An independent report has slammed the “poor culture” at Persimmon, one of the UK’s biggest housebuilders, which has come under heavy criticism for its shoddy workmanship and paying a £75m bonus to its former chief executive last year. In particular, the report highlighted the firm’s failure to install properly cavity barriers at its timber-framed houses, a key fire safety measure.

The review, led by Stephanie Barwise QC of law firm Atkin Chambers, called on the company to reconsider its purpose and ambition, and to fundamentally change its culture. Persimmon commissioned the review in April and took other steps to rebuild its tarnished reputation. Its last annual profit topped £1bn, the biggest ever made by a UK housebuilder, and a big chunk of it was related to the taxpayer-funded help-to-buy scheme.

The report said Persimmon’s issue with “missing or improperly fitted cavity barriers is a systemic nationwide problem, which is a manifestation of poor culture coupled with the lack of a group build process”.

The barriers are designed to stop fire spreading. Persimmon said it had checked 16,000 homes and fixed the majority of those affected, and is inspecting more than 500 homes a week. Two-fifths of the houses it builds every year are timber frame.

Persimmon said it was taking the issue very seriously and had taken “extensive action,” after discovering failings at various stages in the installation of cavity barriers at some properties. There has been inadequate supervision by the company and the approved building control inspector, NHBC, it said. Persimmon appointed fire engineering firm Arup in November to assess any further steps it should take.

Over here, the FTSE 100 is trading some 16 points lower at 7,502.51, a 0.22% fall. Germany’s Dax has lost 0.57% and France’s CAC is down 0.25% while Italy’s FTSE MiB has bucked the negative trend with a 0.7% rise.

The opening bell has rung on Wall Street. Stocks are largely flat, as expected, staying close to yesterday’s record closing levels.

• Dow Jones down 8.39 points, or 0.03%, at 28,227.50
• S&P 500 up 3.65 points, or 0.1%, at 3,195.1
• Nasdaq up 15.49 points, or 0.18%, at 8,827.72

The pound is still trading down 1.4% against the dollar, at $1.3147 – signalling that the ‘Boris Bounce’ is over. Investors are back to worrying that Britain will fail to agree a new trade deal with the EU by the end of next year.

Looking ahead to the Wall Street open, stocks are expected to open close to yesterday’s record closing levels. Boeing, however, is set for its worst open since August after the US aircraft maker decided to halt production of its grounded 737 Max plane.

Back to the US, which has released more data, this time on industrial production. Output from manufacturers, miners and utilities rose 1.1% in November, which was better than expected, and a strong bounceback from October’s decline of 0.9%.

Manufacturing alone also posted 1.1% growth, following a 0.7% drop in October.

Sadly, another UK retailer has gone into administration, just a week before Christmas. The online and pop-up bookseller The Book People appointed administrators at PricewaterhouseCoopers, putting almost 400 jobs at risk.

At least, there will be no immediate job losses, according to the administrators, who also promised that Christmas orders already placed by customers will be fulfilled. PwC are now looking for a buyer of the business.

My colleague Sarah Butler writes:

The business makes 70% of its sales online, delivered from its warehouse in Bangor, Wales, and is thought to have suffered from heavy competition from Amazon. It also sells direct to schools and businesses, with pop-up shops in workplaces.

It recently launched the Big Book Boost programme, which aimed to donate more than a million books to schools by 2022.

Toby Underwood, joint administrator and a partner at PwC, said The Book People would continue to trade and no immediate redundancies were envisaged as a rapid sale of the business was explored.

He also said that the US needed to reduce its trade gap with Europe to get its global trade deficit down, and that it must find ways to sell more goods to the EU.

The US trade representative, Robert Lighthizer, has given an interview to Fox Business Network. He said that a trade between the US and the UK is a priority for Washington and negotiations will be launched soon.

For sure, the UK is a priority. As soon as they get their objectives agreed to, we’ll start talking.

