Despite the Dow Jones Industrial Average slipping back after several days of gains, European markets ended the day in positive territory. The UK market was helped by weaker than expected inflation figures, which pushed back the chances of an interest rate rise from the Bank of England. Joshua Mahony, market analyst at IG, said:

Stock markets rose once more today, as hopes of a high growth period based on substantial fiscal stimulus continued to stoke the embers of last week’s US election... we have seen energy stocks grab some respite today, as crude prices rose in the wake of a fresh charge from OPEC to find a means to ensure the output cut comes to fruition.

The final scores in Europe showed:

• The FTSE 100 finished up 39.56 points or 0.59% at 6792.74
• Germany’s Dax rose 0.39% to 10,735.14
• France’s Cac closed up 0.62% at 4536.53
• Italy’s FTSE MIB was virtually unchanged, down just 0.02% at 16,682.37
• Spain’s Ibex ended up 0.33% at 8687.1
• In Greece, the Athens market dipped 0.29% at 578.17

On Wall Street, the Dow Jones Industrial Average is currently down 26 points or 0.14%.

After six straight days of rises, the Dow Jones Industrial Average is pausing for breathe.

It is currently down 26 points or 0.15%, but the S&P 500 and Nasdaq both moved higher at the open.

Back to Greece again, where the US president has begun his farewell tour of Europe. Our correspondent Helena Smith reports:

Barack Obama may be visiting Athens at the end of his time in office but the outgoing US leader has not disappointed. Barely three hours after he touched down in a Greek capital rendered almost unrecognizable by draconian security, Obama said the three words Greek officials have wanted the world leader to utter: debt, austerity and solidarity. “I will continue to underline that austerity alone cannot deliver prosperity,” he told the Greek prime minister Alexis Tsipras after being greeted by the debt-stricken country’s head of state and the rousing tones of a military honour band. “Debt relief is needed.”

Earlier he had said: “Greece has gone through very challenging and dramatic times over the last several years. We are glad to see that progress is being made, although we recognise that there are significant challenges ahead, and we intend to stand shoulder to shoulder with the Greek people throughout this process. “

Athens’ leftist led government has made little secret that it hopes the US president’s open display of support will resonate with Germany and other partners in Europe which have footed the bill of the nation’s massive bailouts but demanded punishing belt-tightening in return. “We consider this visit will contribute to the effort to reduce Greece’s debt, its spokesman said ahead of the leader’s arrival. “The US president has repeatedly stated he wants to solve this huge issue before he leaves office.”

Obama, only the fourth American leader to visit the country since its foundation nearly 200 years ago, heads to Berlin once his 29-hour sojourn in Athens ends on Wednesday.

Tsipras is pushing EU partners to agree to a debt deal by the end of the year. At around €330bn, or 180 percent of GDP, Greece’s debt pile is not only regarded as unsustainable but perhaps the biggest impediment to its economic recovery.

Without the load being partially forgiven, Tsipras’ Syriza-dominated government says it will be high-nigh impossible to get out of the death spiral in which the recession-ravaged economy now finds itself.

Obama, who also spoke of the importance of reforms in making the Greek economy more competitive, emphasized the significance of a “strong, prosperous and unified Europe … not just for the people of Europe but for the whole world and the US.”

This is the first time a sitting US president has elected to visit Greece on its own. On previous occasions Turkey has also been included in the tour. But Obama, who is accompanied by his Secretary of Treasury Jack Lew and Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland, is believed to have wanted to make the trip for a long time. “It was a personal choice,” said the defense minister Panos Kammenos speaking to a local radio station after welcoming the leader at Athens’ international airport. The symbolism of Athens being the birthplace of democracy also played a significant role for a president now determined to allay the fears of European leaders following the election of his successor Donald Trump last week.

At a press conference following 90-minute talks with Obama, the Greek prime minister said it was vital that Greeks began to feel the effects of the sacrifices they have made in recent years.

“After seven years the Greek people cannot bear any more austerity,” he told reporters. “Greece deserves debt relief and the time is now. President Obama and I discussed a number of issues specifically the important potential of investment in Greece and the future of Greece with its shipping power becoming an important centre for trade, transport and energy.”

