And back with Uber, here is our roundup of the tribunal’s comments, from Shane Hickey:

On that note, it’s time to close for the evening. Thanks for all your comments, and we’ll be back next week.

And on whether and when it might chance its views, S&P said:

We could lower the rating if we conclude that sterling will lose its status as a reserve currency or if public finances or GDP per capita weaken markedly beyond our current expectations. In addition, we could lower our ratings if significant constitutional issues arise and create further financial and economic uncertainty.

We could revise the outlook to stable if investment and economic growth remain above our expectations, while negotiations with the EU prove amicable and not significantly detrimental to the U.K.’s economy and trade.

S&P is also forecasting a slowdown in the UK from next year:

Given Brexit uncertainties and the likely fall in investment, we are forecasting a slowdown in 2017-2019, with GDP growth averaging 1%. The Bank of England’s asset purchase plan and the Monetary Policy Committee’s decision to reduce the base rate have helped growth in the short term, but we expect reduced investment to begin to weigh on growth over our forecast period.

Warming to its theme, S&P added:

The negative outlook reflects our opinion that the recent decision to exit the European Union (the destination for 44% of the U.K.’s goods and services exports) poses a potential risk to the U.K.’s national income, as well as its fiscal and external balances.

We also see heightened risks of a deterioration in external financing conditions in light of the U.K.’s high gross external financing requirements (as a share of current account receipts and usable reserves).

Complex and protracted negotiations between the U.K. and the EU could, in our opinion, pressure the U.K.’s financial services sector (which is a major contributor to employment and public receipts).

We also think Brexit could create challenging constitutional issues if it results in a second referendum on Scottish independence. Leaving the EU will also significantly diminish the U.K.’s capacity to influence EU policy on key sectors of the U.K. economy, such as financial services, that are vital to the U.K.’s economic performance.

Brexit could also, over time, diminish sterling’s role as a global reserve currency. Since the referendum, sterling has depreciated against the dollar by more than 17%, at one point reaching a 31-year low.

In early October, Prime Minister Theresa May announced that the government will invoke Article 50 of the EU’s Lisbon Treaty no later than March 2017. This decision will be followed by at least two years of negotiations on the terms of EU departure. While two years may suffice to negotiate a successor treaty that will have to be endorsed by European national parliaments and the European parliament, and could face referendums in one or more member states, the process could take much longer.

The risks of an inconclusive or detrimental outcome are also material. While some believe the U.K. can arrive at a beneficial agreement with the EU, others take the view that the remaining EU members will have no incentive to accommodate the U.K. Rather, their focus will be on detering other potential departures and containing the rise of their own national eurosceptic movements.

In particular, it is not clear if the EU will permit the U.K. access to the single market on existing tariff-free terms, or impose tariffs on U.K. products. Further arrangements regarding the export of services, including by the U.K.’s important financial services industry, are even more uncertain, in our view.

Given that curtailing immigration was a major motivating issue for leave voters, it is also uncertain whether the U.K. would agree to a trade deal that requires the country to accept the free movement of labor from the EU. The negotiation process is therefore fraught with potential challenges and vetos, making the outcome unpredictable.

We also believe that the divisions, both within the ruling Conservative Party and society as a whole over the European question, may not heal quickly and may hamper government stability and complicate policymaking on economic and other matters.

In addition, we take the view that the Scottish National Party will push for another referendum on Scottish independence, given that the Scottish population voted overwhelmingly in favor of remaining within the EU. Such a move will have consequences for the U.K.’s constitutional and economic integrity. Northern Ireland is another source of potential issues.

These multiple and significant challenges will be very demanding and will detract from macroeconomic goals, such as maintaining growth and consolidating public finances. The lack of clarity while negotiations ensue will also significantly deter private investment. At the same time, we continue to recognize many of the U.K.’s institutional strengths.

The U.K. benefits from its flexible and open economy and, in our view, has prospered as an EU member. We believe that the U.K. economy has been able to attract higher inflows of low-cost capital and skilled labor than it would have without the preferential access that EU membership delivers. In our opinion, significant net immigration into the U.K. over the past decade helped its economic performance. EU membership has also enhanced London’s position as a global financial center.

The ratings agency said:

In our opinion, Brexit presents a significant risk to the U.K.’s track record of strong economic performance, and to its large financial sector in particular. The leave result has also led to a less predictable and stable policy framework for the U.K...

The outlook remains negative, reflecting the continued institutional and economic uncertainty surrounding Brexit negotiations, and what arrangements will emerge post-departure.

