FTSE Slips To One-Year Low On Growth Fears

The FTSE has closed at its lowest level in nearly a year with a crisis of confidence over the global recovery.

It came as there were warnings about a triple-dip recession in the Eurozone at the IMF's annual conference in Washington.

Data from Europe's biggest economy, Germany, points towards a serious slowdown, with exports falling 5.8% in August - the biggest monthly fall in five years.

The FTSE 100 Index ended the week 91.9 points lower at 6340.

It leaves London's top 100 listed companies worth £140bn less than they were just over a month ago, and at their lowest ebb since last October.

Video: The Week's Big Business Stories

Worries about the global economy, particularly in Europe and Asia, have been accompanied by a wave of selling in energy and commodity stocks due to a sharp fall in the price of oil.

The Ukraine crisis and spread of the deadly ebola virus have also added to fears.

Wall Street saw its worst week since May 2012, with the Dow Jones industrial average down to 16,544.

Germany's Dax was down 2%, extending its losses for the week to 4%, and France's Cac 40 fell by more than 1% on Friday.

On Wednesday, the IMF downgraded global growth for this year and next, and lowered its assessments of Germany, France and Italy.

However, it kept its UK growth estimate for this year static at 2.7%.

That prompted Chancellor George Osborne to warn: "I'd be the first to say we're at a critical moment because the Eurozone risks slipping back into recession and crisis and that is already having an impact on the UK."

Around 50% of UK exports go to the EU.

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Fears UK Will Be Hit By New Euro Recession

By Ed Conway, Economics Editor, in Washington

The euro crisis is back. But this time it's different.

That's the general gist of the discussions at the International Monetary Fund meetings in Washington this week.

For this time around the meetings - a key opportunity for policymakers to catch up on the state of the global economy - have coincided with a fresh bout of fear over the euro area.

This isn't the same kind of crisis the single currency faced a couple of years ago, when there were genuine worries that it might break up.

Instead, the concern is that it simply hasn't recovered fully from the recessions of recent years. Worse: it may soon slump back into another recession.

Leaders are looking to the European Central Bank to take action

Why? In large part because of long-term problems in the continent: weak growth, poor demographics and unreformed regulatory systems.

The problem is that this time around there is even less clarity about what to do about it.

Video: IMF's Delicate Dancing Act

The French are determined to borrow and spend more to try to boost growth.

So are the Italians. The problem is that doing so will mean they will break the supposedly iron-clad fiscal rules laid down by eurocrats in the teeth of the crisis.

The Germans are determined to keep control of their public finances, but are being urged by most of their neighbours to spend a bit more and boost demand. Though no-one is courageous enough to tell them to their face.

That's the real reason why the IMF has spent most of the past week telling European countries to spend more on infrastructure.

You only have to watch our interview with IMF deputy managing director David Lipton to see how delicate a dancing act the Fund is having to perform here.

Meanwhile everyone, including George Osborne, has been looking towards the European Central Bank, indicating that they might be wise to consider going all in and doing full-scale quantitative easing.

Except that the ECB and central banking insiders insist they have already done enough - and that it's up to the politicians to do more.

Video: Economic Issues Linked To Conflict

In other words, it's all a bit of a mess. Europe is sliding towards a possible triple-dip recession and no-one seems to be able to decide what to do about it.

Now, to be fair, this episode doesn't have the same level of fear as the 2008 financial crisis or the subsequent euro malaise.

There are no rioters on the streets in Greece and Madrid.

But in another sense this is a far deeper problem: another recession in Europe could be contagious, knocking a serious chunk off Britain's growth prospects.

There is no fix - and no easy answer.

This comes as the world faces a whole barrage of other issues: ebola, which World Bank president Jim Yong Kim has focused on this week; the rise of IS, Islamic State, which IMF Middle East head Masood Ahmed warns has economic as well as social root causes.

All of which helps explain why markets are so jittery at the moment.

