And finally, the FTSE 100 index has closed at 7134 points, up 46 points or 0.65% today.

That’s its highest closing level since the end of February 2020, and near to the 15-month high set in May (7164 points).

For the week, the FTSE 100 rose around 0.9%, the best performance in five weeks.

Engineering turnaround group Melrose (+3%) led the risers, followed by asset manager Intermediate Capital (which posted strong results earlier this week).

Mining group Glencore gained 2.9%, while packaging firm Smurfit Kappa (+2.5%) and product testing firm Intertek (+2.3%) also picked up ground.

The more UK-focused FTSE 250 index also rose, gaining around 0.55% today, despite concerns that the reopening of the economy will be delayed beyond 21 June.

Sophie Griffiths of OANDA says:

The successful vaccination programme has helped the economy bounce back from its deepest contraction in 300 years last year. With households expected to splurge the savings amassed over that time, and businesses gearing up for additional investment, the outlook is certainly bright.

There is, of course, the complication of rising cases of Covid-19, which could delay the final stage of reopening. For now, a return to pre-Covid output in Q4 looks to be very much on track.

European markets also rallied, after the European Central Bank yesterday pressed on with its bond-purchase programme, despite signs of rising inflation and growth.

This pushed the Stoxx 600 index up 0.7% today to a new all-time high.

And on that note, goodnight and have a good weekend (and enjoy the football!).

Here’s today’s stories:

The government has announced that it will remove limits inherited from the EU on about half of the UK’s steel imports, in a move that provoked fury from British producers.

The Trade Remedies Authority (TRA) said on Friday that it would revoke the limits on nine categories of steel product, including some bars and wires, meaning imports will no longer face steep tariffs after quotas are filled. It extended limits for three years on another 10 products, including some steel for railways, gas pipes and large sheets.

The EU introduced the limits in 2019 to protect the industry from a glut of steel products diverted from the US after Donald Trump imposed tariffs.

The TRA is part of the Department for International Trade, run by Liz Truss. She has to sign off on the authority’s recommendations, but she is expected to accept them.

Gareth Stace, the director general the industry lobby group UK Steel, said the decision was a “hammer blow” and “utter madness” that would leave UK producers vulnerable to import surges.

“On their first major test in a post-Brexit trading environment, the UK’s new system has failed our domestic steel sector,”

Sterling is on track for its second consecutive weekly loss versus the dollar, despite this morning’s solid growth figures.

The pound has dropped by almost 0.5% today, to $1.411, with the row over the Northern Ireland protocol and concerns over rising Covid-19 cases weighing on the currency.

That leaves it down around half a cent for the week, and shy of the three-year high of $1.425 hit at the start of last week.

Mike Owens, Global Sales Trader at Saxo Markets, pointed out that industrial production was weaker than forecast:

“Although UK GDP registered strong growth, the numbers are nothing to shout about considering where we’ve come from.

As expected, the biggest contributions were consumer services that had previously been hampered by Covid-19 restrictions. Industrial production fell 1.3% Month-on-Month against an expected 1.2% gain although this will hopefully only be temporary. Sterling and UK equity markets have had a muted reaction to the figures and it’ll be a good result if the UK economy manages to grow to pre-pandemic size by the end of the year.”

Jane Foley, Head of FX Strategy at Rabobank pointed to the prospect of an extension to the current restrictions.

“UK GDP data release this morning, while strong, did not quite meet market expectations. Also, reports that the re-opening of the economy could be delayed beyond June 21 should limit enthusiasm for GBP versus the euro,”

US households have grown more optimistic about economic prospects - and less worried about inflation.

The University of Michigan’s preliminary consumer sentiment index has jumped to 86.4 in the first half of this month, from a final reading of 82.9 in May.

The survey’s gauge of consumer expectations rose to 83.8 from 78.8, suggesting people are more upbeat about growth and employment prospects.

The current economic conditions edged up to 90.6 from 89.4 in May.

Americans are also less anxious about inflation -- one-year inflation expectations fell to 4.0 from 4.6%, while its five-to-10-year inflation outlook dropped to 2.8% from 3.0% in May.

Last month, inflation worries pulled the index down - but this suggests that people may be concluding that rising prices will be transitory (as many central bankers suggest/hope).

Goldman Sachs has told its staff in the US that they must disclose their Covid-19 vaccination status before a planned return to office working next week.

The investment bank, whose 6,000 UK workers have separately been told they have the option of filling out their status anonymously to give the business an idea of vaccination levels, had previously told US staff that disclosing their inoculation status would be optional.

