan surged in Hong Kong, with the rate of overnight contracts jumping to its highest level in nearly a year.

The CNH Hong Kong Interbank Offered Rate benchmark (CNH Hibor), set by the city's Treasury Markets Association (TMA), rose to 38.33500pc for overnight contracts, the highest since Jan. 12, 2016. It was 16.94767pc on Wednesday.

With signs of short-term liquidity stress, the implied overnight deposit rate for the offshore yuan stood at 90.393 percent as of 0830 GMT, after soaring as high as 101.694pc earlier on Thursday.

The rate closed at 10.587pc a day earlier.

Report from Reuters

Oil prices slipped 0.3pc to $56.30 a-barrel amid lingering doubts that producers will fully deliver on promises to cut production. 

Anthony Cheung, of Amplify Trading, also highlights the impact API crude inventories data  had on oil prices last night. Crude inventories fell by 7.4m barrels in the week ended December 30 to 482.7m, compared with analysts' expectations for a decrease of 2.2m barrels.

Gold touched its highest level in four weeks on the back of the weaker dollar, which edged away from a 14-year peak it hit earlier this week. 

The precious metal rose by 1.3pc to $1,178.36 an ounce, its highest level since December 7. 

Naeem Aslam, of Think Markets, said the Fed minutes for December, which were released last night, have made "the dollar bulls wary". 

"The risk of a blowout is really high and the dollar index moved too fast and too quick. The Fed is surely betting that Donald Trump will be able to deliver when it comes to fiscal spending and tax reforms. But the reality may be far off what the market is positioned for.

"2017 is a very important year from the political point of view and two many pieces are moving together which are creating the biggest threat for globalisation and integration.  This makes the yellow metal highly attractive and we think it has a strong potential to break the resistance of 1200. The near term support is at 1156."

British housebuilder Persimmon has jumped to the top of the FTSE 100 this morning, up 4.5pc at £18.91, after it posted an 8pc rise in full-year revenue. Sam Dean reports: 

One of Britain’s biggest housebuilders saw an increase in sales thanks to a “healthy customer demand for new homes” since the UK voted to leave the European Union.

Sales at Persimmon for the second half of 2016 were 15pc up from the same period in 2015, helping the FTSE 100 company post an 8pc rise in revenue, it said in a trading update today.

Full-year revenues rose 8pc to £3.14bn, with the company selling a total of 15,171 new homes compared to 2015’s 14,572. The average selling price also increased by 4pc to £206,700.

Persimmon said buying a new-build home “remains a compelling choice” despite ongoing uncertainty over Brexit, with competitive mortgage offers making the purchase of new homes “very affordable”.

Continue reading here

Insurers became the biggest laggards on European bourses after JP Morgan slashed the ratings of several companies in the sector. 

The investment bank downgraded RSA Insurance and lowered its price target of Hannover Rueck. 

Here's a look at the current state of play in Europe: 

 Mike van Dulken, of Accendo Markets, said the minor pullback in European equities comes "in spite of Wall St gains and mixed session in Asia overnight as investors digest Fed minutes that suggest both hawkishness and uncertainty in the ranks about the effects of incoming president Trump’s policies on US monetary policy and thus rate rise timing."

The FTSE 100 has continued its winning streak for a six consecutive trading session, setting a new intraday record high in early trade. 

London's blue chip index touched 7,206.92 surpassing its previous high of 7,205.45. It is currently trading 16.33 points, or 0.23pc, higher. 

Connor Campbell,  of SpreadEx, said: "Since that initial flurry of record-breaking energy on Tuesday this first week of 2017 has been incredibly sluggish, a trend that hasn’t disappeared this morning.

"That final boost of momentum could be provided by the incoming services despite the fact that analysts are forecasting a dip month-on-month, from 55.2 to 54.8, as both the construction and manufacturing PMIs have exceeded expectations this week." 

Good morning and welcome to our live markets coverage. 

Last night, the minutes from the Fed's December meeting were released. They showed how broadly views within the Fed are shifting in response to President-elect Donald Trump's promises of tax cuts, infrastructure spending and deregulation.

 Almost all Federal Reserve policymakers thought the economy could grow more quickly because of fiscal stimulus under the Trump administration and many were eyeing faster interest rate increases.

Today, attention shifts to UK services PMI after better than expected construction and manufacturing data. 

Previewing the economic data release, Mike van Dulken, of Accendo Markets, said: "UK PMI Services is key given the sector accounts for almost 80pc of GDP. Consensus expects a slight pullback to 54.7 in Dec from 55.2 in Nov which was just shy of 2016’s Jan highs. Whilst still in recovery from July’s post-Brexit lows the indicator has yet to break a longer-term trend of falling highs from its 62.5 peak in October 2013."

Also on the agenda: 

Trading update: Persimmon, Costain Group

AGM: Secure Property Development & Investment

Economics: challenger job cuts y/y (US), unemployment claims (US), retail PMI (EU), PPI m/m (EU), ECB monetary policy meeting accounts (EU)