The US economy grew at an annualised rate of 6.5% in the second quarter, similar to the first quarter’s 6.4% growth rate. The figure is pretty solid but disappointed analysts who had expected a faster expansion of 8.5%.

The dollar slipped further after the data, while US and European stock markets are pushing higher.

The pound has risen 0.5% against the dollar to $1.3968, lifted by the fall in new Covid-19 infections in the past week and last night’s dovish comments from US Federal Reserve chair Jay Powell, who suggested that policy tightening was still “some way away”.

In Germany, unemployment fell as companies hired more workers in July, with the rate dipping to 5.7%. At the same time, inflation rose to 3.1%.

In the UK, mortgage lending surged to a record high of nearly £18bn in June, s home-buyers rushed to take advantage of a tax break before it was scaled back, Bank of England data showed today.

Britain’s biggest drugmaker AstraZeneca has revealed that it made $894m from Covid-19 vaccine sales in the second quarter, more than triple the $275m it made in the first quarter – resulting in a total of $1.2bn in the first half.

However, this is a fraction of the billions of dollars being generated by US rivals Pfizer and Moderna from their jabs. AstraZeneca is providing the shot, which was invented by Oxford University, on a not-for-profit basis during this pandemic.

Here are our main other stories today:

Lloyds Banking Group has swung back to profit and reinstated dividend payments, after receding Covid risks helped improve the UK’s economic outlook.

The UK’s competition watchdog has imposed fines of more than £100m on the pharmaceutical company Advanz (formerly known as Concordia International before its name change in 2018) and its former private equity owners after it was found to have inflated the price of its thyroid tablets by up to 6,000%.

Royal Dutch Shell has raised its dividend by almost 40% and kickstarted share buybacks worth $2bn (£1.4bn) as soaring global oil prices helped to fuel a sharp rise in quarterly profits.

The number of cars rolling off UK production lines last month slumped to the lowest June level in almost 70 years, as car manufacturers were hit by shortages of both staff and semiconductors.

Our Coronavirus crisis watch:

All the main US indices rose when Wall Street opened, although gains were limited, after a slew of strong company results and solid US GDP growth figures for the second quarter.

• Dow Jones up 55 points, or 0.2%, at 34,985
• S&P 500 up 3 points to 4,403
• Nasdaq up 8.6 points to 14,771

NEWSFLASH: The US economy grew at an annualised rate of 6.5% in the second quarter, far less than the 8.5% growth forecast by Wall Street. It is similar to the 6.4% rate seen in the first quarter.

German inflation picked up more than expected in July, rising further above the European Central Bank’s target of near 2%, the Federal Statistics Office said today.

Consumer prices, harmonised to make them comparable with inflation data from other European Union countries, rose at an annual rate of 3.1% in July, up from 2.1% in June. Economists had expected a 2.9% reading.

The statistics office says:

A base effect due to the corona(virus)-induced reduction in VAT rates in July 2020 is, in particular, responsible for the further increase in the inflation rate in July 2021.

Since January 2021, VAT rates for almost all goods and services have been back at the previous level.

In Germany, unemployment has declined as companies hired more staff, in a sign that the recovery in Europe’s biggest economy is picking up.

The country’s Labour Office said the number of people out of work fell by 91,000 in seasonally adjusted terms to 2.598 million in July. A Reuters poll had forecast a fall of 28,000. The jobless rate fell to 5.7%, which was also better than expected, from 5.9% in June.

Labour Office head Detlef Scheele says:

Unemployment and underemployment have continued to fall sharply since the start of the summer break. Companies are increasingly looking to hire new staff.

Spain’s unemployment rate also fell slightly, but remained much higher. It dipped to 15.3% in the second quarter from nearly 16% in the first quarter.

UK factories turned out 498,923 cars in the first half of the year, down 38.4% on the five-year average, according to new figures from the Society of Motor Manufacturers and Traders, which blamed staff and chip shortages.

