Finally, here’s my colleague Philip Inman on today’s ECB meeting:

Mario Draghi, the outgoing president of the European Central Bank, has warned that slowing global growth and Brexit uncertainty pose a risk to growth in the eurozone economy amid concerns that Germany remains on the brink of recession.

Speaking in Frankfurt after his final ECB policy meeting before stepping down, Draghi said the ECB was concerned that the economy of the 19-member currency bloc, which has slowed this year along with much of the global economy, faced “protracted weakness” going into 2020.

With consumer and business confidence low and trade with the US hit by Donald Trump’s latest raft of import tariffs, risks were all “to the downside”, said the Italian economist, who will be succeeded on 1 November by former International Monetary Fund head Christine Lagarde.

He said: “The incoming data since the last governing council meeting in early September confirm our previous assessment of a protracted weakness in the euro area growth dynamics, the persistence of prominent downside risk and muted inflation pressure

More here:

Goodnight!GW

Mario Draghi has used his final appearance as Europe’s top central banker to warn that the eurozone economy remains weak.

Sounding like a man spying clouds on the horizon, he declared:

The risks surrounding the euro area growth outlook remain on the downside.

In particular, these risks pertain to the prolonged presence of uncertainties related to geopolitical factors, rising protectionism, and vulnerabilities in emerging markets.”

The incoming data since the last Governing Council meeting in early September confirm our previous assessment of a protracted weakness in the euro area growth dynamics, the persistence of prominent downside risk, and muted inflation pressures.”

He also cited Brexit as a key geopolitical risk, even though a hard Brexit currently looks less likely:

One has the sense that somehow the lower likelihood of a hard Brexit or a cliff edge has improved the overall situation. On the other, the uncertainty is still there.

As he’s done so many times, Draghi warned that the eurozone needs to be strengthened -- with increased government spending where possible, and a stronger “fiscal capability”.

Draghi also conducted a staunch defence of his legacy, insisting that the unorthodox monetary policy pushed through on his watch had worked.

He cited to the fall in bond yields in Greece as proof, while acknowledging the policies were unpopular in Germany.

And while he won’t reveal his next move (the presidency of Italy must come up eventually...), he apparently won’t be joining social media. Shame really.

Q: You are credited with saving the euro with three words....but your policies are criticised across the region. One day, a country may decide that the euro is not irreversible ....

Should you have done more to reach out to the public? And will Italy ever fix itself?

Things have changed completely in Italy in recent years, Draghi replies. Everyone there agrees that the euro is irreversible.

[Draghi must be thinking of Matteo Salvini, the right-wing politician who dropped his support for Italy leaving the euro last week]

And on the broader point, Draghi says more can and should be done to reach out to the public. However, it’s hard across 19 countries, and it’s tricky to change your language for a different audience.

Draghi insists that central bankers can’t get away with opaque language, declaring

No-one would ever say ‘if you understood me, you were stupid’. We all try to be transparent today.

[That’s a reference to Alan Greenspan’s notorious comment that “If I seem unduly clear to you, you must have misunderstood what I said”]

And that’s it. Draghi’s final press conference is over.

Well, he has given us a lot to write about over the years.....

Q: What future plans do you have?

You’ll have to ask my wife, says Draghi.

Q: Any message for your German critics - and are you leaving the pickelhaube (spiked helmet) you were given by a newspaper?

Draghi cites the German maxim “Geschenk ist Geschenk” (a gift is a gift), meaning he’ll take the spiky helmet with him.

My only message to Germany is that we always tried to deliver on our mandate.

Q: But should you have done more to assuage your German critics; should Christine Lagarde learn from this?

Draghi manages to forget the question, as he’s got nothing to say on the matter.

Here’s an old photo of the pickelhaube:

Draghi says that the risk of a hard Brexit has reduced.

The lowered danger of a no-deal crisis has “improved the overall situation”, he says, although the uncertainty still remains.

The “medium-term situation” is still being considered with concern.

Mario Draghi has arrived for his final press conference as ECB president. You can watch it live here.

It’s nearly time for Mario Draghi’s last press conference as head of the European Central Bank, after an eventful eight year stint.

Kit Juckes of Societe Generale says Draghi certainly did it ‘his way’. But the job of reviving the eurozone economy is not finished.