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Old Mutual Sweetens £650m Bid For Wealth Firm

By Mark Kleinman, City Editor

Old Mutual, the London-listed South African financial services group, is in advanced talks about a £650m takeover of the UK's second-biggest independent wealth manager.

Sky News has learnt that Old Mutual is closing in on an agreement to acquire Quilter Cheviot after sweetening its offer for the company by approximately £50m.

A deal could be struck within a few weeks, continuing a shake-up of the City's wealth management landscape at a time of substantial regulatory change.

Quilter Cheviot, which is owned by the private equity firm Bridgepoint, was the subject of an earlier bid from Old Mutual during the summer.

People close to the situation said that a deal between the two companies was not certain, adding that Bridgepoint was continuing to progress its plans for a stock market listing that would catapult Quilter Cheviot into the ranks of London's 350 largest listed companies.

Other prospective buyers, including Investec, are said to have examined a takeover of Quilter Cheviot although it was unclear whether any other formal offers have been tabled.

In a statement issued last month, Bridgepoint said:

"Inevitably when IPO plans are being prepared there is parallel speculation and rumours about alternatives. We never comment on such rumours."

The addition of Quilter Cheviot to Old Mutual's wealth management arm would create a more powerful platform for serving affluent clients at a time of consolidation across the sector.

Another big player, Bestinvest, was sold to Permira, another buyout firm, last year, with a follow-on deal taking the firm's assets under management to approximately £9bn.

A flurry of deals has been accelerated by regulatory reforms known as the Retail Distribution Review, which have altered the way that wealth managers are remunerated for their work, shifting from a largely commission-based system to one based on the volume of assets under management.

Quilter Cheviot, which manages approximately £16bn in assets, was formed in 2012 from the merger of Quilter & Co and Cheviot Asset Management.

The company traces its roots back to 1771, making it one of the UK's oldest financial services firms.

Evercore, an investment bank, is advising Bridgepoint, while Old Mutual is being advised by bankers at Rothschild on the talks, insiders said.

Old Mutual, which declined to comment, is interested in expanding its wealth management business at a time when it is also reshaping parts of its business.

On Thursday, the Anglo-South African group priced the New York listing of its US asset management business slightly below its target range.

Bridgepoint also declined to comment.

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Counting The Cost Of The Ebola Outbreak

The impact of the deadly ebola virus may cost West Africa £20bn, experts have warned.

The World Bank said the worst case scenario would see the wider region's lost GDP amount to 3.8%, with Liberia at risk of losing almost 12%.

Sierra Leone, which was forecast to have one of the top 10 growth economies globally in 2014, is also expected to see significant impact.

World Bank president Jim Yong Kim said: "The international community now must act on the knowledge that weak public health infrastructure, institutions and systems in many fragile countries are a threat not only to their own citizens.

"They are also to their trading partners and the world at large."

The spread of the deadly virus is the worst health scare since the outbreak of AIDS in the 1980s, according to a US official, overtaking the SARS crisis a decade ago.

"I would say that in the 30 years I've been working in public health, the only thing like this has been AIDS," US Centers for Disease Control (CDC) and Prevention director Thomas Frieden said.

"It's going to be a long fight," he told the heads of the United Nations, World Bank and International Monetary Fund gathered in Washington DC for an emergency summit.

The UN Food and Agricultural Organisation (FAO) also said the ebola crisis may impact food security.

This comes despite continuing price decline for most food items globally, bumper wheat production and huge rice stockpiles.

Tour companies and airlines have already been hit over Ebola fears

The FAO said the outbreak was a "hot spot" of concern since it was disrupting markets and farming activities "affecting food security and large numbers of people".

Meanwhile, the cost to other countries is yet to be accurately calculated.

Tour firms and airlines have already seen share prices fall as fears spread.

But specialist firms providing goods and services to help overcome the outbreak have seen benefits.

Phoenix Air Group, the world's only specialised highly contagious air transport service using Gulfsteam III jets, has been swamped with exclusive-use bids.

