And finally, here’s our economics editor Larry Elliott on Amazon’s decision to pay its staff more:

Goodnight! GW

Royal Mail was the biggest faller on the FTSE 100 today, shedding another 8% to 359p after Monday’s profits warning shocker.

European stock markets ended the day lower, although Italy clawed its way back from an early-morning selloff.

Britain’s FTSE 100 closed 21 points lower, or -0.28%, at 7,474, with Italy’s FTSE MIB down a similar amount.

The French CAC shed 0.7%, though, while Germany’s DAX lost 0.4%.

In the currency markets, the pound is down half a percent at $1.2978, having hit a three week low today.

Connor Campbell of SpreadEx says:

The FTSE, which is normally a fan of a pummelled pound, found little to celebrate as the day went on, slipping 30 or so points to hit 7470. This despite a decent rebound from its miners, and the (admittedly slim) gains made by BP and Shell as Brent Crude lurked around $85 per barrel.

Over in the Eurozone, the conflict between the EU and Italy has not only dragged the euro lower, but caused the region’s indices to reverse Monday’s growth.

Happy scenes at an Amazon warehouse as the news broke:

Bernie Sanders has given Amazon his blessing, and urged other businesses chiefs to copy them:

Amazon’s pay hike could be a watershed moment for the global economy, says Hinesh Patel of Quilter Investors.

Patel thinks the move is partly PR-driven — having the world’s richest man leading tens of thousand of poorly paid staff isn’t a great look...

In that sense, this shift is about improving the company image and guarding Amazon’s reputation.

But, it also reflects changes in the jobs market, where tight labour supply is giving workers more muscle.

If so, other firms may be forced to follow, Patel explains:

“Today’s news could be a watershed moment in this paradigm shift, with one of the largest employers and a household name making such a bold statement on wages. This will place pressure on other large corporates to follow up this move with a comparable remuneration offer of their own. While these wage raises will cost Amazon, it has the financial might to absorb that cost increase and put the squeeze on rivals as the ripple effect of these wage rises hits other corporates. Similarly, while the national minimum wage has been static for some time, at state level increases have been implemented and today’s news could prompt Washington to revise the national minimum, with Amazon already indicating they will be lobbying Congress to that effect.

“Markets will be watching the impact of this dynamic closely. A tightening labour market could create healthy inflation and boost consumer spending power but it could also have an impact on corporate earnings.

The UNI Global Union, a collection of 900 unions from 150 countries, is also pushing Amazon to do more for its workers.

UNI Global Union General Secretary Christy Hoffman argues that Jeff Bezos must do better.

She also points out that Amazon workers who are members of ver.di, the largest service worker union in Germany, began a two-day strike on Monday to push for pay increases.

Hoffman says:

“A trillion-dollar company headed by the richest man in the world should pay its workers a wage above the poverty line. While this is a step forward, it is a long way from where Amazon needs to be.

“These pay rises come only after workers and communities have demanded better from the company—including Amazon workers striking in Germany today. Instead of giving Amazon pats on the back, unions around the world will continue pushing Amazon until it is a truly responsible global company, until it recognises union rights.”

Amazon’s move comes four weeks after the Archbishop of Canterbury warned that Britain’s economic model was broken, with the gap between the rich (led by Jeff Bezos) and the poor widening.

Archbishop Welby is part of a new commission on Economic Justice, led by the IPPR thinktank. It proposed a swathe of measures including a higher minimum wage, more protection for workers, and better regulation of digital firms.

IPPR director Tom Kibasi has tweeted that Amazon’s wage increases are a start:

UK opposition leader Jeremy Corbyn has tweeted that Amazon’s pay increase shows the power that workers can have if they work together.

However, US Amazon workers have found it extremely hard to unionise. Some have reported intense pressure from management when they tried to form a union.

Amazon’s pay hike may also be a sign that the company is finding it harder to recruit staff, especially with Black Friday and Christmas coming up...

This is from Mike Jakeman, PwC’s global economist:

Britain’s unions aren’t too impressed by Amazon’s pay rise - and are urging the company to improve working conditions too.

TUC General Secretary Frances O’Grady says:

“Amazon is a trillion-dollar company. It can easily afford to pay staff higher wages.

“If Amazon is really serious about looking after its workforce it must recognise trade unions. And it must end the exploitative working practices that have seen hundreds of ambulances called to its UK warehouses.

“All workers deserve decent conditions at work – not surveillance, inhuman targets and the threat of a disciplinary if they to go to the toilet.

“Today’s announcement is the result of campaigning by the GMB and unions around the world. It’s only a start and shouldn’t be spun as a huge act of generosity.”

Back in 2016, journalist James Bloodworth worked undercover at an Amazon warehouse, and reported that some staff were urinating in bottles because they feared disciplinary action if they took a toilet break.

What could possibly have prompted Amazon’s sudden largesse?

Well, the company has been facing rising criticism on both sides of the Atlantic for its business practices, from pay and conditions to its tax bills.

Progressive US senator Bernie Sanders has targeted the company with a new bill called Stop BEZOS. It would penalise companies whose poorly paid staff were forced to take welfare payments to make ends meet.

Amazon is one of the biggest employers of those who receive food stamps in the United States, with nearly one in three Amazon workers on food stamps in Arizona and one in 10 in Pennsylvania and Ohio.