He arrived to recession and ballooning peripheral spreads. He delivered a de facto guarantee to the Eurozone bond markets that dismayed some of his colleagues but which has removed one major structural failing of the single currency system. He revived growth without reviving inflation much, delivering an average of 1.2% real GDP growth and 1.2% CPI inflation over the course of his term. Saving the bond market sent the currency on a tear, which helped drag inflation down, and persuaded him to embark on monetary policies which caused even more friction. His only big mistake however, may have been to prematurely declare victory in 2017 and promise to taper bond purchases. The currency soared, growth slowed and inflation turned back down.

He leaves with the job of reviving the economy unfinished, and as he hands over the monetary baton to Christine Lagarde she might as well use it to beat up finance ministers and campaign for Europe’s fiscal ‘rules’ to be thrown into the Rhine. If she can do that, the euro will recover; if she can’t, it is likely to struggle, rising against the dollar only when that falls across the board.

Nick Wall of Merian Global Investors agrees that Lagarde will have lots to do:

Draghi’s now famous “whatever it takes” moment saved the Eurozone by finally allowing the ECB to become a credible lender of last resort, a key facet for any central bank. Sovereign spreads have converged ever since, allowing for the odd political wobble, with Draghi’s ECB loaning money to banks, buying up sovereign and corporate debt, and taking interest rates below zero.

The inflation objective during his tenure has not been met, perhaps a near-impossible task given the scale of deleveraging in the Eurozone and challenging demographic trends. But his legacy is the survival of the euro during its toughest test to-date using methods that were previously anathema to a central bank steeped in the traditions of the Bundesbank.

The baton now passes to the venerable Christine Lagarde who faces a different set of challenges. An open economy like the Eurozone is highly exposed to the vagaries of global trade and political instability – the European growth model of high savings is dead in a trade war. Europe can no longer afford for the ECB to remain “the only game in town” without risking recession, so Lagarde’s task will be to encourage governments to take a more active fiscal policy stance to increase domestic demand. With investors willing to lend to governments, whether its Germany or Greece, at negative interest rates, it should be achievable – but it will represent a sea change for many European governments, requiring all of Lagarde’s political acumen.

Neil MacKinnon of VTB Capital is concerned that the ECB Governing Council is split over the future direction of monetary policy.

The split has cast a cloud over Mario Draghi’s legacy.

“Whatever it takes” can no longer be the ECBs modus operandi under Christine Lagarde. ECB hawks are concerned that a further drift into negative rate territory would hasten “Japanification” while a significant expansion in the ECB’s balance sheet is the road to debt monetisation. In the interim, the German economic slump is dragging the rest of the eurozone into recession and disinflation.

It will be less about what monetary policy can do so negative rates will gradually come off the agenda, the emphasis will be more on bank restructuring and recapitalization...balance sheet expansion will become more gradual with more of an emphasis on fiscal expansion.”

Newsflash: Mario Draghi has signed off his final meeting as ECB president, by leaving interest rates at all-time lows.

That means the benchmark borrowing rate remains at zero, while banks will face negative interest rates of -0.5% for leaving cash at the ECB rather than lending it.

The ECB also warns that rates may not rise for some time:

The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.

Newsflash: Social network Twitter has missed revenue and earnings forecasts, sending its stock sliding in pre-market trading.

Twitter has reported that its revenue rose 9% from a year earlier to $824 million, missing Wall Street expectations of $874 million.

Net income also shrank too, coming in at $37 compared with adjusted net income of $106m a year ago.

Twitter has blamed “revenue product issues” -- technical problems that messed up its advertising services. It also pointed to “greater-than-expected seasonality” -- apparently there were fewer big events to tweet about than last summer....

Twitter grew its base of “average monetizable daily active usage” was 145 million, compared to 124 million a year ago. The challenge, though, seems to be actually monetizing them!

In a blow to investors, Twitter has also trimmed its revenue forecasts in the light of recent problems. That’s disappointed Wall Street, sending shares down 12% in pre-market.

Jack Dorsey, Twitter’s CEO, says the company is doing a good job cleaning up its service from trolls and other malign forces:

“We also continue to make progress on health, improving our ability to proactively identify and remove abusive content, with more than 50% of the Tweets removed for abusive content in Q3 taken down without a bystander or first person report.”

Here’s our news story on this morning’s poor PMI data:

New groundbreaking analysis released today has shown how corrupt super-wealthy people are funnelling dirty cash into the UK.

Transparency International UK has analysed more than 400 money laundering and corruption cases. It uncovers how ultra-expensive homes, expensive cars and jets, luxury goods, and private school fees are being paid for with ill-gotten gains.