The UK, Canada, Mexico, Japan and the UAE have all tried to establish exclusive contracts, according to a US Department of State briefing document seen by Sky News.

The UN and World Health Organisation also tried to secure deals with Phoenix, the document revealed.

In response, the US offered Phoenix a $5m (£3m) six-month contract for medevac services for American government employees who may become infected.

And suppliers of white anti-contamination suits have seen orders spike as governments increase their response.

Britain's Department for International Development has boosted suit orders from a Hull-based contractor, from 50,000 a month to 100,000.

The suits cost around £25 each and are worn for about one hour, before the contamination risk becomes too great.

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EDF Go Ahead for Hinkley Point Nuclear Reactor

French energy giant EDF has been given approval to build a new nuclear power station at Hinkley Point in north Somerset, it has been confirmed.

The new-build power station is part of a plan to replace 20% of Britain's ageing nuclear power infrastructure.

Approval for the construction has been confirmed by regulators at the European Commission, following prior approval by Competition Commissioner Vice-President Joaquin Almunia.

The EU examined the bid over concerns the UK Government was giving excess help to the plan.

Mr Almunia said: "After the commission's intervention, the UK measures in favour of Hinkley Point nuclear power station have been significantly modified, limiting any distortions of competition in the single market.

"These modifications will also achieve significant savings for UK taxpayers.

"On this basis and after a thorough investigation, the commission can now conclude that the support is compatible with EU state aid rules."

Britain has previously estimated the new build cost at £16bn but some forecasts have put the total price up to £25bn.

The EU said that under treaty rules, member states are free to determine their energy mix.

It said that the UK has decided to promote nuclear energy and this decision is within its national competence.

However, it insists that when public money is spent to support companies, the commission has the duty to verify that this is done in line with the EU state aid rules, which aim to preserve competition among member states.

Known as Hinkley Point C, it will replace the A station, which is being decommissioned, and the operational B station.

Video: Nuclear Deal 'To Boost Industry'

It is the first in a new generation of UK nuclear power stations.

EDF had earlier said: "A new nuclear power station at Hinkley Point will not only provide a clean, secure and affordable source of electricity for around five million homes, but it will also provide around 900 jobs at the new power stations for more than 60 years."

The lengthy building programme is expected to create 25,000 jobs for almost a decade.

The industry's trade body head, Lord Hutton of Furness, welcomed the decision and said: "The Nuclear Industry Association is pleased the deal for Hinkley Point C has been approved.

"This is an important step in securing the UK's home-grown low-carbon electricity generation while adding jobs and prosperity to the economy."

:: EDF Energy CEO Vincent De Rivaz will be interviewed by Ian King Live tonight at 6.30pm.

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High Street Decline Continues With Shop Closures

By Poppy Trowbridge, Consumer Affairs Correspondent

The decline of the high street has accelerated in the first half of the year, according to new figures.

Experts suggest betting shops and discount stores gained increasing footholds at the expense of traditional retailers

While the recession has hit high street businesses hard, the changes have been put down to the rise of digital commerce.

The collapse of Phones 4u has added to the overall rise in shop closures

Matthew Hopkinson, director of the Local Data Company, told Sky News: "Significant changes are continuing to take place across Britain's town centres.

"It reflects the reality that shops need to become experiential destinations.

Video: High Street Woes Means More Pop Ups

"The transaction element is between people and not on product.

"The UK leads in terms of the impact online."

Town centres saw 406 net store closures compared to 209 in the same period last year, research from accountancy firm PwC, compiled by the Local Data Company, showed.

The collapse of businesses such as Phones 4u and lingerie chain La Senza saw this rise to 964 for the year to date at the end of September - two-and-a-half times the number for the whole of 2013.

There were 953 net closures in the first half of 2012 which reflects a closure rate of about 16 shops each day.

Traditional goods retailers such as shoe and clothes shops saw a net decline of 365 in the first half while leisure chains - encompassing food, beverage and entertainment - grew outlets by a net 215.

About 80% of the UK's national output comes from services, which includes retail, hospitality and financial industries.

