That’s all for today - here’s the main stories:

The Opec cartel and its allies have agreed to pump more barrels oil from January, but left the door open to putting the brakes on should the Omicron variant lead to further restrictions on travel and trade.

The global price of crude fell briefly to $66 per barrel, its lowest level since mid-August, after ministers from some the world’s biggest oil producing countries agreed to go ahead with a plan to increase production by 400,000 barrels a day in the new year.

However, prices swung back up after the Opec+ agreed the meeting would not formally close. The unusual move was so the cartel could “continue to monitor the market closely”, pending any new developments, and make “immediate adjustments” rather than wait for the next meeting on 4 January.

Thedecision to leave its oil production policy unchanged for now may suggest that Opec+ is banking on new travel restrictions being short-lived if existing vaccines prove effective against the Omicron variant, or if its symptoms are milder than earlier variants of the virus.

More here:

After another day buffered by omicron worries, European stock markets have closed in the red.

The UK’s FTSE 100 lost 39 points, or 0.55%, to 7,129 points, with oil companies cushioning the selloff. Shell gained 1.6% while BP finished 1.1% higher.

Catering group Compass (+0.9%) and bank NatWest (+0.8%) were also in the risers.

But cyber-security firm Darktrace was the top faller, tumbling 9%, a day after its relegation from the FTSE 100 in the next reshuffle was confirmed.

European markets saw steeper losses, with France’s CAC down 1.2% and Germany’s DAX losing 1.3%.

It’s been a choppy week, since the discovery of the Omicron variant led to travel restrictions being imposed.

Danni Hewson, AJ Bell financial analyst, predicts more volatility as officials work out exactly what to do about the new variant.

“There had been much speculation that fears Omicron would stall economies and cut demand for oil might prompt OPEC+ to think twice about its plans to up output in the new year. A volte-face would have pushed up the oil price at a time when consumers are already being sorely taxed by rising prices. The decision not to change tack at the moment will be something of a salve to markets which have endured days of volatility as investors try to get their heads around how big an impact this variant might actually have. Of course, the emergence of a new Covid strain has taken the pressure off the group to do more than they had planned, to up output beyond the agreed levels in a bid to curb rising inflation. Governments know squeezed living standards make for unhappy voters and President Biden in particular has waded into the argument, though the moves made by the US were rather limited in scale and therefore in impact.

“In response the oil price slipped, but only slightly and after a momentary pause which saw big oil shudder in response, both BP and Royal Dutch Shell shot quickly back into green territory and big oil stocks on Wall Street seemed to follow a similar path.

Grab, the Southeast Asian unicorn with a superapp offering food delivery, ride-hailing and financial services has made a volatile entry onto New York’s Nasdaq today.

Victoria Scholar, head of investment at interactive investor, explains:

In a wildly volatile Nasdaq debut, shares in Grab have swung between gains and losses, now trading down nearly 10%, having initially opened up as much as 18%.

The Southeast Asian unicorn, which listed after a SPAC merger with Altimeter Growth Corp, is the most valuable tech business in the region with a market cap of almost $40bn. The Singapore ride-hailing firm raised $4.5bn from a number of investors including BlackRock and T. Rowe Price.

Although the company is yet to turn a profit, Grab is well-positioned to benefit from growth in South-East Asia and the accompanying demand for technology with its diversified business model covering deliveries, mobility and financial services. So far its food delivery business has had the most success, benefiting from the stay at home trend during the pandemic.

Investors are hoping that Grab can build momentum as we emerge from covid, having reported a slowdown in revenue and a widening EBITDA loss in its latest quarterly results.

‘Tiz the season for festive forecasts, as analysts take a stab at what might happen to stock markets and the economy next year.

And in that spirit, Saxo Bank has today released its 10 Outrageous Predictions for 2022. Not things that it believes will happen, but potential risks which investors aren’t pricing in.

One is that US inflation soars above 15% in a wage-price spiral, a prospect that would keep Jerome Powell awake at night

In this scenario, Saxo says:

By the fourth quarter of 2022, the wages for the lower half of US incomes are rising at an annualised 15% clip as companies scramble to find willing and qualified workers who are increasingly selective due to a rising sense of entitlement as jobs are plentiful relative to the meagre availability of workers at all skill levels.

This creates a wage-price spiral, with inflation over 15% by 2023, forcing the Federal Reserve into a “too-little, too-late move” to tighten monetary policy faster in a desperate effort to tame inflation. But the central bank has lost credibility; it will take time to regain it, says Saxo.

The market impact would be severe : extreme volatility in US equity and credit markets. The JNK high-yield ETF falls as much as 20% and the VIXM mid-curve volatility ETF soars as much as 70%.