So what effect could the Uber decision have on the gig economy? Crowley Woodford, employment partner at Ashurst, reckons a huge one:

This decision could be the beginning of the end for the gig economy as we know it and will have wide implications for a number of employers beyond Uber, inevitably leading to a flood of further claims.

Labour is tabling an amendment to the Digital Economy Bill, which is currently going through Parliament.

The amendment, if it is accepted on Tuesday, would extend employment rights to workers at firms like Uber who operate in the gig economy. The clause, tabled by shadow digital minister Louise Haigh, would change the law so that workers at companies who provide a service to customers through a digital ‘intermediary’ such as Uber are defined as employees of that business.

Today’s tribunal ruling only applies to Uber and the US-based company plans to challenge it anyway. Louise Haigh said: ‘This amendment will, for the first time, enshrine in statute the rights of workers in the digital economy; the right to be designated as employees and their right to sick and holiday pay so that if companies like Uber try to wriggle out of their responsibilities by appealing this extraordinarily welcome decision today, they will have nowhere to go.”

Here’s a piece from Frances O’Grady, general secretary of the TUC, on the Uber verdict:

And here’s a response from the government. A spokesperson for the Department for Business, Energy and Industrial Strategy, said:

The Government is committed to building an economy that works for all. We are keen to ensure our employment rules keep up to date to reflect new ways of working, and that’s why the Government has asked Matthew Taylor to conduct an independent review into modern working practices.

Clearer rules are needed to determine whether someone is an employee, a worker or self-employed, says Citizens Advice. Chief executive Gillian Guy said:

The fact it takes an employment tribunal to decide whether these drivers are self-employed shows that proving employment status is an extremely complicated and costly process. For many people struggling at the sharp end of insecure work, such as in false self-employment, taking such a case is simply not an option - not least because of employment tribunal fees of up to £1,200. To address this Citizens Advice is keen the government considers introducing an effective online test people could use which would determine their employment status.

It is encouraging to see the government is keen to tackle the challenges brought by insecure work. It’s very positive that the Prime Minister has announced an independent review of modern employment and that the Business, Energy and Industrial Strategy (BEIS) committee is to investigate the rights and treatment of non-permanent staff.

The full Uber judgement and the reasons for the decision are online here.

The courts have done their job with the Uber ruling but the UK Parliament will have to step in to set laws for the new economy, says Torsten Bell at the Resolution Foundation:

As a country we have two ways of resolving legal uncertainty – our courts and Parliament. The first of these has done its work today, and will be called up to do so again on this and related topics in the years ahead. But in the end it is Parliament’s job to opine on how our law should be updated to respond to developments in the real world. That’s why it’s good that both the Business Select Committee and the government themselves have launched reviews of existing employment legislation, although as with all reviews it’s what is actually done with them that matters.

New technology is by and large a good thing – but the old fashioned wish for certainty in what the law means for the jobs we do, pounds we earn and tax we pay remains as important as ever. The courts can do their bit to interpret our law in the face of changes, but in the end it is for government and Parliament to give us a law fit for that new world.

The full piece is here.

Not just minium wage and holiday pay, but also a company pension could be on the cards for Uber drivers after the tribunal decision. Tom McPhail, head of retirement policy at Hargreaves Lansdown, said:

This is great news for anyone working in the gig economy as it means they are more likely to be eligible for a workplace pension, with all the attendant benefits and in particular the highly valuable employer contribution. It is also going to be a challenge for Uber and employers like them, in deciding what specific pension terms they want to offer their employees. They have some latitude on earnings definitions and deferral periods but however they deal with this, it is going to cost them time and money.

Back with Uber, and the tribunal decision must not discourage firms from using the self-employed, according to trade body IPSE.

Chris Bryce, chief executive of the Association of Independent Professionals and the Self Employed, said:

Today’s decision gives Uber drivers clarity around their relationship with Uber, subject to Uber’s intended appeal. As far as IPSE is concerned self-employment means you’re in control, and that must remain a positive choice. If companies want to control exactly how or when their workers do the actual work, they must not shirk their responsibility to provide employment protections and pay their employer’s National Insurance Contributions too. If they want to engage workers on a freelance basis, then they must be business-like in that relationship.

We will be studying the full judgement carefully to consider its implications, but this ruling may have an impact on the wider gig economy. The recently launched review of employment practices takes on even greater urgency and importance in light of today’s ruling.

However, Government must be careful not to dissuade firms from making use of the highly-skilled, on-demand flexible workforce as a whole. The vast majority of people who work this way made an active choice to do so and cherish their self-employed status.