The figures showed the changing face of the high street with coffee outlets, banks, pound shops, charity shops and convenience stores on the rise, together with American-style eateries.

Meanwhile, video libraries were wiped out, as were many mobile phone shops.

Mark Hudson, retail leader at PwC, said: "This data shows that we are now really starting to see the full effects of the digital revolution and consequent change in customer behaviour play out on the high street.

"We're heading for a high street based around immediate consumption of food, goods and services or distress or convenience purchases."

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HSBC Directors Quit In Protest At Jail Threat

By Mark Kleinman, City Editor

Two directors of HSBC's UK arm are poised to quit in protest at new Bank of England rules that pave the way for lengthy jail sentences to be imposed on senior managers of failed lenders.

Sky News can exclusively reveal that Alan Thomson, a member of the audit and risk committees of HSBC Bank plc, has tendered his resignation and will leave the board at the end of October.

John Trueman, the deputy chairman of the legal entity that manages the UK high street and commercial bank, is also understood to be on the verge of resigning, despite having only taken on that role in December last year.

Sources close to the situation said that the likely departures of both men were a direct consequence of Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) proposals to strengthen accountability for senior bankers.

A public filing about Mr Thomson's exit will be made by the end of the month, with a separate one about Mr Trueman following if his resignation becomes official.

The likely exits of the two HSBC directors over the proposed regulatory reforms has caused deep disquiet both there and among senior executives elsewhere in the sector, according to insiders.

They are the first bankers to have decided to relinquish their roles because of the impending regime.

"This is just the tip of the iceberg," said a lawyer close to another major UK bank.

Under proposals on which the PRA is consulting until the end of this month, bank directors and other top executives could face a new criminal liability if they were deemed to have taken reckless decisions which led to the collapse of their employer.

They would also be subject to disciplinary action from the City regulator for up to six years, twice the current time-limit, and be obliged to certify that all customer-facing staff and material risk-takers are competent to perform their duties.

Crucially, the new measures would be framed on a 'guilty until proven innocent' basis, according to lawyers, making it more difficult for bank bosses to clear their names if their organisation failed.

The PRA is also introducing new rules next year forcing bankers to defer bonuses for seven years from the point of award, creating the toughest pay framework of any global financial centre.

George Osborne, the Chancellor, pushed for the more stringent regime in the aftermath of the banking crisis and the conclusions last year of the Parliamentary Commission on Banking Standards, set up following the Libor rate-rigging scandal.

The resignations of the HSBC directors are, however, expected to throw the reforms into a sharper light at a time when bank boards are struggling to identify suitably qualified directors.

The PRA document published in June made it clear that the FCA would be responsible for oversight of banks' non-executive directors under a significant management functions regime.

On Monday, the PRA set out further details of its plans to ring-fence high street lenders from the same groups' investment banking arms by 2019.

This structural overhaul will entail banks recruiting separate boards for the different entities within their businesses, further increasing the need for individuals willing to serve as directors.

Mr Thomson and Mr Trueman, along with boardroom colleagues, are understood to have been briefed on the implications of the new rulebook by HSBC compliance staff in the weeks after the PRA and FCA outlined their regulatory framework at the end of July.

That explanation of the Senior Managers Regime is said to have prompted them to reconsider their roles as directors.

Mr Trueman is an experienced banker, having been a director of HSBC Bank plc since 2004 and previously the deputy chairman of SG Warburg.

Mr Thomson has a portfolio of jobs: since stepping down as finance director of Smiths Group, the FTSE 100 engineering business, he has become chairman of Hays, the recruitment agency, as well as Bodycote and Polypipe, two industrial groups.

HSBC's UK arm is the country's fourth-biggest lender, reporting a pre-tax profit of £3.3bn last year, and also manages some of its international assets in overseas markets.

HSBC and the PRA declined to comment on Tuesday.