Other ‘outrageous predictions’ are that the US mid-term election brings constitutional crisis; a stand-off over the certification of close Senate and/or House election results preventing the 118th Congress sitting on schedule in early 2023.

Or, Facebook could be abandoned by younger users in protest at the mining of personal information for profit; the attempt by Facebook parent Meta to reel them back in with the Metaverse stumbles.

Another possibility: a group of women traders launch a coordinated assault on companies with weak records on gender equality. This would lead to huge swings in equity prices for targeted companies, in a more sophisticated version of the meme stock Reddit Army.

The other predictions are:

• The plan to end fossil fuels gets a rain check
• EU Superfund for climate, energy and defence announced, to be funded by private pensions
• India joins the Gulf Cooperation Council as a non-voting member
  
• Spotify disrupted due to NFT-based digital rights platform
• New hypersonic tech drives space race and new cold war
• Medical breakthrough extends average life expectancy 25 years

Chief Investment Officer at Saxo Bank, Steen Jakobsen says this year’s theme is ‘revolution’

There is so much energy building up in our inequality-plagued society and economy. Add to that the inability of the current system to address the issue and we need to look into the future with a fundamental view that it’s not a question of whether we get a revolution but a more a question of when and how. With every revolution, some win and some lose, but that’s not the point—if the current system can’t change but must, a revolution is the only path forward.

A culture war is raging across the globe and the divide is no longer simply between the rich and the poor. It’s also the young versus the old, the educated class versus the less educated working class, real markets with price discovery versus government intervention, stock market buy-backs versus R&D spending, inflation versus deflation, women versus men, the progressive left versus the centrist left, virtual signalling on social media versus real changes to society, the rentier class versus labour, fossil fuels versus green energy, ESG initiatives versus the need to supply the world with reliable energy—the list go on.

We collaborated globally on Covid vaccines in 2020 and 2021. Now we need a new Manhattan Project–-type endeavour to set the marginal cost of energy, adjusted for productivity, on the path to much lower levels while eliminating the impact of our energy generation on the environment. Such a move would unleash the most significant productivity cycle in history: we could desalinate water, make vertical farms feasible almost anywhere, increase computer powers to quantum states, and continue to explore new boundaries in biology and physics.”

Opec+ have confirmed that they have agreed to lift output in January as planned, sticking to their agreed policy of production increases.

In a statement, the group say today’s meeting reconfirmed the production adjustment plan, and the decision to lift overall production by 400,000 barrels per day in January.

But unusually, today’s meeting will remain in session pending further developments of the pandemic.

This will let the group “continue to monitor the market closely and make immediate adjustments if required”, it says.

That, I think, means Opec could change policy straight away if demand or prices weakened sharply, rather than waiting for the next meeting on 4th January 2022.

But for now, more oil entering the market should feed through to lower fuel costs for motorists. That will cheer the Biden administration, which has been under pressure over soaring gasoline prices.

The oil price is falling sharply, on reports that the Opec+ group has agreed to raise output again next month as planned.

Reports from today’s meeting of Opec and its allies say the group has decided not to divert from its strategy of adding an extra 400,000 barrels of oil per day to the market each month.

Reuters says:

OPEC+ has agreed to go ahead with its planned January oil output rise of 400,000 barrels per day, two OPEC+ sources said on Thursday.

Amena Bakr, chief Opec correspondent at Energy Intelligence, has tweeted that the group seems to be in agreement about sticking to their current policy:

This has knocked the oil price, with some traders having anticipated that Opec+ would freeze production in January, given uncertainty over Omicron’s impact on the global economy.

Brent crude has tumbled to $66.31 per barrel, down 3.7% today, its lowest since mid-August.

It had hit three-year highs over $86/barrel in October, as Opec+ gradually reversed the steep production cuts implemented after Covid-19 lockdowns hurt demand for energy.

But it has fallen since, as rising Covid-19 cases have dampened demand.

UK household wealth soared last year thanks to rising house prices, pension values and savings.

Households’ net worth grew to £11.2 trillion in 2020, an increase of 8.4% during a year in which the pandemic hammered the economy.

It’s the second highest growth since the 2008 global economic downturn, the Office for National Statistics says. Over 40% of this increase in households’ net worth was due to land becoming more valuable, due to a 7.3% increase in average house prices.

This rise was likely to have been affected by the reduction in stamp duty rates, the ONS says.

Pensions added another 40%, mainly due to an increase in the value of defined benefit pension schemes, due to historically low gilt yields.

“Currency and deposits” contributed 21.5% of the growth in households’ net worth, as due to the jump in savings during lockdowns and the furlough scheme which protected incomes.

The increase in land values also lifted the UK’s net worth, which rose by £500bn to £10.7 trillion.

