Sterling has recovered from its worse levels but is still lower on the day, following renewed worries about the consequences of Brexit and talk of a second Scottish referendum.

The pound is currently down 0.34% at $1.2424 against the dollar having fallen as low as $1.2385. Against the euro, it is 0.67% lower at €1.1713. Against a basket of currencies, sterling is also on the slide:

On that note, we’re closing up for the day. Thanks for all your comments, and we’ll be back tomorrow.

Dennis de Jong, managing director at UFX.com, said:

The first set of durable goods figures from Donald Trump’s presidency show a rebound after a disappointing December, but there is still plenty of work ahead for the White House administration.

Trump has spoken at length about his plans to cut taxes and boost infrastructure spending in the manufacturing industry – but his camp is still very light on details.

While demand in American production rocketed after his shock election win, doubts continue to build over how many of his promises he’ll actually keep, which could see the often erratic durable goods market continue to wobble for the time being.

Back with the European business sentiment survey, and here’s a look at how confident various countries are:

And here’s the overall trend:

Billionaire US investor Warren Buffett - recently involved in the unsuccessful move by Kraft Heinz on Unilever - has been speaking on CNBC after his annual report to shareholders was released at the weekend.

He says his holding in Apple is now the second biggest stake in his Berkshire Hathaway company, and gave some views on the current state of the stock market.

The changes to compensation payments continue to hit shares in the insurers, and are also likely to see premiums rise and the NHS facing extra costs of an estimated £1bn. Patrick Collinson and Julia Kollewe report:

A “reckless” government-ordered change to the way personal injury awards are calculated will add as much as £75 to already fast-rising average car insurance premiums, and land the NHS with an annual £1bn bill, the insurance industry has warned.

The lord chancellor, Liz Truss, has announced a change to the so-called “Ogden” discount rate – which is used to calculate compensation awards for serious personal injuries – to ensure inflation does not erode the future value of a payout.

However, the unexpectedly deep cut in this rate, from 2.5% to -0.75%, has prompted a furious backlash, amid claims it will “over-compensate” victims of car crashes or medical incompetence in hospitals. The armed forces could also face far higher bills.

Mohammad Khan, insurance expert at PwC said: “As a direct result of this change, we anticipate an increase of £50-£75 on an average comprehensive motor insurance policy, with higher increases for younger and older drivers – potentially up to £1,000 for younger drivers (18-22-year-olds) and a rise of up to £300 for older drivers (over 65 years old).”

The Association of British Insurers (ABI) said the cut was “reckless in the extreme”. Huw Evans, its director general, said: “We have repeatedly warned the government that this could lead to very significant price rises, with younger drivers in particular likely to find it much harder to get affordable insurance. It is also a massive own goal that lands the NHS with a likely £1bn hike in compensation bills when it needs it the least.”

The full story is here:

Here’s ING economist Bert Colijn on the eurozone confidence figures:

While consumer confidence declined somewhat in February as inflation rates have recently increased, businesses continue to see sentiment improve. In manufacturing, new orders continued to improve significantly, while also the assessment of recent production has improved. The exports component also improved, indicating that the manufacturing sector is profiting from the recent weakening of the euro. In services, assessments of recent demand have surged, with expectations for future demand increasing as well. This shows that the first quarter could come in stronger than expected.

One of the main reasons for the current economic strength is the tailwind from the labour market. Businesses are hiring at the fastest pace in years, which is also confirmed by this release of the economic sentiment index. In February, the pace of hiring increased further in manufacturing. In services, recent job growth was slightly weaker than in January, but employment expectations for the coming months increased.

This shows that employers seem unfazed by the uncertainty coming from the packed political agenda in the Eurozone. Consumers may be less unnerved, their expectations for general economic conditions and future unemployment chances weakened in February.

Consumers also indicated a jump in recent price growth. While this matches the headline inflation rate jump, their expectations of future price growth also increased in February. This is in line with selling price expectations increasing in manufacturing and remaining at a high level in services. The question becomes when these survey indicators are going to cause an increase in the core inflation rate, which has been stagnant so far. We expect that this starts to translate in slightly higher core inflation in the coming months, but nothing that will boost the core rate anywhere near 2% for now. The ECB will present their latest macroeconomic forecasts next month and it will be interesting to see whether the recent bout of strong indicators has impacted their core inflation forecasts.

Eurozone confidence edged up in February, with positive views from industry and the service sector outweighing weakness among consumers and the retail area.

The European Commission’s monthly sentiment index rose from 107.9 in January to 108. A business confidence indicator rose from 0.76 points in January to 0.82, the highest level since June 2011.