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Cable Turns Up The Heat On All-Male Boards

By Mark Kleinman, City Editor

Britain's biggest pubs operator and one of the country's largest sportswear retailers are to be targeted by Vince Cable in a renewed focus on bolstering boardroom diversity.

Sky News understands that the Business Secretary plans to write to the chairmen of approximately 30 FTSE-350 companies which have all-male boards more than three years after an initiative was launched to increase the number of women directors.

Among those which continue to have only men on their boards are Enterprise Inns, JD Sports Fashion, 3i Infrastructure and HellermannTyton, an industrial group.

Since Glencore, the mining and commodities giant, became the last FTSE-100 company to appoint a female director earlier this year, the number of all-male boards among the next 250 largest businesses has fallen from almost 50 to 30.

Mr Cable is expected to express frustration that the remaining laggards have not done more to bolster diversity.

His latest intervention will coincide with the publication of a half-yearly progress report on female representation in boardrooms.

New figures due to be published on Thursday are likely to show that only a couple of dozen further appointments need to be made by FTSE-100 companies during the next 14 months in order to meet the original target of 25% female directors by the end of 2015.

The diversity initiative was spearheaded in 2011 by Lord Davies, the former Standard Chartered chairman and trade minister who is among the UK's most respected businessmen.

Mr Cable and Lord Davies have both backed a voluntary approach to the issue, arguing that quotas would do little to address challenges such as the number of women in senior executive posts at major companies.

The Business Secretary is now turning his attention to other areas of diversity in business, arguing recently that ethnic minority representation in boardrooms remains weak.

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Hewlett-Packard To Target 3D Printer Market

Hewlett-Packard has confirmed it will split itself into two companies, one focused on cloud computing services and the other focusing on 3D printing and computing.

The California-based company has made the announcement in the wake of thousands of job cuts in recent years.

It has struggled to maintain market share in the PC sector as consumers and business customers shifted towards mobile devices.

As a result, demand for its desktop, laptop and printer products have waned, reducing its sector presence.

The company said the PC and printer business will use the name HP Inc., while the data storage services business will take the name Hewlett-Packard Enterprise.

CEO Meg Whitman recently tried to run for political office

Current boss Meg Whitman is to be the president and CEO of the cloud division and Dion Weisler is to be the equivalent for the PC and printing division.

The company promised investors that the split would make them more competitive and better able to deliver shareholder value.

"Our work during the past three years has significantly strengthened our core businesses to the point where we can more aggressively go after the opportunities created by a rapidly changing market," Ms Whitman said.

"The decision to separate into two market-leading companies underscores our commitment to the turnaround plan.

"It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders."

HP has struggled in recent years amid the rise of mobile computing

HP Inc. will continue using the existing corporate logo with the cloud services choosing an alternative design.

In recent weeks HP has been running mainstream television advertisements highlighting its cloud storage and corporate solution-solving services.

The two new public companies are expected to be trading by the end of its 2015 fiscal year, and once complete HP stockholders will own shares of both companies.

HP is expected to complete the latest round of redundancies, between 11,000 to 16,000 people, this month - on top of the 34,000 people it had already cut from its payroll.

The news comes less than a week after eBay said it would spin off its lucrative payment system, PayPal, next year.

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TPG Eyes £2bn Bid For Tesco Clubcard Arm

By Mark Kleinman, City Editor

The private equity giant TPG is among a pack of suitors circling the marketing services group behind the rise of Tesco's pioneering Clubcard loyalty scheme.

Sky News has learnt that TPG, which is one of the world's biggest buyout firms, made an approach several months ago to Tesco about acquiring Dunnhumby, a wholly owned subsidiary that bankers say is worth well over £2bn.

Tesco is understood to be examining its continued ownership of Dunnhumby as part of a broader review of its business being led by Dave Lewis, its new chief executive.

The review was already under way prior to Tesco's shock disclosure last month that it had identified a £250m overstatement of its half-year profits, prompting the suspension of several executives and a share price slump which wiped billions of pounds from its value.