But general government net worth fell by £445bn in 2020 to minus £1,494 billion, the largest annual fall recorded, due to the surge in borrowing to cover the cost of the pandemic.

The UK’s financial net worth increased by £63bn, but remained negative at around minus £500bn in 2020, meaning the value of the UK’s financial liabilities continued to exceed the value of financial assets.

The ONS explains:

This was the first time UK financial assets increased more than financial liabilities since 2016 and have therefore made a positive contribution to growth in the UK’s net worth.

This was mainly attributed to greater overseas bank deposits and loan contracts with UK banks. The factors that would have contributed to this include: the availability of financial support for businesses, cheaper forms of funding, changes in demand and reluctance to spend because of the uncertainty during the coronavirus (COVID-19) pandemic.

The Brazilian economy has fallen back into recession, as high interest rates, rising inflation and a drought all hit growth.

Brazil’s GDP fell by 0.1% in the third quarter of 2021, following a 0.4% contraction in April-June, statistics agency IBGE reports. That puts Latin America’s largest economy into a technical recession (two consecutive quarters of economic contraction).

Brazil’s economic rebound from the worst of the COVID-19 pandemic has been hit by a rise in inflation, which led its central bank to raise interest rates several times this year .

Brazil has also been hit by the worst drought in almost a century, leading to water shortages and the threat of power blackouts, as the country has tried to recover from the pandemic.

Advertising boss Sir Martin Sorrell has said clients are cancelling Christmas events in response to Omicron, and criticised the UK government for failing to give sufficient guidance on masks.

Sorrell, the executive chairman of S4 Capital and the founder and former chief executive of WPP, said event cancellations had gathered pace since the new Covid variant was identified.

Sorrell told BBC Radio 4’s Today programme.

“What we are seeing our clients doing and other people [doing], the answer is they are … cancelling,”

“There has been quite a sharp series of cancellations since this happened just three, four, five days ago.”

Boris Johnson, who is embroiled in a controversy over Christmas parties at Downing Street during lockdown last year, has urged people not to cancel festive parties or nativity plays.

But, business minister George Freeman says his department won’t have a big party this year. His parliamentary team will have a Zoom gathering, due to the omicron variant, he told Times Radio.

In the eurozone, unemployment has dipped to its lowest level since the first wave of Covid-19 hit the region last year.

The euro area jobless rate dropped to 7.3% in October, down from 7.4% in September, and the lowest since spring 2020.

Eurostat estimates that eurozone unemployment has fallen by over 1.5m since October 2020, when the jobless rate was 8.4%

The youth unemployment rate also dipped in October, to 15.9% from 16% a month earlier.

But firms are also hiking their prices sharply, as they pass on higher commodity costs, energy bills, and labour costs.

Industrial producer prices in the euro area jumped by 5.4% in October alone, and were 21.9% higher than a year ago.

The increase is driven by higher energy costs -- up 62.5% year-on-year in the energy sector. But there was also a 16.8% increase in intermediate goods prices (items used to make final products), and a 4.2% jump in durable consumer goods.

Neil Birrell, Premier Miton chief investment officer and manager of Premier Miton Diversified fund range, says:

“The unemployment rate in Eurozone remains stubbornly high, but it was in line with expectations. Meanwhile, producer prices came in a lot higher than expected, up 5.4% month on month, reflecting the global concerns around inflation.

The whole outlook is obviously muddled by the Omicron issue, but the data is quite clear. For now, inflation is rising fast and the ECB will have to consider this in their policy discussions, as will all other central banks.”

Technology stocks are also pulling Europe’s stock markets down, following a report that demand for Apple’s flagship iPhone 13 has slowed.

Bloomberg reported that Apple has told its component suppliers that demand for the iPhone 13 lineup has weakened, according to people familiar with the matter.

Apple had already been juggling supply shortages, and some consumers appear to have have decided against trying to get the hard-to-find item.

Bloomberg explains:

Already, Apple had cut its iPhone 13 production goal for this year by as many as 10 million units, down from a target of 90 million, because of a lack of parts, Bloomberg News reported. But the hope was to make up much of that shortfall next year -- when supply is expected to improve. The company is now informing its vendors that those orders may not materialize, according to the people, who asked not to be identified because the discussions are private.

The company is still on track for a record holiday season, with analysts projecting a sales increase of 6% to $117.9 billion in the final three months of the calendar year. But it won’t be the blockbuster quarter that Apple -- and Wall Street -- had originally envisioned. Shortages and delivery delays have frustrated many consumers. And with inflation and the omicron variant bringing fresh concerns to pandemic-weary shoppers, they may forego some purchases.

Shares in Dutch semiconductor maker ASML have fallen by 4%. It provide chip makers with essential hardware, software and services to mass produce patterns on silicon.