Here are its key points:

• 69,097 cars roll off production lines in June, weakest total since 1953, bar Covid hit June 2020.
• UK factories turn out 498,923 cars in first half of year, down 38.4% on five-year average.
• Latest forecast suggests global chip shortage could negatively impact planned UK production volumes by up to 100,000 units.
• Industry calls for immediate action to mitigate impact of self-isolation or risk further blow to recovery.

Seán Kemple, managing director of Close Brothers Motor Finance, says:

With no end in sight for the global semiconductor shortage, the motor industry is facing severe supply issues that risk serious roadblocks in the journey to recovery. Small disruptions in production are causing a domino effect, leading to long delays in the new car market; putting pressure on retailers to meet the high level of demand.

Manufacturers Infineon recently predicted that as many as 2.5m car sales could be delayed in the first half of this year. For buyers hoping to have more luck in the used car market, they could face bumped-up retail prices as demand soars, with some second-hand models selling for more than their original value.

In good news, the UK car industry is at a pivotal point in its journey to electrification. But for this trend to continue, we need to see the infrastructure in place to support AFV ownership. An extra focus on the quality, as well as quantity, of charging networks is essential, which in many cases are not working as they should be. The car market has the opportunity to build back stronger, and greener, but it’s down to Government support and industry collaboration to make that happen.

Let’s turn to today’s economic data.

UK mortgage lending surged by a record amount in June as home-buyers rushed to take advantage of a tax break before it was scaled back, Bank of England data showed today.

Mortgage borrowing rose by £17.9bn in June from May, the biggest monthly increase since records began in 1993.

Key points

• Net mortgage borrowing reached a record high of £17.9bn in June, just before the lower stamp duty rates began to taper off from July. Mortgage approvals for house purchase were 81,300 in June, down from 86,900 in April.
• Consumers borrowed £300m as consumer credit, on net. The effective rate on new personal loans remained low at 5.67%, compared to 7.03% in January 2020.
• Households’ net flow in to deposit accounts increased in June, to £9.8bn. Deposit interest rates continued to fall slightly to new historically low levels.
• Large businesses borrowed £800m from banks in June, whilst small and medium sized businesses repaid £300m.

Martin Beck, senior economic advisor to the EY ITEM Club, says:

The secured lending data was again subject to distortions caused by changes to stamp duty. With the threshold for paying stamp duty falling from £500,000 to £250,000 at the end of June, net lending rose to a record high of £17.9bn, as buyers rushed to complete before the deadline.

But, conversely, mortgage approvals slipped to an 11-month low of 81,338, reflecting the notion that most buyers would have struggled to complete in time if their mortgage was not approved until June.

Mitchells & Butlers has enjoyed strong sales since its pubs and restaurants reopened from 12 April onwards. The company, which owns Harvester, Toby Carvery and All Bar One, said in the first five weeks of reopening indoors and outdoors (from 17 May), like-for-like sales were at 98% of pre-pandemic levels, though this slowed to 89% of pre-Covid levels in the following five weeks.

There are some signs that things have improved again after restrictions were eased further on 19 July, the company said. The Euro 2020 football tournament provided a boost, but that aside suburban locations and food-led outlets have performed best while city centre pubs are not doing so well. This not surprising, as many people are still working from home and not commuting to city centres as much as before.

The London-listed spirits maker Diageo toasted better-than-expected sales for the past year thanks to strong tequila and whisky sales. North America led the way; as bars and restaurants reopened, customers treated themselves to tequila, liqueurs and Johnnie Walker whisky.

Diageo said demand rose despite its decision to raise prices on its Casamigos tequila brand and Baileys liqueur, which was driven by the trend for home baking during Covid-19 lockdowns. Turkey and Northern Europe also saw strong demand for scotch whisky in shops.

Organic net sales climbed 16% to £12.7bn in the year to 10 June, and Diageo upped its annual dividend by 5% to 44.59p a share. Its operating profit rose by three-quarters to £3.7bn.