The crisis at Tesco has raised questions about the leadership of its chairman, Sir Richard Broadbent, and triggered investigations by the Financial Conduct Authority and Financial Reporting Council.

The results of a probe ordered by Mr Lewis could also lead to a further inquiry by the Serious Fraud Office.

On Monday, Tesco parachuted in a former chief executive of Ikea, the Swedish flatpack furniture retailer, and the current boss of catering group Compass, to counter accusations that its board lacked retail experience.

TPG's enquiry about a purchase of Dunnhumby came while Mr Lewis's predecessor, Philip Clarke, was still running Tesco prior to his ousting in July, according to a source.

While the UK's biggest retailer is understood to have rejected that initial approach, with no formal talks having taken place, insiders said that TPG remained interesting in the business.

Other private equity firms and big marketing services holding companies are also expected to join the bidding if a formal auction gets underway.

Some bankers believe that Dunnhumby, which is one of the world's leading providers of analysis of consumer behaviour, could be worth up to £3bn.

Dunnhumby was a crucial architect of Tesco's Clubcard scheme and the role it played in catapulting the supermarket chain into a market-leading position in the UK during the 1990s.

After Tesco took full control of the business in 2004, Dunnhumby expanded rapidly, signing up retailers around the world as clients and now counting companies such as Coca-Cola, Procter & Gamble and Shell as customers.

Dunnhumby was founded by Edwina Dunn and Clive Humby, a husband-and-wife team now regarded as having created one of the UK's most successful business start-ups of the last 25 years.

Earlier this year, Dunnhumby bought Sociomantic Labs, an advertising technology firm, for a price reported to be in the region of $200m.

TPG has a long track record of investing in retail business and supporting industries with past holdings including stakes in Debenhams, the department store chain, and Victoria Plumb, the bathroom products retailer.

Mr Lewis's review has already led him to conclude that Blinkbox, the video-streaming service, has no future at Tesco.

The grocer's businesses in Central Europe and Asia, its garden centres group in the UK, and its banking arm, are also candidates to be offloaded, analysts say.

Tesco and TPG declined to comment on Monday.

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US Jobless Rate Now At Lowest Since July 2008

The unemployment rate in the United States has dropped to 5.9%, the lowest level since July 2008.

The jobless rate dropped by 0.2% from the August figure.

Official data showed that the US economy created 248,000 non-farm jobs in September.

The Labor Department said employers added 69,000 more jobs in July and August, higher than the government had previously estimated.

It said job creation was strongest in the restaurant industry, health care, food and beverage stores and administrative services.

More modest additions were recorded in construction and government hiring.

The improved figures come after President Barack Obama touted his administration's economic achievements in a speech on Thursday.

The economy is one of the top issues in voters' minds as the November mid-term elections near.

The lower jobless rate, combined with the surge in hiring, could ratchet up pressure on the Federal Reserve to raise its benchmark interest rate earlier than expected.

Most economists have predicted that the Fed would start raising rates in mid-2015.

"This number will continue to support the notion that the economy is growing ... (but) isn't so strong that the Fed will raise rates anytime soon," Kingsview Asset Management portfolio manager Paul Nolte said.

With rate hike expectations mounting, the dollar pushed higher on foreign exchanges after the figures were published at 1.30pm BST.

Markets across Europe except Germany's DAX, which was closed for the day, jumped on release of the new data.

In broader economic news, officials said the US trade gap narrowed in August to $40.1bn (£25bn).

The Commerce Department said the revised figure was $200m (£125m) down on the first estimate.

Economists had expected the trade gap to have grown to $40.9bn.

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John Lewis Boss Sorry For 'Hopeless' France Jibe

The boss of the John Lewis Partnership has apologised to France after saying the country was "finished".

Managing director Andy Street held out an olive branch after a series of negative comments about the country were published on the front page of The Times.

He had made the critical comments at an event for entrepreneurs in London that included a competition for start-up businesses.

Mr Street described France as "sclerotic, hopeless and downbeat" and urged British business people with investments in the country "to get them out quickly".