While Mark Carney was delighting MPs by doling out party invitations, the US released better than forecast retail sales figures for October.

According to the Commerce Department, retail sales rose 0.8% last month compared to September, with a particularly strong performance from the car industry. On top of that, building materials were also in demand, perhaps due to households hit by Hurricane Matthew having to rebuild and repair damage. The year on year rise was 4.3%.

Analysts had forecast a month on month rise of 0.6% in October. Meanwhile September’s figure was revised upwards from 0.6% to 1%. The combined gain in September and October was the biggest two month gain since early 2014.

Mark Carney was on rather jolly form as he faced MPs today, perhaps happy that the issue of his term length was finally resolved last month. But what did we actually learn?

1) Central Banks are fighting their corner, as TrumpWorld approaches.

Carney was repeatedly adamant that central bankers aren’t responsible for the inequality and low growth that has helped to drive Donald Trump to power, and also helped to cause Brexit.

He insisted that broader issues are in play, and only politicians can fight them, saying:

I think it is very important to distinguish between the stance of monetary policy and the reasons why global interest rates are low, the reasons why inequality have increased across major economies.

The last two are caused by much more fundamental factors and an excessive focus on monetary policy in many respects is a massive blame deflection exercise.

Donald Trump argues that his tax cuts and infrastructure spending plans will actually have an effect here, creating the conditions for higher growth and borrowing costs.

Carney may be offer his US counterpart, Janet Yellen, a lifeline -- given Trump’s warning that he won’t offer her a second term at the Fed.

Central bank independence looks shaky; Carney is reminding us that central bankers have been clearing up quite a mess since 2008.

2) Carney won’t be swayed to stay longer

We can safely assume now that governor will flying back to Canada in July 2019 to be reunited with his family.

Even if Brexit turns into a dogs dinner, and isn’t finished by March 2019, Carney won’t do more than the extra 12 months he signed up for.

There is a practical reality, which is I’ll be separated from my family for that extra period of extension so there are limits, reasonable limits to what that would be.

I will leave June 30th 2019.

3) Don’t get used to falling inflation

Carney was reminded that inflation surprisingly fell this morning, to 0.9%. His message -- don’t expect prices to remain low in 2017, given the pound’s weakness.

Inflation is going up.

The pass through from a 20 percent fall in the trade weighted level of sterling is going to come,it’s going to build towards the end of this year into 2017 and in our expectation, be above 2 percent by the middle of 2017 and stay there for a while because of that pass through.

4) Businesses are getting the Brexit jitters

A Bank survey has found that 45% of Uk firms have seen their investment plans affected by Brexit; half of those companies have put spending plans on ice.

And Carney also predicted that financial firms could start triggering their contingency plans when there is 18 months to go until Brexit, if they don’t like the look of the new deal.

He said:

If the time to exit is measured in 18 months or less and the degree of exit is viewed as considerable then a number of those firms would take decisions, that’s the best guidance I can give.

5) The Bank of England’s Christmas Party will be a cracker

Jacob Rees-Mogg MP has pushed for Mark Carney to get the sack, so it’s nice to see that the two men have made up.

The governor has invited one of his sternest critics to the Bank’s swanky Christmas bash, along with the rest of the committee too (chairman Andrew Tyrie is planning to drag along a few officials too, so the Bank had better lay on extra nibbles).

And finally, Steve Baker tries to get himself swiftly dis-invited from the Bank of England Christmas party, by asking:

Q: Have you lost the plot?

MPC member Ian McCafferty denies it -- the bank acted on the best data possible after the Brexit vote, and have been responding to events first.

Baker clarifies that he’s actually quoting William Hague (former foreign secretary), who recently claimed that central bankers were pumping up a new bubble and keeping rates too low.

Q: You have explained that unemployment would be higher if interest rates rise, so aren’t you making “highly political decisions”?

No, Carney insists. We’re following our mandate (to maintain inflation around 2% in the medium term).

And he then suggests that there’s a dangerous theory that central bankers should thrown down a challenge to elected leaders:

I do not accept the line of thought that central banks should not focus on their remit. They should tighten policy in order to force governments to take tough decisions.