European stock markets are pushing higher, buoyed by strong company results and receding concerns over China’s regulatory clampdown. The pan-European Stoxx 600 index has hit a fresh record high of 463 points, up 0.3% on the day.

Airbus, the world’s biggest plane maker, provided the biggest boost to the European index. Its shares jumped 3.4% after the company sharply raised its forecasts for 2021 deliveries and profits.

The FTSE 100 index is trading 0.7% higher at 7,066, lifted by Shell (up 3.5%), Anglo American (up 4.3%), other mining shares and Lloyds Banking Group (up 0.87%).

Anglo American said it would hand back $4.1bn to shareholders after surging commodity prices catapulted its half-year profits to the highest level in the miner’s 104-year history.

Royal Dutch Shell has raised its dividend by almost 40% and kickstarted share buybacks worth $2bn (£1.4bn) as soaring global oil prices helped to fuel a sharp rise in quarterly profits. Here is our full story:

Here is our full story on Lloyds:

Britain’s biggest drugmaker AstraZeneca has revealed that it made $894m from Covid-19 vaccine sales in the second quarter, more than triple the $275m it made in the first quarter. However, this is a fraction of the billions of dollars being generated by US rivals Pfizer and Moderna from their jabs. AstraZeneca is providing the jab, which was invented by Oxford University, on a not-for-profit basis during this pandemic.

The Anglo-Swedish company has further postponed its application to US regulators for approval of the vaccine to the second half of this year.

Pfizer made $7.8bn from the Covid jab it developed with Germany’s BioNTech, more than doubling its first-quarter takings of $3.5bn. It raised its 2021 sales forecast for the vaccine to $33.5bn from $26bn yesterday, as the delta variant spreads rapidly and scientists debate whether people will need booster shots. The two companies have tweaked their mRNA vaccine to target the delta variant and will begin testing the modified jab on humans next month.

Moderna will reveal next Thursday how much it made from its coronavirus jab between April and June. In May, it made its first-ever quarterly profit since it was founded in 2010 thanks to the Covid jab, which brought in $1.7bn in sales between January and March. The Massachusetts-based firm forecast revenues of $19.2bn from the jab this year.

Royal Dutch Shell has hiked its dividend by almost 40% and kickstarted share buybacks of $2bn before the end of the year after the post-pandemic oil market recovery helped to deliver better than expected profits for the last quarter, reports our energy correspondent Jillian Ambrose.

The Anglo-Dutch oil giant reported its highest profits in two years for the last quarter following a steady rise in global oil prices in line with the reopening of global economies following the outbreak of Covid-19 pandemic last year.

The company’s profits for the second quarter climbed to $5.5bn from $3.2bn in the same quarter last year, around 9% higher than the consensus forecasts of major equity analysts. The growing profits were in large part due to higher oil prices which climbed from less than $45 a barrel in the second quarter of 2020 to around $75 a barrel in recent weeks.

Foxtons has enjoyed its best half-year since 2016 as it cashed in on the buoyant housing market. Revenues rose to nearly £67m in the six months to June, from £40m in 2020 and £52m in 2019. The London estate agent made a profit before tax of £3.3m, compared with losses of £4.3m in 2020 and £2.5m in 2019.

The firm, which bought the London chain Douglas & Gordon recently, has resumed dividend payments to shareholders and announced a £3m share buyback today. It is also investing in £3m in the “next generation” property website Boomin.

European stock markets are continuing their recovery from yesterday.

• UK’s FTSE 100 up 31 points, or 0.46%, at 7,048
• Germany’s Dax up 0.3%
• France’s CAC up 0.6%
• Spain’s Ibex up 0.4%

Britain’s competition watchdog has imposed fines of more than £100m on the London-based pharmaceutical company Advanz and its former private equity owners HG Capital and Cinven, after they were found to have inflated the price of thyroid tablets by up to 6,000%.

