Time for a recap.

Fears that the Brexit crisis could drive the UK into a recession have eased today. New GDP figures showed that the British economy grew by 0.2% in December-February, as factory demand surged on the back of pre-Brexit stockpiling.

Economists say the economy is showing unexpected resilience...but a no-deal Brexit could yet spark a downturn.

The news is a small boost for Theresa May, as she prepares to ask EU leaders for a longer Brexit extension. But while she just wants a couple of months, Europe could insist on a year!

The eurozone economy remains subdued, though, with European Central Bank chief Mario Draghi warning that risks remain to the downside. This has encouraged the ECB to leave interest rates on hold today, and probably for the rest of 2019 too.

In the City, shares in security firm G4S are up 20% ahead of a possible takeover bid.

Transport group Stagecoach are down 13%, though, after being banned from running several rail franchises in a row over pensions payments.

Pharmaceutical firm Indivior are being crushed, though, down over 70% after being indicted by a US grand jury over charges of illegally profiting from the US opioid crisis.

Q: Might you intervene and promote the merits of European Union in the run-up to European parliamentary elections?

Draghi say that central banks don’t usually get involved in elections (with good reason!), and it wouldn’t be right to intervene.

But on the broader point, the ECB president says the rise of global threats shows that European countries have “got to be together to be truly sovereign and masters of our destiny.”

Q: European leaders may grant the UK a longer Brexit extension today - would you welcome this?

Draghi says it depends whether the UK leaves the EU in a managed way, or a disorderly one. There could be serious consequences for eurozone companies, and supply chains, depending how Brexit plays out.

Brexit is part of a broader uncertainty hanging over the continent, he adds.

Over in Frankfurt, ECB president Mario Draghi is holding a press conference following today’s governing council meeting.

He confirms that the European Central Bank will leave interest rates on hold until at least the end of 2019.

But what about the ECB’s new TLTRO loans (a new stimulus measure announced last month)?

Draghi says details will be communicated at a forthcoming meeting (very helpful...), and that the ECB is looking into whether banks need more help to cope with negative interest rates.

Newsflash: The European Central Bank has pledged to leave interest rates unchanged until at least the end of 2019.

The ECB’s governing council has also voted to leave borrowing costs at their current record lows - no surprise, given the weak growth seen in the eurozone recently.

That means the benchmark interest rate remains at zero, while banks will be charged negative interest rates for leaving money with the central bank rather than lending it.

The ECB says:

At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively.

The Governing Council expects the key ECB interest rates to remain at their present levels at least through the end of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term.

John Hawksworth, chief economist at PwC, believes that stockpiling, and solid consumer demand, have helped Britain’s economy survive the political deadlock over Brexit.

Here’s his take on today’s growth report:

“Despite ongoing uncertainty over Brexit, the UK economy held up relatively well in February, with GDP growth of 0.2% compared to January. Services continued to grow at a moderate pace, while manufacturing output seems to have been boosted to some degree by pre-Brexit stockpiling since January.

The underlying trend over the past three months has been for GDP growth at an annualised rate of just over 1%. This is below trend and well down on the buoyant growth rates seen last summer, but there are no signs that Brexit-related uncertainty has pushed the economy as a whole into recession.

The main reason why the economy has held up is that while business investment has been falling over the past year, consumer spending has fared much better on the back of continued strong jobs growth and a steady pick-up in real earnings growth.

The signs are that, if current uncertainties over Brexit can be resolved in an orderly way, paving the way for a recovery in business investment, then UK growth could pick up later this year and into 2020. On this basis, our main scenario is for UK GDP growth of 1.1% in 2019 and 1.6% in 2020.”

The news that Britain’s economy expanded by 0.2% in February has been cautiously welcomed by economists.

Ian Stewart, chief economist at Deloitte, says the UK is showing a steely streak:

“The UK is proving more resilient than expected in the face of a global slowdown and Brexit headwinds. The pace of growth could be choppy, but the UK is likely to grow at about the same pace as the euro area this year.”

Pablo Shah, senior economist at the CEBR thinktank, warns that Brexit could still drag the economy down in 2019.

“Today’s figures provide a glimmer of hope that the UK economy has gained some momentum at the start 2019, despite the effects of a slowing global economy and crippling uncertainty. Cebr forecasts that the UK economy will grow by 1.2% over 2019, assuming that a modified version of the withdrawal agreement is passed in the coming weeks.

However, risks to this forecast are stacked to the downside, with a resolution this year to the current parliamentary gridlock by no means a given.”

Seamus Nevin, chief economist at Make UK, the manufacturers’ organisation, agrees that UK companies needs some relief from Brexit uncertainty:

“While the positive performance of manufacturing will come as a relief after months of concern survey anecdotal evidence suggests that the results may, once again, be due to no-deal Brexit contingency planning, stockpiling and declining export demand for UK goods rather than a sign the economic fundamentals are sound.

This, along with the increasing global economic slowdown again reinforces why British businesses need certainty on what form of Brexit the country is headed for. Business are trying to standstill until the Brexit fog clears but in doing so they are actually going backwards.”

Brexit stockpiling by nervous companies appears to have driven UK growth last month.