Chipmaker Infineon Technologies are down 2.7%,

A drug treatment which, the makers say, works against the new Omicron variant of Covid-19, has been approved by UK regulators.

UK pharmaceuticals group GlaxoSmithKline reported this morning that a lab analysis of the antibody-based COVID-19 therapy it is developing with US partner Vir has shown the drug retains activity against all tested variants of concern, including key mutations of Omicron.

Sotrovimab, a single monoclonal antibody, binds to the spike protein on the outside of the COVID-19 virus, preventing it from attaching to and entering human cells, so that it cannot replicate in the body.

Tests are ongoing to confirm the results against all of the Omicron mutations, with an update expected by year-end, GSK added.

George Scangos, chief executive officer of Vir, explained:

“Sotrovimab was deliberately designed with a mutating virus in mind. By targeting a highly conserved region of the spike protein that is less likely to mutate, we hoped to address both the current SARS-CoV-2 virus and future variants that we expected would be inevitable.

This hypothesis has borne out again and again - with its ongoing ability to maintain activity against all tested variants of concern and interest to date, including key mutations found in Omicron, as demonstrated by preclinical data. We have every expectation that this positive trend will continue and are working rapidly to confirm its activity against the full combination sequence of Omicron.”

The news comes as Britain’s drug regulator, the Medicines and Healthcare products Regulatory Agency, approved sotrovimab, also known under the brand name Xevudy.

MHRA says it took the decision “after it was found to be safe and effective at reducing the risk of hospitalisation and death in people with mild to moderate COVID-19 infection who are at an increased risk of developing severe disease”.

Wall Street’s ‘fear index’, the VIX measure of volatility, has hit its highest level since January.

Volatility rose yesterday after the Centers for Disease Control and Prevention said the Omicron variant had been found in the US, knocking the earlier optimistic mood.

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

Uncertainty over the latest variant of Covid-19 continues to grip the markets, as oil producers gather (remotely) to decide whether to keep boosting their output despite the economic threat from Omicron.

Wall Street took another dive yesterday, in the most volatile session since March after the first case of the Omicron variant was reported in the United States, in California.

Wall Street’s benchmark S&P 500 index ended down 1.2% on Wednesday after being up 1.9% earlier in the day, while the Dow Jones industrial average lost 1.3% in another rollercoaster session.

This knocked some Asia-Pacific markets, with Japan’s Nikkei dropping another 182 points, or 0.65%, to 27,753.

European markets are set to slide at the open, having rallied strongly on Wednesday, with concerns that the US Federal Reserve could wrap up its stimulus package faster than expected also worrying investors.

Given the uncertainty over the latest variant’s virulence, transmissibility, and vaccine’s efficacy against it, the markets are being buffeted by the latest headlines.

As Jim Reid of Deutsche Bank says,

In terms of developments about Omicron, we’re still in a waiting game for some concrete stats, but there was positive news early on from the World Health Organization’s chief scientist, who said that they think vaccines “will still protect against severe disease as they have against the other variants”. On the other hand, there was further negative news out of South Africa, as the country reported 8,561 infections over the previous day, with a positivity rate of 16.5%.

That’s up from 4,373 cases the day before, and 2,273 the day before that, so all eyes will be on whether this trend continues, and also on what that means for hospitalisation and death rates over the days ahead.

The Opec+ group of major oil producers will assess the impact of Omicron on energy demand, when they meet later today to agree how much oil to pump in January.

Opec, led by Saudi Arabia will be joined by non-OPEC allies such as Russia. They must decide whether to stick with their plan to gradually increase oil production by 400,000 barrels per day each month, or pull back.

Peter McNally, global lead for industrials, metals & energy at research firm, Third Bridge, says today’s meeting will be one of Opec’s most important since the recovery began.

Authorities have looked to control the spread of COVID with swift lockdowns and the oil demand recovery in those regions has stalled as a result. International air travel is still far away from a full recovery, so the impact of limiting travel from African countries may be relatively minor.

Were OPEC+ to add another 400,000 barrels per day of supply for January 2022, it would be a signal that these countries expect the recovery to continue as previously planned. But this year began with Saudi Arabia unilaterally slashing production by 1 million barrels per day as the winter wave of COVID dashed the pace of recovery. This week’s meeting of OPEC+ ministers is shaping up to be one of the most significant since the pandemic recovery demand recovery began, and the key signal will be how much more oil will be added to supply to start the new year.”

The agenda

• 9.30am GMT: Weekly real-time-indicators of economic activity and social change in the UK
• 10am GMT: Eurozone unemployment report for October
• 10am GMT: Eurozone producer prices report for October
• Noon BST: Brazil’s third-quarter GDP report
• 1pm GMT: Opec+ meeting begins
• 1.30pm GMT: US weekly jobless data