Athough... here is a sign of a weaker US economy.

The University of Michigan consumer confidence index has come in weaker than expected at 87.2 in October. This is lower than the initial estimate of 87.9 and forecasts of 88.1, and is well below September’s figure of 91.2.

Although Uber is appealing the tribunal decision, a number of commentators have said it could open the door to further claims. Alan Price, employment law director at advisory group Peninsula, said:

Whilst this decision is only at employment tribunal level... the case could have large consequences for businesses run on a similar model. There is already a related claim supported by a different union in the pipeline against the courier firm City Sprint. Not only could this decision lead to an influx of tribunal claims, but it can lead to large financial penalties for businesses who have not given staff their correct legal rights.

Aye Limbin Glassey, employment partner at Shakespeare Martineau, said:

The ruling will not only impact Uber but a whole number of other industries and businesses which use self-employed workers. It is by no means the end of the issue - continued pressure from trade unions calling for tighter regulations means that the Uber ruling will likely be a catalyst for further scrutiny.

The very nature of a business like Uber is the flexibility it offers. However, employment practices cannot be left unregulated and rights of workers and employees cannot be ignored unless businesses are willing and ready to face the backlash of legal and reputational repercussions. It is stark reality that the application of employment rights will often mean that companies are unable to adopt the agility needed to support its success.

With consumer convenience the driver of many fast-growing businesses, it is likely that we’ll see more businesses of this nature coming to market and using self-employed workers will become a greater concern for companies.

Here’s our report on the Uber verdict, from Hilary Osborne:

Drivers for Uber have won a landmark case after employment tribunal judges ruled that they were not self-employed and should be paid the national living wage.

The case could open up the technology firm to claims from all of its 40,000 drivers in the UK, and force other companies in the so-called gig economy to review the way that they are employing staff. It is likely that the firm will appeal against the finding.

The ride hailing app had argued that the drivers were independent contractors who are self-employed and can choose where and when they work.

But an employment tribunal in London found that this was not the case.

The full story is here:

The Uber ruling is disappointing for its 40,000 drivers and consumers alike, according to the Adam Smith Institute. Sam Dumitriu, head of projects at the think tank, said:

Nearly 80% of Uber drivers preferred being self-employed and being their own boss, saying in a recent poll that they wouldn’t trade that status for some of the benefits like holiday pay, pension contributions and the National Minimum Wage.

Uber drivers typically earn well above the National Living Wage. Across the UK, the average driver earns £16 an hour, that’s after Uber has taken their commission, but before you factor in extra costs like insurance, petrol and car payments. One you factor that in it comes to around £12 an hour, still well above the minimum wage. It’s higher for drivers in London and it’s higher for drivers who work at peak times like Saturday evening.

Consumers will see prices rise and a less stable, predictable service. And this doesn’t just hit Uber. It threatens other new business models like Deliveroo and Amazon Prime Now.

The Uber ruling could trigger a wave of claims from workers at other companies.

Frank Ryan, employment lawyer at legal firm Vardags, says:

“This is a landmark decision which is guaranteed to have widespread implications: for Uber itself, its workers, the paying public, black cab drivers and other workers in the so called gig economy. While each case turns on its own facts, this is essentially a green light for others in the gig economy to come forward and make similar claims.

Ryan also argues that consumers could end up paying more for cab rides:

While potentially good news for black cab drivers, who have always struggled to compete with Uber and who will already have been encouraged by the Mayor of London’s package of reforms for the taxi sector, it’s ultimately bad news for the consumer. It is surely unavoidable that Uber will look to pass the resultant increased costs onto the paying customer.

The US economy has regained momentum, says Paul Ashworth, chief US economist at Capital Economics.

He writes:

The stand-out in the third quarter was the 10.0% surge in exports. Admittedly, some of that surge was due to a one-off spike in soybean exports, which will be reversed in the fourth quarter, but it is still a welcome sign that the dollar appreciation in 2014 and 2015 is no longer weighing on exporters. Overall, net exports added 0.8% points to GDP growth. After being a sizeable drag on growth for the preceding five quarters, inventories added a further 0.6% points.

But....Ashworth also points out that not everything was rosy:

Consumption growth slowed to 2.1%, residential investment contracted by 6.2% and equipment investment fell by 2.7%

Paul Sirani, chief market analyst at City trading firm Xtrade, believes US interest rates are now likely to rise in December.