Industrial production jumped by 0.6% during February, driven by a 0.9% surge in manufacturing, today’s GDP report says.

The Office for National Statistics says it has seen “some qualitative evidence” that manufacturers have been boosting production ahead of Britain’s exit from the EU, saying:

Following a period of contraction, output in production and manufacturing has risen for the second month in a row, the latter driven by domestic demand. Manufacturing is now at its highest level since April 2008....

This was driven by pharmaceuticals, food products (including beverages) and chemicals, although it was partially offset by a fall in motor vehicle production.

Newsflash: Britain’s economy grew by 0.2% in February, better than many City economists had expected.

Over the last quarter, GDP grew by 0.3%.

More to follow....

Shares in UK pharmaceuticals firm Indivior are plunging this morning, after the firm was charged with fraudulently boosting demand for its opioid drug.

A US grand jury says Indivior illegally, and wrongly, told healthcare providers that its Suboxone Film, which contains the opioid buprenorphine, was better and safer than similar drugs.

The indictment says:

“Indivior illegally obtained billions of dollars in revenue from Suboxone Film prescriptions by deceiving health care providers and health care benefit programs into believing that Suboxone Film is safer and less susceptible to diversion and abuse than other, similar drugs.”

Indivior now faces twenty-eight felony counts - one count of conspiracy to commit mail, wire and health care fraud; one count of health care fraud; four counts of mail fraud; and twenty-two counts of wire fraud.

Shares in the firm, which was spun out of consumer good giant Reckitt Benckiser in 2014, have halved in early trading, from 105p to just 49p.

Currently, more than 130 Americans die every day after overdosing on opioids. The grand jury accuses Indivior of pushing patients towards doctors who prescribed opioids at high rates.

https://www.theguardian.com/us-news/2019/apr/09/opioid-addiction-indivior-indictment

Indivior insists that the allegations are “wholly unsupported by either the facts or the law”, and that it is committed to helping solve the US opioid crisis.

“Indivior has never deliberately diverted its product. The government claims that the company aided the careless and clinically unwarranted prescribing by doctors of SUBOXONE® products to too many people or in too high doses.

To the contrary, we have engaged in an extensive education campaign to teach doctors about recommended SUBOXONE® dosing limits and patient caps and have developed a process to identify concerning prescribers, going beyond what the law requires.

Indivior also flags up that the allegations relate to the time before it was demerged from Reckitt Benckiser -- whose shares are down 3.5% this morning, the biggest FTSE 100 faller.

Tesco chief Dave Lewis is in cheery mood this morning, after reporting that profits jumped by a third last year.

Four years after taking control of the company (and promptly reporting a £250m black hole in its accounts), Lewis is preparing to wave the ‘mission accomplished’ banner.

He says:

“After four years we have met or are about to meet the vast majority of our turnaround goals. “I’m very confident that we will complete the journey in 2019/20.”

Under Lewis’s watch Tesco has slashed prices, simplified its ranges, merged with wholesale chain Booker, and managed to grow market share despite the rise of discount rivals.

On the Brexit front, Lewis says Tesco isn’t seeing signs of significant stockpiling, but suspects customers are fatigued with the issue.

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

Today we discover how Britain’s economy performed in February, in the face of Brexit gridlock and weakness in the global economy.

February’s GDP report is due at 9.30am today. City economists have a range of guesstimates, from solid 0.3% growth to a chilling 0.2% contraction. But the consensus is that there was no growth at all during the month.

Service sector firms and industrial groups are expected to have grown slowly, while construction output may have shrunk.

This would mean the UK only grew by 0.2% in the last quarter, the same as a month ago, following a 0.4% contraction in December but 0.5% growth in January.

If so, that would suggest that Theresa May’s failure to get her Brexit deal through parliament has hurt the economy. Economic weakness in the eurozone, and the knock-on impact of the US-China trade dispute, would also be blamed.

This morning’s data is also expected to show Britain ran its traditional trade deficit in February, at around £3.9bn.

Analysts at TD Securities say:

“Underlying our forecast are small gains in services and IP offset by a contraction in construction.

Data in the coming months is likely to be choppy, and we would read little into a single month’s observation until Brexit uncertainty wanes.”

Also coming up today

Investors will be watching Frankfurt, where the European Central Bank holds a monetary policy meeting. Fireworks aren’t expected, though, as Lukman Otunuga, Research Analyst at FXTM, explains:

Mario Draghi and his fellow policymakers are expected to sit on their hands this month, with little room to maneuver amid significant headwinds.

While political tensions in France and Brexit uncertainties are beyond the central bank’s control, these factors have been highlighted by the IMF as putting downward pressure on growth, leaving the ECB to bide for time and watch how these risks manifest into the real economy.

They’ll then turn their attention to Brussels, where European leaders will tonight consider the UK’s latest Brexit extension request (a long delay looks likely).

On the corporate front, supermarket chain Tesco has just posted a near-30% rise in profits, as its turnaround plan bears fruit. UK retailers Dunelm and ASOS are also reporting results today.

The agenda

• 9.30am BST: UK GDP report for February
• 9.30am BST: UK trade and industrial production figures for February
• 12.45pm BST: European Central Bank interest rate decision
• 1.30pm BST: ECB press conference