European workers are also unhappy. There have been strikes in Italy, Germany and Spain as unions demand better pay and conditions from the company.

UK workers have also warned that conditions at Amazon’s warehouses are below standard, with ambulances had been called out 600 times to the online retailer’s UK warehouses in the past three years.

Today’s pay rise won’t address those issues, but may show that Amazon has recognised it has a serious problem.

And just yesterday, chancellor Philip Hammond called for urgent reforms to the way big technology firms are taxed.

Amazon actually halved its UK corporation tax bill last year to £4.5m, despite continuing to grow strongly - often at the expense of traditional retailers.

Here’s our news story on Amazon’s dramatic wage increases:

Amazon had previously paid its UK staff £8 per hour, or £8.20 in London.

So staff in the capital are getting a pay rise of up to 28%, while those in the rest of the country could earn 18% more.

That’s a whopping inflation-busting increase, especially as average UK wages are rising by less than 3% at present.

Here’s some instant reaction to Amazon’s decision to raise its minimum wage to twice the US minimum:

Amazon have also released a Q&A about their pay rise.

Here’s a flavour:

Does this apply to Whole Foods and your other subsidiaries?
Yes. The new Amazon $15 minimum wage applies to all U.S. employees at Amazon and its subsidiaries.

How are you going to work with Congress to raise the federal minimum wage?
Our public policy team will work with policymakers in Washington, D.C., to advocate for a higher federal minimum wage.

What do you want the federal minimum wage to be raised to?
We believe $7.25 is too low. We would look to Congress to decide the parameters of a new, higher federal minimum wage.

In another important move, Amazon is going to lobby Congress to raise the Federal minimum wage from $7.25 per hour.

Jay Carney, Senior Vice President of Amazon Global Corporate Affairs, says:

We will be working to gain Congressional support for an increase in the federal minimum wage. The current rate of $7.25 was set nearly a decade ago.

We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country.”

Amazon’s new $15/hour minimum wage will apply to all full-time, part-time, temporary and seasonal workers in the US.

It will begin on November 1st, meaning staff should have a little more cash in their pockets for Thanksgiving and Christmas spending.

Brexit may make it much harder for British builders to find skilled staff, warns Blane Perrotton of property consultancy and surveyors Naismiths.

“With the government confirming its plans to make it harder for European workers to come to the UK after Brexit, the construction industry could become an early casualty.

“Across the UK, one in 10 builders is an EU national – and this figure rises to a third in London.

“With UK construction already struggling from a chronic skills shortage and Brexit sapping investors’ confidence, British builders need restrictions on European workers like they need a hole in the head.”

Britain’s retail crisis is also hurting UK construction.

With scores of stores closing, there’s less demand for builders to knock up new outlets, argues.

Max Jones of Lloyds Bank Commercial Banking says this makes it tougher for construction firms to find work:

The commercial sub-sector is facing myriad headwinds, with the London market still heavily exposed to Brexit uncertainty and retail suffering an annus horribilis.

“Against this background, many contractors are betting big on infrastructure, yet there is only so much work to go round. And with some questioning the merit of the current pipeline of megaprojects, it underlines that there is no risk-free part of the market in which to be invested.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, says Britain’s builders have plenty to worry about, including Brexit:

“Despite the biggest rise in new orders since December 2016, the sector remained in a downbeat mood with business optimism at its second lowest level since the beginning of 2013.

“A cause of this malaise pointed to increased cost burdens with both fuel prices on the rise, and acute shortages in raw materials, as supplier delivery times have lengthened to an extent not seen since 2015. The Brexit blot on the landscape was still in evidence as housing activity slowed to a pre-April growth rate and clients hesitated to place orders. Civil engineering was hit the hardest however and under 50 for the second month in a row, which points towards another contraction.

Today’s PMI report suggests British builders are struggling, because clients are too worried about Brexit to commit to new projects.

Tim Moore, Associate Director at IHS Markit (who wrote the report), explains:

Construction companies continued to note that political uncertainty acted a key drag on decision- making, with Brexit worries encouraging a wait-and- see approach to spending among clients.

The main areas reported as likely to see a boost in the coming year were construction work related to large-scale energy and transport projects.”

Back in the UK, London house prices have continued to fall.

Prices in the capital dropped by 0.7% in the last three months - the fifth quarterly drop in a row, according to the Nationwide building society.

More here:

Oil has “sprung another gusher overnight”, says Stephen Innes of trading firm OANDA, as he watches the US crude price hit a fresh four year high.

He believes the new USMCA trade deal is also pushing crude prices up:

Ultimately the markets remain singularly focused on the prospect of supply disruptions from Iran which is the primary driver of oil prices.

And of course, the US/Mexico/Canada trade agreement will have a longer-term positive impact on oil prices in a broader macro context.

Michael Hewson of CMC Markets fears that higher oil prices will choke off growth, at a time when trade war fears are also hurting confidence:

IMF head Christine Lagarde warned yesterday that the fund was likely to be downgrading its global growth outlook in the coming days, and its hard to argue that an oil price that could be heading towards $90 a barrel at a time when economic activity is slowing, is conducive to a strong growth picture.

If anything, it will act as a pinch on consumer spending and could well choke it off altogether if it moves towards $100.