Back with the insurers, and PWC have crunched the numbers and calculated how much the new regime would push up premiums.

Mohammad Khan, UK general insurance leader at PwC, said:

The Lord Chancellor’s announcement on the Ogden rate change to -0.75% was not anticipated by the insurance industry and is more than they were expecting. Unfortunately, this announcement will have a significant adverse impact on motor insurance prices that drivers pay and also commercial insurance rates paid by small businesses.

As a direct result of this change, we anticipate an increase of £50-£75 on an average comprehensive motor insurance policy, with higher increases for younger and older drivers – potentially up to £1,000 for younger drivers (18-22 year olds) and a rise of up to £300 for older drivers (over 65 years old).

This announcement, on top of the recent increases in insurance premium tax, will make redundant any savings to premiums as a result of the government’s personal injury legal reforms which were anticipated to generate approximately £40 saving per motor insurance policy...

The announcement will also impact reinsurance pricing by pushing prices up for motor and liability reinsurance cover. This may impact the business models of companies that rely on low layers of reinsurance who will be faced with much higher costs of doing business after they renew their reinsurance.

(Perhaps PWC should award the Lord Chancellor the Best Oscar for an unexpected announcement.... or perhaps not)

The weakness in the pound may not last despite the Times report (£) about a possible second Scottish referendum, says Lee Hardman, currency analyst at MUFG:

The report is highly speculative at the current juncture, and we doubt that it will have a lasting negative impact on the pound. Also, opinion polls have shown a modest increase in support for Scottish independence since the Brexit vote, but it remains far from clear that holding another referendum would have a different result. We still continue to expect the pound to strengthen in the coming months benefitting from rising political risk in Europe.

ING also believes the eurozone lending figures will not lead to the ECB changing policy yet. Its senior eurozone economist Bert Colijn said:

The current recovery in lending is no doubt related to the current loose monetary policy of the ECB. The cost of borrowing has come down to historical lows for both households and businesses, which in part drives the recovery of lending in the Eurozone. Still, with lending growth well below pre-crisis levels for the moment, it seems unlikely that the ECB will take as an argument to make changes to the QE program set out for 2017. Economic growth is picking up in the Eurozone for the moment and accelerating loan growth is underpinning that for the moment. This means that GDP growth may well have further upside in the coming months although political uncertainty continues to loom.

Some positive lending figures from the eurozone:

IHS Markit economist Archer adds:

The ECB will likely point to the January lending data as providing ongoing evidence that its monetary policy is providing valuable support to Eurozone growth and should not be changed any time soon – particularly as the Eurozone is yet to see a convincing upward trend in underlying inflation (it was stable at just 0.9% in January). Additionally, while the ECB is relatively upbeat on Eurozone growth prospects, it is very aware that there are appreciable uncertainties ahead, especially political ones (elections in Netherlands, France and Germany, the Brexit process starting and Trump’s presidency in the US)...

The ECB has set out its asset buying programme until the end of the year, and we suspect it will not re-visit it until late on in 2017, very possibly waiting until the German election is out of the way in September.

The pound is continuing to weaken, as worries about a second referendum in Scotland and concerns about the outcome of Brexit talks continue. Sterling is currently down 0.5% at $1.2402 against the dollar and 0.59% lower against the euro.

Over in Europe, markets have also opened brightly.

Germany’s Dax and France’s Cac are both up around 0.4%, with the pan-European Stoxx 600 up 0.1%. The banking sector was helped by a rally in Intesa Sanpaolo after the Italian bank said it had abandoned plans to take over insurer Generali.

The gains came despite a 3% drop in Deutsche Börse on new doubts about its planned merger with the London Stock Exchange.

The dip in the pound is of course good for the FTSE 100, which is packed full of dollar earners who benefit from a weaker sterling. Connor Campbell, financial analyst at Spreadex, said:

Brexit fears are back on the agenda this Monday morning, with the pound bearing the brunt of investors’ fretful trading.

Sterling fell 0.5% against the dollar and 0.6% against the euro as the day got underway, following on from the losses seen last Friday. The reason behind the pound’s morning wobbles seems to be speculation surrounding a second Scottish independence referendum, alongside Amber Rudd’s comments on Sunday that Brexit will ‘end freedom of movement as we know it’.

The currency’s slide was good news, however, for the FTSE, which rose around 20 points after the bell, though that increase still leaves the UK index adrift of its persistent 7300 resistance level.

Despite the dip in Asian markets, Europe is expected to open higher: