Global stock markets are tumbling, on fears that central banks will start tapering their emergency Covid-19 support packages soon, after the US Federal Reserve said it would start scaling back its asset purchase programme this year – earlier than expected. More details are expected at next week’s central banker symposium in Jackson Hole, Wyoming.

The Fed is currently buying $120bn (£88bn) a month in US government bonds and mortgage-backed securities to keep longer-term interest rates low and the bond markets functioning smoothly amid the Covid pandemic.

The UK’s FTSE 100 was down 2% for much of the day, a decline that wiped almost £50bn off the value of the index, and is now trading 1.4% lower at 7,068, a drop of 100 points. Germany’s Dax has tumbled by 1.6% while France’s CAC slumped 2.2% and Italy’s FTSE MiB is 1.3% lower.

On Wall Street, stocks pared earlier losses but are still down. The Dow Jones and S&P 500 both slipped 0.2% while the Nasdaq lost 0.3%.

The number of Americans applying for first-time jobless benefits has fallen to the lowest level since mid-March 2020 – to 348,000 at the end of last week.

Oil prices have fallen for a sixth day, the longest losing streak since February 2020, on fears of lower demand as Covid cases rise and some countries reintroduce restrictions. Brent crude has tumbled 2.5% to $66.53 a barrel while US crude slumped 2.5% to $63.82 a barrel.

Our other main stories today:

The British Poultry Council has said food producers are facing serious staff shortages because of Brexit as this week’s partial closure of the Nando’s chain threw the spotlight on problems made worse by the fallout from Covid.

The trade association said its members, which include 2 Sisters Food Group – the country’s largest supplier of supermarket chicken, said one in six jobs were unfilled as a result of EU workers leaving the UK after Brexit.

Bingo is back, according to the Mecca owner, Rank, whose venues have outperformed expectations since reopening in May, but pandemic closures pushed annual losses at the group to more than £100m.

Facebook has announced plans to become “water positive” by 2030, restoring more water than the company consumes globally.

The annual pay of FTSE 100 chief executives fell during the pandemic but still equates to what a key worker would earn in a lifetime, according to a report that highlights the UK’s wage divide and the taxpayer support that has kept some companies afloat.

Some of Britain’s leading battery researchers have teamed up to develop prototype solid-state batteries, in the hope that the UK can take a leading role in the next stage of the electric car industry.

The FTSE 100 chemicals company Johnson Matthey, the Glencore-backed battery startup Britishvolt, and Oxford University are among the seven institutions that have signed a memorandum of understanding promising to work together on the technology.

Thank you for reading, and for your comments. Take care -- ‘see you’ tomorrow! - JK

The FTSE 100 in London lost more than 2% today, a decline that wiped almost £50bn off the index. Investors are also fretting about the rise in Covid infections around the world. Hargreaves Lansdown says:

• Investors are spooked by the virus once more, compounded by news that the Federal Reserve in the US may be on the brink of reducing its economic support for the US economy.
• The Delta variant of the virus is threatening the reopening of economies and frets over the impact on Chinese demand in particular are hitting hard. Shares in major mining companies that supply the metals and minerals needed to help China build its cities are tumbling, after a 10% fall in the price of iron ore overnight.
• Closer to home, concerns over shortages and bottlenecks in supply chains, affecting everything from automobile manufacturing to food production are also weighing on sentiment.
• Concerns over the fundamentals have been exacerbated by news from the US Federal Reserve that it may soon reduce its efforts to prop up the economy.

Steve Clayton, HL select fund manager, says:

With sentiment getting knocked it is perhaps no surprise to see defensive sectors faring best in a sea of red in the markets today. Shares in utilities and healthcare companies are holding up relatively well, but commodity and energy producers are amongst the worst hit.

If vaccinations can keep the virus from doing its worst, then confidence should improve before too long. Businesses drove a lot of costs out during the pandemic, which bodes well for future profit margins.

The number of Americans applying for jobless benefits for the first time has fallen to the lowest level during the pandemic.

The US Labor Department said 348,000 Americans filed for first-time jobless benefits in the week to 14 August, down 29,000 from the prior week. Economists had forecast a drop to 363,000.

Bingo is back according to Mecca owner Rank, whose venues have outperformed expectations since reopening in May, but pandemic closures pushed annual losses at the group to more than £100m, reports our media business correspondent Mark Sweney.

Rank, which owns the Mecca Bingo and Grosvenor Casino brands, said revenues almost halved from £629.7m to £329.6m in the year to the end of June. The company made a £107m pre-tax loss, compared with a £13.4m profit in the previous year.

The group is heavily dependent on its physical venues, which account for four-fifths of total revenues, with the government’s pandemic measures keeping its bingo halls and casinos closed for 59% of its financial year.

“Frankly, we are delighted it is over,” said John O’Reilly, the chief executive of Rank. The company lost £15m a month during closure periods.

However, O’Reilly said that business has bounced back better than expected since re-opening in May, with an additional boost since the further loosening of social distancing restrictions last month.

A major cleaning product company has been hit by shortages of materials and lorry drivers, leading to a 9.7% slump in its share price.

McBride, which makes own-label cleaning products for retailers, from detergents to dishwasher tablets, has issued a major profit warning, and flagged shortages of materials and of Heavy Goods Vehicle drivers, which have driven up its costs.

It is the latest company to be hit by labour shortages, after Nando’s closed 50 restaurants temporarily this week. The head of the British Poultry Council, Richard Griffiths, said this morning that its member companies had up to 16% vacancies, and said the staff shortages were caused by Brexit and tighter immigration rules.

McBride now expects adjusted profit before tax for the financial year 2022 to be 55% to 65% lower than current market expectations for 2021.

Although only 7 weeks into the new financial year, the previously highlighted raw material environment remains extremely challenging both in terms of exceptional price increases and supply availability.

More recently, and in line with the general trading environment experienced by others, the group has also started to experience distribution challenges, particularly in the UK and Germany as a result of the shortage of Heavy Goods Vehicle (HGV) drivers which has impacted upon both transport availability and cost.

The company is raising its own prices, but this is happening later than expected.

The head of the British Poultry Council, Richard Griffiths, was on BBC radio 4’s Today programme this morning, talking about staff shortages caused by Brexit. He said member companies are reporting up to 16% vacancies. He wrote to the Home Secretary earlier this month but hasn’t heard back.

This comes as the restaurant chain Nando’s closed about 50 outlets (more than a tenth of its restaurants) temporarily because it has run out of chicken. It blamed staffing issues at its suppliers’ factories as well as the shortage of HGV lorry drivers that has resulted in gaps on supermarket shelves in recent weeks.

Griffiths said:

The situation we are seeing is a result of the Brexit issues that have arisen and we are seeing there’s struggles across the supply chain with shortage of labour. We’ve seen a loss of staff across the supply chain, particularly in our member companies.

This is a direct result of the limiting of immigration policies and we are asking the government to ease those, and also look at the skills and development arena as well to try and encourage not just non-UK but also UK workers into the sector.

The poultry council is asking for poultry workers to be eligible for skilled worker visas. Under immigration policy they are not classed as skilled workers, Griffiths said, even though the job they are doing requires “an awful lot of skill”. He denied that if the industry was paying higher wages, it would attract more British workers.

That’s just not the case. We’ve seen over a number of years that the willingness and availability are just not there within the UK workforce. We operate in areas that have generally high employment, so the availability of labour is just not there.

He said the entire supply chain was affected by the staff shortages, including HGV drivers and the hospitality sector.

This is a massive problem that needs addressing across the industry and government needs to acknowledge the problem first.

Mining and energy stocks are among the biggest fallers in London this morning, tracking a slump in commodity prices amid signs of a slowdown in the global economic recovery, and worries over the US Federal Reserve’s plans to start pulling back its economic stimulus later this year – which is faster than expected.

Mining giant Anglo American is leading the losses on the FTSE 100, plunging 10.5% while oil group BP has lost nearly 4%, miner Rio Tinto has shed 2.7% and commodity trading and mining company Glencore has dropped 2.6%.

The Chilean miner Antofagasta’s London-listed shares are down 3.8% even though it unveiled soaring half-year profits, as it cut its copper production outlook for this year.