That’s straying from the mandate. That’s political.

Q: Won’t there be a huge crash when rates rise, having been left low for so long?

Deputy governor Minouche Shafik argues that the Bank doesn’t set the interest rate that the UK economy needs.

And there would be “very big economic costs” to pay if rates were raised now.

Finally, Jacob Rees-Mogg gets to question the Bank of England.

Rees-Mogg is one of Mark Carney’s toughest critics, and recently suggested the governor should resign for his comments before the Brexit vote.

Everyone leans forward to hear what zingers Rees-Mogg will send down,....

Q: I must start by thanking you, governor, for inviting me to the Bank of England Christmas Party, it’s very gracious, so thank you very much.

Well, it is the season, grins Carney.

Immediately, Steve Baker MP catches the governor’s eye - perhaps keen on some canapés and champers - and Carney finds himself inviting the whole committee along!

Q: What steps is Britain’s financial sector taking for Brexit?

Carney says that firms in the core of the financial sector, such as banks and insurance firms, are making contingency plans.

But “very few of them are actually implementing contingency plans”.

And he urges business leaders to sit tight.

As they follow those plans, hard decisions will be taken.

But I would stress, to those firms, that it is very early days. So planning makes sense, action is in general precipitous.

John Mann: How can the Bank of England plan for Brexit when no-one knows what it will mean?

We certainly don’t know what the eventual shape of Brexit will be, agrees MPC member Michael Saunders.

Q: So how can you be doing your job if you’re not having regular updates from the government, and some indication over where Brexit is going?

Carney suggsts there’s no reason to panic. This is “all to play for”, so we’ve drawn up a central forecast based on the likelihood of events.

And we are available for technocratic support to the government, if they need it.

Mann then reveals that he’s polled his constituents about Brexit; most of them want immigration controls to be part of the discussion, but only a small minority want to leave the single market, so..

Q: Surely you should be providing expert analysis of these options, and keeping us informed?

The proper role for the MPC is to make its forecasts, and identify material risks to that forecasts, Carney replies.

Tyrie mischievously turns Carney’s attention over the Atlantic, suggesting that Donald Trump and Theresa May share the same concerns over central banks.

Q: Trump has been “pretty critical of the Fed”, hasn’t he?

The president elect has voiced some views on central banks, Mark Carney replies. But the issues facing the Fed and the Bank of England are different, so it’s not a straight comparison.

And Carney then lets rip at critics who blame central bankers for everything:

It’s very important to distinguish between the stance of monetary policy and the reasons why global interest rates are low, the reasons why inequality has increased across major economics.

Those are caused by much more fundamental factors. And an excessive focus on monetary policy in many respects is a massive blame deflection exercise.

Mark Carney’s grilling at the Treasury Committee is underway.

Chairman Andrew Tyrie asks the Bank of England governor how much uncertainty has been caused by his decision to initially only serve five years, and then extend it by 12 months. Wouldn’t it be better to keep governors to fixed terms of eight years?

Carney says it is a great privilege and a great responsibility to serve at the Bank of England. He had planned to only do a five year term, but was then asked to do an extra three years.

Q: So you were asked to extend it to eight years, but only chose to add on 12 months?

Yes, says Carney.

Q: What happens if the process of triggering article 50 takes longer than expected, and isn’t complete by the end of June 2019 (when Carney’s six-year term ends)?

I have a family, Carney explains, and there are “reasonable limits” to how long he can be separated from them (the governor’s wife, Diane and their four daughters plan to return to Canada in 2018).

Carney says he added one year to his term “out of a sense of responsibility”

Theresa May has made it clear that she plans to trigger article 50 by March 2017, he says, so Britain should have left the EU by March 2019.

But he won’t speculate about hypothetical scenarios, and he doesn’t want his departure date to be seen as a ‘judgement’ on the Brexit timetable.

Tyrie won’t let this lie, demanding to know....

Q: Are you definitely, irrevocably, leaving the bank in 2019?

It sounds like you want to get rid of me, jokes Carney.

And then he insists that he will indeed leave the BoE on 30 June 2019.