“Registering your vaccination status allows us to plan for a safer return to the office for all of our people as we continue to abide by local public health measures,” states the internal staff memo.

“As a result, it is mandatory that you submit your vaccination status. While we strongly encourage you to receive a Covid-19 vaccine, we understand that the choice to get vaccinated is a personal one.”

Staff have been told to log their status in the bank’s internal app, Canopy, with the company saying it could be shared with managers and used for planning.

A UK startup that makes flying taxis is to float on the New York stock exchange as Virgin Atlantic and American Airlines placed orders for as many as 1,000 of its prototype electric aircraft.

Vertical Aerospace, which is based in Bristol, said its electric vertical takeoff and landing aircraft (eVTOL) could be in service by 2024, once safety regulators certify it. Developers believe eVTOLs will transform urban transport, offering on-demand flights in and between cities more quietly, cheaply and safely than helicopters.

Vertical Aerospace said its VA-X4 model, priced at roughly $4m (£2.8m), is zero emissions and near silent, able to carry four passengers and a pilot more than 100 miles and travelling at more than 200mph.....

Stocks have opened slightly higher in New York, as investors continue to shrug off concerns that yesterday’s jump in US inflation.

• Dow Jones industrial average: up 54 points or 0.15% at 34,520 points
• S&P 500: up 3 points or 0.1% at 4,242 points
• Nasdaq Composite: up 15 points or 0.1% at 14,035 points

Goldman Sachs (+1%) are leading the Dow risers, followed by McDonalds (+0.95%).

Leading the fallers are Procter & Gamble (-0.85%) and construction machinery firm Caterpillar (-0.8%).

Traders seem relaxed that the CPI index hit a 13-year high of 5% in May, hoping that it will not prompt the US Federal Reserve to tighten monetary policy soon.

Rupert Murdoch has written down the value of The Sun newspapers to zero, after the Covid-19 pandemic hit sales and advertising, and the costs of the phone hacking scandal rose.

The Sun titles’ accounts were published on Friday, and show that turnover fell by over 20% in the year to June 2020, to £324m.

News Group Newspapers, which publishes the Sun and the Sun on Sunday, and The Sun Online, made a pre-tax loss of £201m for the year, compared with a £68m loss the previous year.

It says newsstand sales suffered from the drop in commuters during the lockdown, hurting circulation (although lifting online traffic), while advertising across print and online was affected by the general economic downturn.

The Sun lost its title as the UK’s best-selling newspaper to the Daily Mail in May 2020, after sales fell in the lockdown.

The group has also taken one-off operating charges totaling £164m in 2020.

That includes an £84m write-down on the value of The Sun brand. It also covers around £80m of legal costs in 2020, including £52.3m of damages and legal fees to claimants in civil cases “following the allegations of voicemail interception and inappropriate payments to public officials”.

In 2019, total legal charges amounted to £54m, including £26.7m of claimants’ legal fees and damages.

The FT says that Murdoch is acknowledging the tabloid brand that helped build his global media empire has become “a worthless asset”, explaining:

The grim medium-term outlook for the print revenues, which carried the business through its heyday, forced the company to write down the asset by £84m, an impairment that left The Sun brand with zero carrying value.

The estimate of The Sun’s asset value was based on the assumption that the titles, according to management estimates in the accounts, would not return to positive growth.

In another sign of economic recovery, global oil demand is now expected to surpass pre-Covid levels by end of 2022.

That’s according to the International Energy Agency’s latest report, which calls on the Opec+ group to increase production to meet next year’s demand -- despite the climate crisis.

After slumping by 8.6 million barrels per day in 2020, the IEA predicts a recovery this year and next -- with demand rising 5.4 mb/d in 2021 and a further 3.1 mb/d next year.

That will lift demand to 99.5m b/d next year, with the IEA predicting that by the end of 2022 it will “surpass the level of demand before the coronavirus crisis took hold”.

And this shows that the Opec oil group and their allies, such as Russia, must lift output, the agency argues.

Our first detailed look at 2022 balances confirms earlier expectations that OPEC+ needs to open the taps to keep the world oil markets adequately supplied.

Global oil demand will continue to recover and, in the absence of further policy changes, by end-2022 reach 100.6 mb/d.

Opec+ slashed production once the pandemic began to rebalance the market, and has been gradually unwinding these cuts. Earlier this month, it agreed to keep easing production curbs through July - and didn’t decide what to do beyond that.

The IEA says the issue of sanctions on Iran’s oil, which could be lifted if the nuclear deal with the US is revived, is an important factor:

The pace at which the OPEC+ cuts can be unwound will depend not only on the success in containing the spread of the virus and demand growth but also the timing of the eventual return of Iranian barrels to the market.