London copper prices dropped below $9,000 for the first time since April, falling as much as 1.4% to $8,913.30.

European stocks have plunged at the open. The UK’s FTSE 100 index has tumbled more than 2% to 7,025. Germany’s Dax dropped 1.5%, France’s CAC fell 1.6% and Spain’s Ibex lost 1.45%.

The annual pay of FTSE 100 chief executives fell during the pandemic but still equates to what a key worker would earn in a lifetime, according to a report that highlights the UK’s wage divide and the taxpayer support that has kept some companies afloat, reports my colleague Rob Davies.

The bosses of companies in the blue-chip share index were paid £2.69m on average in 2020, the High Pay Centre said, with vaccine-maker AstraZeneca’s chief executive, Pascal Soriot, taking top spot thanks to a £15.45m deal.

The average pay figure fell by 17% compared with the £3.25m recorded in 2019 but is still 86 times the £31,000 that an ordinary British worker can expect to earn in a year.

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

The minutes from the last US Federal Reserve meeting reveal that, while no firm decisions were made, “most participants… judged that it could be appropriate to start reducing the pace of asset purchases this year”. This means that as the US economy recovers from the Covid crisis, America’s central bank will start pulling back some of the massive economic stimulus it has introduced – earlier than expected.

However, this doesn’t mean that the Fed will raise interest rates more quickly. The minutes show that many officials believe that the Federal Open Market committee (FOMC) should “clearly reaffirm the absence of any mechanical link between the timing of tapering and that of an eventual increase in… the federal funds rate”.

Andrew Hunter, senior US economist at Capital Economics, Hunter doesn’t expect interest rates to be raised until 2023. He explains the Fed’s thinking:

With a growing number of officials now openly discussing the possibility of tapering beginning soon on the back of July’s strong employment report, it looks more likely than not that the wind-down will begin later this year, rather than early next year as we had previously thought.

A final decision won’t be made until the September FOMC meeting at the earliest and will probably depend on another solid rise in payrolls in August, but Fed Chair Jerome Powell could now use his Jackson Hole speech next week to drop a stronger hint that tapering is on the way.

Officials seemingly didn’t come to any firm decisions on the pace or composition of tapering either, but the minutes do at least appear to put to bed the idea that the Fed’s $40bn monthly MBS [mortgage-backed securities] purchases could be reduced quicker than their $80bn of Treasury purchases, with most officials in favour of reducing them at the same rate.

While there is clearly support from some of the more hawkish officials for a relatively quick taper finishing early next year – leaving plenty of scope for rate hikes to potentially begin later in 2022 – the minutes also noted that “several” officials thought that “an earlier start to tapering could be accompanied by more gradual reductions in the purchase pace”. On balance, we still expect the run-down to last 9 months which, if it began within the next few months, would point to a mid-2022 end-date.

James Knightley, chief international economist at ING, says:

The minutes to the July FOMC meeting show a Fed that is pretty split on most things, but recognises that we are getting much closer to the point of tapering. Officials have offered more vocal support in recent days to earlier action and we are pencilling in a September announcement, but it is clear that the Covid resurgence could delay it.

Asian shares fell on the news, with Japan’s Nikkei and the Singapore market both losing 1.1% and Hong Kong’s benchmark shedding 1.8%.

Oil prices are down for a sixth day, the longest losing streak since February 2020, as rising Covid cases sparked fears over slower fuel demand while a surprise increase in US gasoline inventories added to the pressure. Slower growth in China, the world’s biggest oil importer, is weighing on the market in particular.

Brent crude fell as low as $67.10 a barrel, the lowest since late May, and is now trading about a dollar lower at $67.21 a barrel, a 1.5% drop. US crude has lost $1.27 to 64.19 a barrel, a near-2% decline.

Attention will now turn to next week’s Jackson Hole central bank symposium, which should offer further clues about the Fed’s timelines to a slowdown in the pace of monthly asset purchases.

Today’s focus will be on the latest US weekly jobless claims which are expected to come down further to 363,00.

The Agenda

• 1.30pm BST: US Initial jobless claims for week of 14 August (forecast: 363,000)
• 3pm BST: US Conference Board Leading Index for July (forecast: 0.8%)