He had said: "I have never been to a country more ill at ease … nothing works and worse, nobody cares about it."

Mr Street is the most senior executive in the partnership, which shares an equal percentage of profits among all workers.

He joked to the audience that an award given to the company at the World Retail Congress in Paris was "made of plastic and is frankly revolting".

"If I needed any further evidence of a country in in decline, here it is. Every time I (see it), I shall think 'God help France'."

However, on Friday, Mr Street said in a statement to Sky News that his comments "were supposed to be lighthearted views, and tongue in cheek".

He added: "On reflection I clearly went too far. I regret the comments and apologise unreservedly."

But the Gallic wrath may already be building, despite there being no John Lewis or Waitrose store presence in France.

After informing readers that Mr Street called the Eurostar terminal of Gard du Nord the "squalor pit of Europe", Les Echos called his comments "bitter and angry".

It then warned readers that John Lewis has plans to roll-out a website catering for French customers, with pricing in euros.

Les Echos then quipped: "The fuss is already assured."

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US Jobless Rate Now At Lowest Since July 2008

The unemployment rate in the United States has dropped to 5.9%, the lowest level since July 2008.

The jobless rate dropped by 0.2% from the August figure.

Official data showed that the US economy created 248,000 non-farm jobs in September.

The Labor Department said employers added 69,000 more jobs in July and August, higher than the government had previously estimated.

It said job creation was strongest in the restaurant industry, health care, food and beverage stores and administrative services.

More modest additions were recorded in construction and government hiring.

The improved figures come after President Barack Obama touted his administration's economic achievements in a speech on Thursday.

The economy is one of the top issues in voters' minds as the November mid-term elections near.

The lower jobless rate, combined with the surge in hiring, could ratchet up pressure on the Federal Reserve to raise its benchmark interest rate earlier than expected.

Most economists have predicted that the Fed would start raising rates in mid-2015.

"This number will continue to support the notion that the economy is growing ... (but) isn't so strong that the Fed will raise rates anytime soon," Kingsview Asset Management portfolio manager Paul Nolte said.

With rate hike expectations mounting, the dollar pushed higher on foreign exchanges after the figures were published at 1.30pm BST.

Markets across Europe except Germany's DAX, which was closed for the day, jumped on release of the new data.

In broader economic news, officials said the US trade gap narrowed in August to $40.1bn (£25bn).

The Commerce Department said the revised figure was $200m (£125m) down on the first estimate.

Economists had expected the trade gap to have grown to $40.9bn.

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John Lewis Boss Sorry For 'Hopeless' France Jibe

The boss of the John Lewis Partnership has apologised to France, after saying the country was "finished".

Managing director Andy Street held up an olive branch after a series of negative comments about the country were published on the front page of The Times.

He had made critical comments at an event for entrepreneurs in London that included a competition for start-up businesses.

Mr Street described France as "sclerotic, hopeless and downbeat," and urged British business people with investments in the country "to get them out quickly".

He had said: "I have never been to a country more ill at ease … nothing works and worse, nobody cares about it."

Mr Street is the most senior executive in the partnership, which shares an equal percentage of profits amongst all workers.

He joked to the audience that an award given to the company at the World Retail Congress in Paris was "made of plastic and is frankly revolting".

"If I needed any further evidence of a country in in decline, here it is. Every time I (see it), I shall think, 'God help France.'"

However, on Friday, Mr Street said in a statement to Sky News that his comments "were supposed to be lighthearted views, and tongue in cheek".

He added that "on reflection I clearly went too far. I regret the comments, and apologise unreservedly".

But the Gallic wrath may already be building, despite there being no John Lewis or Waitrose store presence in France.

After informing readers that Mr Street called the Eurostar terminal of Gard du Nord the "squalor pit of Europe", Les Echos called his comments "bitter and angry".

It then warned readers that John Lewis has plans to roll-out a website catering for French customers, with pricing in euros.

Les Echos then quipped: "The fuss is already assured."

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