The US housing market is benefiting from low mortgage rates, and is propping up the wider economy. Construction of single-family houses – the largest share of the housing market – rose 2.4% to 938,000 units, the highest level since January. The number of multi-family homes started jumped 4.9% to 427,000.

Here is more reaction to the poor factory numbers from the CBI. Howard Archer, chief economic adviser to the EY Item Club forecasting group, says:

There is little in the December industrial trends survey to inspire hopes that the new year will bring better times for the UK manufacturing sector after what looks to have been a very difficult fourth quarter.

However, the hope for manufacturers is that reduced uncertainties following the decisive General Election result and the UK now leaving the EU with Boris Johnson’s deal on 31 January will encourage businesses to invest more and lift consumer willingness to buy big-ticket items.

However, significant Brexit uncertainties remain which, along with a challenging global environment may limit the upside for investment in 2020. Consumers may also face less favourable fundamentals due to a softer labour market and reduced earnings growth.

Fawad Razaqzada, market analyst at Forex.com, says he pound was hit by a double whammy of bad news this morning.

First and foremost, it was reports that the UK government will block the EU transition extension beyond 2020, raising concerns that this could potentially result in a hard Brexit. Then, the latest wages data came in below expectations while unemployment claims grew more than anticipated.

As a result, the GBP/USD further extended its post-election losses to hit a low so far of 1.3156. But at the time of writing, the cable was coming off its worst levels as the buyers attempted to defend a key short-term support level around 1.3180.

And here’s the result:

Here’s our news story on today’s UK jobs report:

Today’s dire UK factory data haven’t helped the pound - it’s still wallowing around $1.32, down a cent this morning.

Deutsche Bank has warned its clients that the pound is likely to weaken in 2020, as renewed Brexit uncertainty threaten to drag the economy into a recession.

UK manufacturers are crying out for some economic certainty, says Anna Leach, the CBI’s deputy chief economist.

Here’s her take on this morning’s worrying factory data:

“With manufacturers reporting that output is declining at a pace not seen since the financial crisis, alongside another month of softer order books, it is crucially important to rebuild business confidence in this sector.

“After three years of gridlock, the Prime Minister now has a clear mandate to govern. Businesses across the UK will want him to break the cycle of uncertainty. Firms will be looking for reassurance of the new Government’s commitment to getting the UK economy fighting fit as it prepares to exit the EU.”

The slump in UK factory output this autumn is due to Brexit worries, and weakness in the global economy, says Tom Crotty of chemicals giant INEO.

“These disappointing figures are reflective of the widespread weakness in the global manufacturing sector and the impact of continued Brexit uncertainty in the run-up to the General Election.

“Following the General Election, manufacturers will be eager to see the Prime Minister break the cycle of Brexit uncertainty as a priority. There is also a fresh opportunity for the sector to work with the government to solve long-term challenges such as raising productivity, addressing skills shortages, improving sustainability and tackling climate change.”

UK businesses need to pay attention to Boris Johnson’s Brexit strategy, and keep preparing for a no-deal crisis at the end of next year.

So says Paul Hardy, Brexit director at global law firm DLA Piper:

“Cementing the end of the transition in legislation is a game-changer. It shows this is not a negotiating tactic.

Businesses must now expect a limited trade deal in goods with the EU on 1 January 2021, but not in services; or the possibility of no deal at all. They should keep their no-deal Brexit planning warm: it may well come in useful in a year.”

Shares in UK-focused companies are sliding further into the red, wiping out some of the gains recorded on Friday.

Banks are in the front-line, on fears that a new cliff-edge Brexit crisis will weaken the economy in 2020. That’s driven Royal Bank of Scotland down by 4% -- a blow to the government, which still owns a majority stake.

Property companies, which are also vulnerable to economic worries, are also among the top fallers on the FTSE 100 this morning. British Land, which owns Meadowhall shopping centre in Sheffield and built the Cheesegrater in London, is down 3.5%.

Sterling’s slump today is a timely reminder that Brexit is far from over, despite Boris Johnson’s election claims that he would get it “done” and move onto other issues.