A string of economist are predicting that Britain’s inflation rate will keep rising in the months ahead, despite dropping to 0.9% in October.

Tom Stevenson, investment director for personal investing at Fidelity International, says

“The expected rise in inflation paused for breath today as higher fuel prices were offset by slower rises in the price of clothes and university fees and cheaper hotel stays.

“Against all expectations, the CPI rose by just 0.9% in the year to October, slightly lower than September’s 1% increase. However prices are still rising faster than at any time since late 2014. The rise in prices continue to be driven by sterling’s recent weakness which has raised the cost of imported fuel and food.

“Consumers can expect UK inflation to continue rising into next year as the impact of the pound’s slide continues to be felt. The conventional wisdom is that the Bank of England’s 2% inflation target will be left behind in 2017.

Jeremy Cook of World First, the currency exchange firm predicts sharp prices rises in 2017:

In our estimates it will be the early part of the New Year that sees the majority of the price rises. Retailers are some of the smartest companies out there and they know it would be suicide to hike prices now pre-Christmas.

Of course, the tightness of budgets in the retail environment means that any price rises are going to be painful – and low cost operators and discounters will be ready to pounce - but they will have to come or we will likely see additional seasonal and structural unemployment increases in 2017.”

Neil Wilson of ETX Capital is concerned by the jump in input prices (see earlier post)

While inflation eased last month there is a ticking time bomb in the PPI data, which measures the costs of goods for manufacturers. And here there is a sign that much higher consumer inflation is on its way.

The ONS data showed factory gate prices for goods produced by UK manufacturers rose 2.1% in the year to October 2016, which was a sharp jump from the 1.3% in the year to September 2016.

Core input prices were up 9.9% in the year to October 2016, versus a rise of 5.1% in the year to September 2016.

Howard Archer of IHS Global Insight agrees:

Today’s figures also show that Britain’s manufacturers are suffering from a hefty dose of inflation, due to the weak pound.

Britain’s Producer Prices index spiked by 4.6% in October - the biggest monthly rise on record.

UK firms are suffering from the weakness in sterling since June’s referendum, which is making raw materials and fuel much pricier.

At present, retailers appear to be absorbing the cost rather than passing it onto consumers.

But with imported goods prices surging, they may not be able to keep shop prices down for much longer....

This chart shows how Britain’s CPI rate dipped, after jumping in September:

This chart shows how clothing, recreation and educational all pulled inflation back:

And this one shows how transport costs, including petrol, have jumped over the last year:

Breaking! Britain’s inflation rate has fallen!

The consumer prices index only rose by 0.9% in October, new figures show, compared with 1.0% in September.

That’s a surprise; economists had expected CPI to rise to 1.1%.

More to follow....

Here’s Fiona Cincotta of City Index explaining why the bond market rout has taken a break this morning:

The turmoil in the bond market appears to be pausing for breath, which is quite typical after the moves we have seen.

The global bond market has sold off at an extraordinary rate since Trump won the presidential race 6 days ago and is currently on track for its worst monthly decline since 2003.

Debt prices have fallen sharply as investors contemplate a world of higher inflation, increasing interest rate and political uncertainty, however this sell off is now showing signs of slowing. It almost seems ironic that Yellen & co. have been trying to steepen the yield curve for years and yet Trump achieved it in a few days.

The challenge is that if this can happen in conjunction with a strengthening economy, if achieved then it could be good news. However, apart from campaign rhetoric we still know very little about Trump’s actual plans.

Good news from Italy! Its economy has returned to growth, with GDP expanding by 0.3% in the last quarter.

That means the Italian economy has beaten expectations - and beaten Germany, whose 0.2% growth rate looks even more sluggish now.

On an annual basis, Italy’s economy was 0.9% larger than a year ago -- up from 0.7% in the second quarter.

This is a much-needed boost for Matteo Renzi, as the prime minister faces a crunch referendum over constitutional reforms in December.

Economists are blaming Germany’s slowdown on the impact of Britain’s vote to leave the EU.

The slump in the pound since June has made German goods less competitive in Britain, and also dented confidence across the global economy. So this would explain why exports fell between July and September, pulling German growth down to 0.2%.