Nearly 600 UK businesses and organisations have received suspect funds, from schools and universities to architects and interior design firms -- either knowingly or unknowingly.

Daniel Bruce, their CEO, says “a range of rogues including former presidents, prime ministers and senior public officials who have been caught with their fingers in the till” are taking advantage of the UK establishment.

My colleague Rupert Neate has read the report, and explains:

Research by Transparency International, an anti-corruption campaign group, found more than £300bn of suspect funds have been funnelled through the UK banks, law firms and accountants before being spent on a £1m Cartier diamond ring, masterpiece art works from Sotheby’s, and a £50,000 Tom Ford crocodile-skin jacket with matching crocodile-skin handbag from Harrods.

The suspect cash – which often comes from corrupt officials’ embezzlement of hundreds of millions of pounds from poor countries’ state coffers – was also found to have been spent on a £200,000 Bentley Bentayga driven by the 22-year-old son of the former prime minister of Moldova. His father, Vlad Filat, had been sentenced to nine years in prison for his role in the “theft of the century”.

Here’s his story:

Here’s the full report: AT YOUR SERVICE

The decline in Germany’s private sector has alarmed economists, who fear that Europe’s largest economy is weakening.

Katharina Utermöhl of Allianz fears that Germany will be at risk of recession in 2020 (it may have already entered one this summer).

Here’s her take on Germany’s composite PMI coming in at just 48.6, showing a contraction:

The subdued outlook for global trade and the car industry as well as lingering elevated political uncertainty surrounding trade and Brexit are still weighing too heavily on Germany’s industry. The renewed decline in new export orders suggests that external headwinds will continue to persist in the coming months.

In addition, there are increasing signs that the pronounced industrial weakness is spreading to other sectors of the German economy.

Macroeonomist Hadrien Camatte fears that the problems in Germany’s factory sector have now spread to the broader economy:

Oliver Rakau of Oxford Economics says Germany is being overhauled by France, where growth is strengthening.

Today’s weak PMI surveys suggest the eurozone economy only grew by 0.1% in July-September, says Chris Williamson, chief business economist at IHS Markit.

That would be even weaker than the 0.2% growth recorded in April-June- well below long-term trends.

Williamson explains that Brexit worries, the US-China trade war, and the global slowdown are all hurting eurozone companies:

“The eurozone economy started the fourth quarter mired close to stagnation, with the flash PMI pointing to a quarterly GDP growth rate of just under 0.1%.

“The manufacturing downturn remains the fiercest since 2012, and continues to infect the service sector, where October saw the smallest increase in new work for almost five years.

“The labour market is meanwhile being hit as firms retrench amid signs of excess capacity and uncertainty about the year ahead intensifies. Optimism about future prospects deteriorated further in October to the lowest for over six years, commonly linked to global trade tensions, Brexit- related worries and increasingly gloomy economic forecasts.

“A further deterioration in jobs growth adds to the risk that the trade-led weakening is spreading further to the household sector, which could dampen growth further as we head towards the end of the year.

“The survey indicates that Mario Draghi’s tenure at the helm of the ECB ends on a note of near-stalled GDP, slower jobs growth, near-stagnant prices and growing pessimism about the outlook, piling pressure on Christine Lagarde to drive new solutions to the eurozone’s renewed malaise.”

Newsflash: The Eurozone economy is close to stagnation, casting a shadow over Mario Draghi’s final performance as ECB president today.

Demand for goods and services is falling this month, for the second successive month, according to the latest flash PMI data for the region.

The euro area service sector managed some growth, but manufacturing output suffered another decline.

This is partly due to the slump in Germany (which we covered earlier). France is doing better, but the rest of the region stalled, says data firm IHS Markit.

It explains:

The Eurozone economy remained close to stagnation at the start of the fourth quarter, according to the latest flash PMI data, with demand for goods and services falling for a second successive month.

This has left Markit’s flash Eurozone PMI Composite Output Index at 50.2 -- barely above the cut-off point between growth and contraction. It was 50.1 in September.

The eurozone services PMI rose to 51.8, from 51.6, which is one of the weakest expansions seen since 2014.

The manufacturing PMI was unchanged at 45.7, showing a steep decline in output.

In further gloom, companies’ future expectations sank to the gloomiest since 2013 and jobs growth hit the lowest since 2014.

More to follow....