A hike in oil production would be a blow to efforts to curb fossil fuel use and carbon emissions, as Bloomberg’s Javier Blas tweets:

The IEA’s report today acknowledges that the jump in oil demand underlines “the enormous effort required to get on track to reach stated ambitions” on tackling the climate emergency.

Last month, the IEA declared that exploitation and development of new oil and gas fields must stop this year and no new coal-fired power stations can be built, if the world is to achieve net zero emissions by 2050.

Germany’s economy is on track for a strong recovery in the second half of this year, the country’s central bank said today.

In its new economic forecasts, the Bundesbank raised its growth and inflation forecasts for this year and the next. It predicts that the pandemic will be pushed back by a successful Covid-19 vaccination programme, meaning economic restrictions can be scaled back quickly.

This will lead to “substantial catch-up effects” in household spending and across services sectors hit hard by the lockdown. Families are expected to spend some of the money built up in the pandemic, pulling down the “unusually high” savings rate quickly

The Bundesbank now expects the German economy to reach pre-pandemic levels as soon as next quarter, growing by 3.7% this year, 5.2% next year and 1.7% in 2023.

Bundesbank President Jens Weidmann said:

“The German economy is overcoming the pandemic-related crisis.”

But, the report also warns of the possible risk that a Covid-19 mutation substantially reduces the effectiveness of the vaccines, which would be a major setback.

The longer it takes to overcome the pandemic worldwide, the greater the risk. In addition to weaker foreign demand, direct protective measures at home could then again affect the German economy.

The UK economy grew by 2.3% in April as the easing of Covid-19 lockdown measures fuelled a rebound in consumer spending, according to official figures, my colleague Richard Partington explains:

The Office for National Statistics (ONS) said GDP rose for the third consecutive month as pandemic restrictions were scaled back across all four nations of the UK, with the economy growing at the fastest pace since the July reopening from lockdown last year.

Retail sales grew sharply as non-essential shops reopened, alongside a pickup in bookings for caravan parks and holiday lets, and the reopening of hospitality venues outdoors lifted spending in pubs, bars and restaurants. Overall GDP grew by 1.5% in the three months to April compared with the previous three months.

Rishi Sunak, the chancellor, said the latest figures were “a promising sign that our economy is beginning to recover”.

The ONS said the annual rate of growth in April was 27.6%, demonstrating the difference from the worst month of the pandemic a year earlier, as the economy recovers from the biggest collapse in output for more than 300 years.

However, further ground remains to be recovered, with the economy still about 4% below its pre-pandemic level as concerns mount over the fallout from rising Covid infections fuelled by the Delta variant, first detected in India.

UK goods exports to the European Union rose slightly in April, but remain well below their levels before Brexit.

Total exports of goods fell by 0.6% month-on-month in April 2021 after two consecutive months of growth, today’s trade data shows.

It was driven by a 2.9% month-on-month decrease in UK exports to non-EU countries, partly offset by a 2.3% increase in exports to the EU, the ONS reports.

Falling exports of goods to non-EU countries were driven by cars, while increasing exports to the EU were driven by iron and steel.

This increase may show that some exporters are getting to grips with the new challenges of exporting to the EU, from red tape and paperwork to checks at the borders.

But Samuel Tombs, chief UK economist at Pantheon Macroeconomics, says Brexit is still hurting trade:

The latest trade figures show that Brexit has continued to impede exports to the EU, albeit slightly less than in previous months now that traders are adapting to the new rules.

The value of exports to the E.U. rose by 2.3% month-to-month in April, but they were still 9.0% below 2019’s average level. That is a disappointing performance, given the boom in global trade flows; U.K. exporters have lost market share.

On the import side, imports of goods from non-EU countries hit its highest level since records began in January 1997, with a “slightly weaker increase” in imports from EU countries.

Thomas Pugh of Capital Economics says trade flows are still well below pre-crisis levels and trade with the EU remains “especially depressed”.

Exports values to the EU excluding erratics were 5.7% below their December level, while imports were a whopping 19.1% below. In contrast, imports from non-EU countries are up by 4.9% compared to December and exports are down by just 1.3%.

The London stock market is rallying this morning, pushing the blue-chip FTSE 100 to a one-month high.

The FTSE 100 has gained 44 points, or 0.6%, to 7132 points.

That’s its highest since 10th May, when it touched its highest level since the pandemic began:

UK companies are among the risers, with housebuilder Taylor Wimpey and Primark owner AB Foods both up 1.8%, and manufacturing business Melrose up 2%.