ING’s Carsten Brzeski says the Brexit vote undermined Germany’s economic strength:

“Brexit meets solid domestic economy. This is probably the best description of the German economic performance during the third quarter.”

Brzeski is also concerned that president-elect Trump could also hurt global trade:

“If Germany’s single most important trading partner, the U.S., really moves towards more protectionism, this would definitely leave its mark on German growth.”

DekaBank analyst Andreas Scheuerle hopes that German growth will bounce back in the October to December quarter:

“One had expected a little more economic activity in the third quarter. But the signs for the final quarter are looking good.

Britain’s FTSE 100 index has jumped by 46 point at the start of trading.

Supermarket group Tesco has jumped by 3%, after new data shows sales growing at their fastest rate since 2013:

Mining shares are leading the fallers, though, down at least 3%.

That follows several days of gains, driven by the prospect of Donald Trump’s plans to rebuild US infrastructure.

Germany’s weak performance may drag down the wider eurozone growth rate, which is published at 10am.

Figures released earlier this month suggested euro area GDP expanded by 0.3%, but Holger Sandte of Nordea Markets fears that could be too optimistic.

Here’s ING’s Carsten Brzeski:

And Holger Zschaepitz of Die Welt shows how Germany’s economy has slowed through the year.

Bad news: Germany’s economy has suffered a surprise slowdown, with growth halving in the last three months as foreign trade waned.

The eurozone’s largest economy only expanded by 0.2% in the third quarter of this year, figures just released show.

That’s down from 0.4% in April-June, and 0.7% in January-March.

Economists had expected German GDP to rise by 0.3% in July to September.

Statistics firm Destatis blamed a fall in exports for the slowdown, saying:

Foreign trade had a downward effect on growth. Exports were slightly down while imports were slightly up compared with the second quarter of 2016.

Household spending drove growth during the quarter. But companies also spent less on new machinery and equipment during the last quarter, although construction output rose.

As this charts hows, year-on-year growth also fell sharply to 1.5%, from 3.1% in the second quarter.

This means that Germany performed rather weaker than Britain, which grew by 0.5% in the quarter, or the US which expanded by 0.7% (or an annualised rate of 2.9%).

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

There’s lots happening today, both in the financial world and the markets.

At 9.30am, we get the latest UK inflation report. It’s likely to show that the cost of living jumped again in October, to 1.1%, up from 1% in September, as the weak pound drive up import costs.

Bank of England governor Mark Carney is then due before parliament’s Treasury committee at 10am. This will be Carney’s first appearance since he agreed to serve an extra year.

Expect lots of questions about whether the Bank was too gloomy and alarmist about the Brexit vote, having raised its 2017 growth forecast.

We get a new healthcheck on the eurozone economy this morning, with the first estimate of German (7am) and Italian GDP (9am) over the last quarter.

We’ll also be watching the bond markets closely, after prices fell sharply yesterday as investors anticipate higher inflation and growth once Donald Trump becomes US president.

As Larry Elliott explains:

Fears about the inflationary potential of Donald Trump’s planned tax cuts and infrastructure spending have sent shock waves through the world’s bond markets, as investors take fright at the prospect of higher than expected interest rates in the years ahead.

Central banks are braced to suffer fresh losses on their vast holdings of government debt after the sell-off that saw $1tn wiped off the value of bonds last week intensified on Monday.

Bond prices fell for a sixth day running in the UK, pushing the yield on government gilts to their highest level since the weeks leading up to the EU referendum, and US bond yields reached levels last seen in December 2015. Bond yields, the rate of interest an investor gets, rise when bond prices go down.

But Trump isn’t in the White House yet (!) Barack Obama is still at the helm, and he’s visiting Greece on his final tour of Europe before his term expires.

He’s expected to call for Greece to receive debt relief, to give its people fresh hope as their long austerity drive continues.

Athens is already under a serious lockdown, with all protests banned while Obama meets with Greek Prime Minister Alexis Tsipras and President Prokopis Pavlopoulos.

And in the corporate world, mobile giant Vodafone, commercial property group Land Securities, budget airline easyJet, food manufacturer Premier Foods and cinema group Cineworld are reporting results.