Bloomberg have produced this excellent thread showing Mario Draghi’s legacy - where he did well (holding the euro together) and where he fell short:

Boom! Germany’s stock index has hit its highest level since June 2018, as markets rally across Europe.

The Stoxx 50 index of Europe’s largest companies has reached its highest level since January 2018.

Traders are still waiting for a Brexit breakthrough, says Craig Erlam of trading firm OANDA.

Brexit limbo continues on Thursday as the UK awaits judgement from Brussels on its extension request, one week before the country is due to leave the European Union. The EU will be in no rush to make a decision and may even be awaiting more details on how Parliament intends to make use of the time before doing so. There’s little chance of it rejecting the request but how long it offers needs to be determined.

The pound has rallied a little this morning on the back of claims that Labour has offered a “pragmatic path” to a Brexit deal with a compromise on the timetable. The details of this are still lacking and the terms will probably not be acceptable to the Prime Minister but in reality, it’s not that important. An extension will be signed off, at which point we’re probably heading for an election. We are starting to see the light at the end of the tunnel.

Bad news! Germany’s private sector companies are slashing jobs as output and activity continues to shrink.

Data firm Markit’s healthcheck shows that employment at German firms is falling for the first time in six years this month. Growth across the service sector slowed, while factories are suffering another contraction:

Here’s the details (any reading below 50 shows contraction)

• Flash Germany PMI Composite Output Index: 48.6 (Sep: 48.5). 2-month high.
• Flash Germany Services PMI Activity Index: 51.2 (Sep: 51.4). 37-month low.
• Flash Germany Manufacturing PMI: 41.9 (Sep: 41.7). 2-month high.
• Flash Germany Manufacturing Output Index:t 43.6 (Sep: 43.0). 2-month high

Such weak figures will fuel concerns that Germany is in recession, given the PMIs often correlate closely with GDP.

Phil Smith, Principal Economist at IHS Markit said:

“Hopes of a return to growth in Germany in the final quarter have been somewhat dashed by the October flash PMI numbers, which show business activity in the eurozone’s largest economy contracting further and underlying demand continuing to soften.

“Manufacturing remains the main weak link, though here there are some signs of encouragement with rates of decline in production and new orders easing and business confidence improving to a four-month high.

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

The man who saved the euro is leaving the building. After eight years as president of the European Central Bank, Mario Draghi is chairing his final governing council meeting today - before handing over to Christine Lagarde at the end of the month.

And what an eight years it’s been. Draghi arrived just as the eurozone crisis was fully aflame. Greece, Ireland and Portugal had already lost the confidence of the markets and been bailed out, and Spain and Italy were feeling the heat too.

He immediately slashed interest rates (reversing a frankly baffling hike by his predecessor), and went on to unleash his famous bazooka -- buying up government bonds to keep eurozone yields away from the danger zone.

Indeed, Draghi’s pledge to do “whatever it takes” in July 2012 went a huge way towards shoring up support for the euro, at a time when Grexit fears were haunting the markets.

And when the eurozone economy stumbled in 2015, Draghi hit back with a massive bond-buying quantitative easing scheme -- defying doubters who claimed a huge money-printing spree would violate the Bank’s mandate.

Few central bankers have had such a dramatic tenure, and even fewer can say they rescued a currency.

But Draghi isn’t without critics. The ECB clashed with Greece’s anti-austerity Syriza party through the wild days of 2015, after refusing to support its debt swap plan. It eventually froze the emergency funding keeping Greek banks afloat, triggering the imposition of capital controls.

Germans aren’t happy with Draghi either, after seeing savings rates shrivel thanks to the ECB’s current policy of negative interest rates. One newspaper even compared him to Dracula, for sucking their savings away.

Mario Draghi usually bats such criticism aside, pointing out that savers wouldn’t be happy if banks failed or we plunged into a depression.

But the real problem, as Draghi clears out his locker, is that the eurozone economy still looks weak, with lacklustre growth and inflation still below target.

Only last month the ECB outlined a new stimulus plan - another attempt to spur activity. But several governing council members pushed back against the plan, suggesting Lagarde won’t have an easy task either.

That will be reinforced by PMI surveys due this morning, which will show that private sector companies are struggling, with manufacturing continuing to shrink. The euro may be intact, but the eurozone is struggling.

The agenda

• 9am BST: Eurozone ‘flash’ PMI surveys for October
• 12.45pm BST: ECB decision on monetary policy
• 1.30pm BST: ECB president Mario Draghi’s press conference