Dean Turner, economist at UBS Wealth Management, has warned that sterling will remain highly volatile over the next few months, with a crucial deadline falling in the summer.

“The pound’s latest slide is symptomatic of the fact that Brexit is a way off being “done”, and will remain important for sterling over the coming months.

“Despite the Prime Minister’s new-found majority spurring a relief rally, gains were always likely to be capped as investors turned their attention to phase two of the talks. The deadline for extending the UK’s transition period beyond the end of next year comes on 1 July. The risk of the UK reverting to trading with the EU on WTO terms could still drive larger GBP moves, particularly given the latest noises coming out of Downing Street.

“We expect a trading range between 1.30 and 1.40 until June.”

There’s a real gender split in today’s unemployment report.

The number of employed men jumped by 54,000 on the quarter to 17.31m, while the number of employed women fell by 30,000 to 15.49m. That reverses a recent trend, which has seen more women entering the labour market (partly due to pension changes).

If you include bonuses, UK pay growth also took a hit last month.

Total pay only rise by 3.2% per year in the August-October period, down from 3.7% a month ago, today’s labour market report shows.

That’s partly because some workers received bigger bonuses in October 2018 than this year.

Kit Juckes, foreign exchange analyst at Société Générale, says Johnson’s tough line on the post-Brexit trade talks has caught the markets by surprise.

The news that UK PM Johnson plans to rule out (legally) any extension to the transition period after the UK leaves the EU has given sterling a kicking this morning.

Those who thought that a big majority would free the PM to take a patient approach to negotiate the best possible deal, have been caught by surprise. And that’s most UK economists and strategists. Ho hum.

Britain’s FTSE 250 index of medium-sized listed companies is also suffering a bout of Brexit blues.

The FTSE 250, seen as a barometer of the UK economy,has shed 1.25% or 272 points to 21582.

Financial stocks such as Virgin Money (-4%) are among the fallers, along with housebuilder Crest Nicholson (-5%).

Michael Hewson of CMC Markets says:

In essence all of the big gainers of the past few days are giving back some of their gains as the reality check of the possibility of a no deal Brexit, while still over a year away, has tempered some of the enthusiasm from last Thursday’s election result.

The FTSE 100, though, is flat this morning as multinational companies are getting a boost from the weak pound (it makes their overseas earnings more valuable).

Some City investors had thought that Boris Johnson would ‘pivot’ to the centre ground now he has a solid majority in parliament.

The plan for a new cliff-edge Brexit deadline in a year’s time has dashed those hopes.

Neil Wilson of Markets.com writes:

Sterling tripped over its heels as Boris Johnson is looking to legislate for Britain to leave the EU fully in Dec 2020 with or without a trade deal. That means no possible way to extend the transition period. I must confess to believing he wouldn’t need to be so drastic, that a large majority offered the flexibility yet strength a government craves in deal making.

This sets up another cliff-edge and could create yet more months of uncertainty for investors just when we thought all was squared away.

Faisal Islam of the BBC says there’s a growing chance that Britain will be trading on WTO terms with the EU in just over year:

The selloff is gathering pace! Sterling is now down more than a cent against the US dollar at $1.322.

Boris Johnson’s plan to outlaw extending the Brexit withdrawal period beyond December 2020 risks a new no-deal split with the EU, warns Bloomberg.

They point out that previous trade deals have taken rather longer than 11 months.

The U.K. prime minister wants to deliver his election promise to ratify a new free-trade agreement with the bloc before the bridging period maintaining the status quo runs out on Dec. 31, 2020.

EU leaders have warned it’s highly unlikely that negotiators will be able to complete the kind of deal Johnson wants, which he’s modeled on Canada’s agreement with the EU, in the 11 months between Brexit day Jan. 31 and the December deadline. The EU-Canada deal took seven years to finalize.

The pound has now lost much of its post-election surge, having briefly spiked over $1.35 in the early hours of Friday morning.