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Investment market update

Early Trading

UK stocks are expected to open slightly higher this morning ahead of the Chancellor’s Autumn statement which is due later today.

World Markets

Asian stocks retreated and gold extended gains, as a stand-off between Turkey and Russia over the downing of a warplane near Syria added to geopolitical tensions.

US stocks erased early losses as energy shares rallied for their first back-to-back gains in three weeks.

UK stocks fell for a second day, led by airline stocks, after Turkey downed a Russian jet on the Syrian border. EasyJet Plc fell 3.2% after Credit Suisse Group AG removed the airline from its “Top Outperform” list. British Airways parent IAG SA fell 3.3%.

Headlines

George Osborne is to set out government spending plans up to 2020 later, which will include billions of pounds in cuts but also new money for housebuilding. The Autumn Statement and Spending Review is expected to detail £20bn of cuts to Whitehall budgets and £12bn to welfare.

US economic growth for the third quarter has been revised up, helped by stronger investment and house building. The Commerce Department said gross domestic product rose at an annual pace of 2.1%, not the 1.5% rate it reported last month. Consumer spending was revised down slightly, although this was offset by growth in other economic areas.

Bank of England governor Mark Carney has said that UK interest rates are likely to remain low ‘for some time’. His comments came as he spoke to MPs on the Treasury Committee. UK rates have been held at 0.5% since March 2009. Most economists are not expecting the Bank to raise rates until mid-2016 at the earliest.

Rolls-Royce’s chief executive has said the company will be more transparent about the risks it faces and will cut up to £200m of costs a year. Warren East said the engineering group had developed an ‘accounting fog’ which had left investors unclear about the direction it was going. He said investor confidence “was not in a good place’, and the company must make shareholder returns a priority.

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