“The last time US GDP growth surged past two per cent the Federal Reserve raised interest rates. With today’s numbers flying above that watermark, history may be about to repeat itself.

“The world’s largest economy is being fuelled by a buoyant jobs market, strong levels of consumer spending and healthy trade. If the indicators continue to point upwards for the US then Fed Chair Janet Yellen will look to stop things boiling over.

“Many believe that today’s big bump in growth will assure a December rate rise, but with a US election just weeks away, nothing is certain.”

What does this stronger growth mean for US interest rates?

On balance, you’d expect that stronger growth raises the chances that the Federal Reserve hikes borrowing costs at its December meeting.

Investor Adrial Miller thinks to:

But....Anna Stupnytska, global economist at Fidelity International, argues that some Fed policymakers could make a case for holding rates again:

At 2.9%, the US economy has just posted its strongest growth rate in two years!

That should be a boost for the Democratic Party, as they head into November’s elections.

More detail...

Business fixed investment (in, say, factories) rose by an annual rate of 1.2%. However, spending on new equipment dropped by 2.7%; the fourth quarter running where companies cut back.

Government spending picked up a little, adding 0.09% to the GDP rate.

Some instant reaction to the better-than-expected US growth figures:

What should we watch out for in the US GDP report? Here’s some ideas:

• Will growth burst over the 2% mark, and even threaten 3%?
• Will consumer spending continue to drive growth?
• Will businesses keep spending on research and intellectual property? R&D spending spiked sharply in the second quarter, so it could have faded.
• Will companies restock their inventories? They ran them down in Q2, which held back growth
• Will government spending fall? It did earlier this year - another reason Q2 growth was weak.

This preview has more details:

Although we’ve had French, Spanish and Austrian GDP today, we have to wait until Monday to learn how the wider eurozone fared over the summer.

Economists are predicting another quarter of unspectacular growth, of around 0.3%.

A lot depends on Germany and Italy, of course, and their GDP report isn’t formally released until November 15!

Howard Archer of IHS Global Insight has some predictions:

We expect German GDP expansion to have come in at 0.3-0.4% quarter-on-quarter, which would be in line with the 0.4% quarter-on-quarter expansion seen in the second quarter.

Additionally, we expect Italian GDP to have crept up just 0.1% quarter-on-quarter having been flat in the second quarter.

Austria’s economy has racked up another quarter of solid growth, with GDP increasing by 0.4% in the July-to-September period.

That’s up from 0.3% in Q2, with consumer spending pushing growth higher.

Heads up (2): Rating agency Standard & Poor’s is expected to publish a review of the UK’s credit rating tonight.

We’re not expecting any major action, as little has really changed since the EU referendum. But you never know....

S&P hit the UK with a double-notch downgrade on the Monday following the Brexit vote (just as the English team exited the European Championship ignominiously with a defeat to mighty Iceland).

Jordan Rochester of Nomura says:

The rating.. is perhaps unlikely to be changed today given the S&P’s stated criteria as to what would lead to a downgrade further have not yet taken place (public finances to deteriorate, GDP per capita to fall, GBP to lose its reserve currency status, Scottish Referendum “the sequel” or other significant constitutional issues)

Heads up (1): A court will rule this afternoon whether taxi-app firm Uber has breached UK law and not provided drivers with basic employment rights.

The case goes to the heart of the ‘gig’ economy; Uber argues that the drivers are self-employed, while unions say that they are effectively employed by Uber, so are entitled to holiday pay, sick pay, a guaranteed minimum wage and breaks.

The ruling is due at 2pm BST.....

The pound remains subdued this morning, up just 0.15% at $1.218.

That’s almost 18% below its pre-referendum values, which is now feeding into import costs...

The Spanish GDP report is online here.

More reaction, from Bloomberg economist Maxime Sbaihi:

Economists are disappointed that France didn’t grow faster in the last quarter.

Here’s Holger Sandte of Nordea Market:

Bloomberg are also underwhelmed (and also flag up that we should get Spanish GDP today too).

Disappointingly, France’s annual growth rate has dipped to 1.1%:

France’s economy has been quite bumpy over the last two years, as this graph shows:

And growth of 0.2% may not be enough to restore confidence in president Francois Hollande, with a general election looming next year

Over on fastFT, Nathalie Thomas says:

The deep unpopularity of Mr Hollande, amid weak growth and still high unemployment relative to many of France’s EU peers, has prompted a desperate search among the country’s socialists for an alternative candidate who could possibly be fielded at next year’s elections, with the idea of the incumbent president not seeking a second term becoming more palatable.