Multinationals are also rallying, such as safety equipment maker Halma (+2.7%) and packaging firm Smurfit Kappa (+2%).

Rupert Thompson, Chief Investment Officer at Kingswood, says today’s GDP report has fuelled hopes of a fast recovery.

“UK GDP posted a large gain in April for the second month running, growing 2.3% m/m in line with expectations. This left GDP up a massive 27.6% up from its low point last April but still down 3.7% on its pre-pandemic level in February 2020.

Today’s data confirm a rapid recovery in the UK is well underway and will fuel hopes that the economy will in a few months’ time have recovered all of its pandemic-related losses.

There’s also relief in the City that yesterday’s jump in US inflation to 5%, a 13-year high, didn’t puncture Wall Street’s rally.

There’s some good detail in the GDP report showing how parts of the service sector revived in April as restrictions were lifted.

For example:

• Accommodation service activities grew by 68.6% as caravan parks and holiday lets picked up, once self-contained accommodation was allowed again in England.
  
  
• Food and beverage service activities grew by 39.0% as pubs, restaurants and cafes could serve customers in outdoor seating areas.
  
  
• Other personal service activities (including hairdressing) grew by 63.5% in April 2021, as hairdressing re-opened in England on 12 April.

Chancellor of the Exchequer Rishi Sunak says:

“Today’s figures are a promising sign that our economy is beginning to recover.

“With more than a million people coming off furlough across March and April and the number of employees in work rising, it is clear that our Plan for Jobs is working.

“But I know there are people who still need our support, which is why the furlough scheme is in place until September to protect as many jobs as possible, and schemes like Kickstart will continue to create jobs for young people, as we look to build the economy of the future.”

The UK’s service sector drove growth in April, with output rising by 3.4%, partly due to the reopening of consumer facing business during during the month.

But manufacturing output fell by 0.3%, while construction saw a 2% drop in output.

The Office for National Statistics says:

• The service sector grew by 3.4% in April 2021, with consumer-facing services re-opening in line with the easing of coronavirus restrictions and more pupils returning to onsite lessons.
  
  
• Output in the production sector fell by 1.3% in April 2021, the first fall since January 2021 as three of the four sectors contracted.
  
  
• Within production, mining and quarrying output contracted sharply, by 15.0%, in April 2021 because of planned temporary closures for maintenance of oil field production sites.
  
  
• The construction sector contracted by 2.0% in April 2021 following a strong March, with new work slowing down faster than repair and maintenance.

Newsflash: The UK economy grew by 2.3% in April - the fastest monthly growth since July 2020.

The easing of economic restrictions boosted output, due to the reopening of shops and hospitality companies during the month.

It’s also slightly faster than expected, and follows strong growth of 2.1% in March.

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

Today we learn how the UK performed in April as parts of the economy reopened as the lockdown was eased.

Economists predict a surge in growth, with GDP forecast to rise around 2.2% in April, the month in which non-essential shops reopened, pubs began serving outside again, and gyms and leisure centres resumed.

That would put the UK on track to return to growth this quarter, after contracting in the first three months of 2021 during the current Covid-19 lockdown.

Hopes are high for a strong 2021, after 2020 saw the worst downturn in around 300 years. The data is due shortly.. (7am UK time).

Michael Hewson of CMC Markets sets the scene:

The main focus today is on the UK economy in the wake of this week’s comments from outgoing Bank of England chief economist Andrew Haldane who said that the economic rebound was going “gangbusters”, and that the Bank of England needs to start looking at turning off the stimulus tap.

This morning’s latest economic data could well add extra fuel to that argument.

The UK is on track for a strong recovery in Q2, Hewson adds:

During the first quarter the economy contracted -1.5%, however with the further easing of restrictions on April 12^th optimism is high that April GDP is likely to see another decent monthly expansion, as Q2 gets off to a flier, with a 2.4% expansion expected, and top of the 2.1% in March. The strong PMI numbers in April further supports this view, with May expected to be equally as strong.

With the further relaxation of restrictions that were announced in April, optimism is rising that the decent performance that we’ve seen in the manufacturing sector over the last three months can be sustained into Q2.

The financial markets look calm, after yesterday’s jump in US consumer price inflation to 5%, the highest since 2008.

Despite core inflation hitting its highest since 1992, investors seem confident that this won’t prompt central bankers to end their easy monetary policy yet.

The agenda

• 7am BST: UK GDP and trade figures for April
• 9am BST: IEA oil market report
• 2pm BST: NIESR thinktank publishes estimate of UK GDP in May