Following an investigation, the Competition and Markets Authority concluded that Advanz charged “excessive and unfair prices” for liothyronine tablets, which are used to treat thyroid hormone deficiency. Advanz, which changed its name from Concordia International, increased the price of thyroid tablet packs from £20 in 2009 to £248 in 2017.

NHS spending on the tablets was £600,000 in 2006, but by 2009 had increased to more than £2.3m and jumped to more than £30m by 2016.

Here is our original story:

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

Lloyds Banking Group has swung to a first-half profit and reintroduced dividend payouts to shareholders, boosted by a buoyant housing market and recovering economy.

The bank posted a pre-tax profit of £3.9bn for the six months to June, beating analysts’ expectations of £3.1bn. It compares with a loss of £602m in the same period last year, when it set aside billions of pounds to cover a potential surge in bad loans because of the Covid-19 pandemic.

Asian markets have bounced back from their sell-off earlier in the week, as China tried to calm investor nerves by telling foreign brokerages not to “over-interpret” its latest regulatory actions on education companies and overseas listings. Regulators reportedly called banks overnight to tell them that Chinese firms would be allowed to list in the US as long as they met listing requirements.

Japan’s Nikkei is up 0.7%, Hong Kong’s Hang Seng has gained 2.9% and the Australian market has advanced 0.5%. China’s blue-chip CSI 300 index gained 2% and the Shanghai Composite Index rose 1.5%.

European markets enjoyed a welcome recovery yesterday after two days of losses, closing higher on the back of some positive company results and optimism over an easing of some travel restrictions. Markets are expected to open slightly lower today, though.

Wall Street ended the day mixed, with the Nasdaq gaining 0.7% while the Dow Jones and S&P 500 closed slightly lower, after the latest US Federal Reserve decision moved the bond tapering argument onto next month’s Jackson Hole gathering. The Fed left interest rates unchanged and the level of bond-buying at $120bn a month.

The dollar slipped in Asian trading, after Fed chair Jerome Powell suggested that policy tightening was “some way away”.

I’d say we have some ground to cover on the labor market side.

I think we’re some way away from having had substantial further progress toward the maximum employment goal.

Michael Hewson, chief economist at CMC Markets UK, has looked at this.

The Fed did acknowledge that the economy had progress towards the goals need to look at tapering but there was still some way to go. The decision was unanimous. On the question of what signified “substantial further progress” Powell was typically reticent declining to offer much more than various banalities on the topic.

On the economic calendar, the highlight of the day is the first estimate for US GDP growth in the second quarter. The economy is forecast to have expanded by 8.6%, up from 6.4% in the first three months of the year.

The trading platform Robinhood gets set for its first day of trading as a public company, when the US markets open later this afternoon, in what is expected to be one of the biggest IPOs this year, after Coinbase’s listing.

Robinhood, which is used by amateur stock investors to play the market, has sold shares at $38 apiece, the low end of its $38 to $42 range, raising close to $2bn and valuing the company at about $32bn.

Hewson says:

It’s a particularly challenging time for IPOs with sentiment as it is now and given how, after a lot of hype, Coinbase is now trading below its $250 indicative price after a big surge on day one.

The Agenda

• 8am BST: Spain unemployment rate for Q2 (forecast: 15.1%)
• 8.55am BST: Germany unemployment for July (forecast rate: 5.8%)
• 9am BST: UK SMMT Car production for June
• 9.30am BST: UK Mortgage approvals and consumer credit for June
• 10am BST: Eurozone consumer confidence final for July (forecast: -4.4)
• 11.30am BST: Spain business confidence for July
• 1pm BST: Germany inflation for July (forecast: 3.3%)
• 1.30pm BST: US GDP growth for Q2 (forecast: 8.6%)
• 1.30pm BST: US Jobless claims for week of 17 July
• 3pm BST: US Home sales for June