What to Watch: Lagarde takes over ECB, UK factory 'agony' and Lookers' woes

Tom Belger
Finance and policy reporter
Mario Draghi hands over the ECB presidency to Christine Lagarde. Photo: Boris Roessler/AFP via Getty Images

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Christine Lagarde takes over at the European Central Bank

Christine Lagarde, the former managing director of the International Monetary Fund (IMF), heads into work on Friday for her first time as the new president of the European Central Bank.

She is set for an eight-year term after being appointed earlier this month, and her appointment coincides with a new round of bond purchases by the ECB in a bid to encourage growth.

She takes over the reigns from Mario Draghi, described by some as the “man who saved the euro” for his handling of the threat to the eurozone from the Greek financial crisis.

READ MORE: ‘Super Mario’ Draghi’s legacy after eight years at the ECB

But Draghi is leaving in less positive circumstances than he would have hoped, bequeathing to Lagarde a divided ECB governing council.

Draghi’s fondness for aggressive monetary stimulus and willingness to shake orthodoxy by using negative rates helped keep cash flowing in European economies.

But Lagarde faces a tough test if she maintains such policies, after Draghi faced unprecedented recent criticism from senior policymakers over the risks and damage to banks and savers, as well as doubts about its effectiveness.

UK manufacturing ‘heading for recession’

British factories continued to see output shrink in October despite booming orders as European customers stockpiled goods, according to a new survey.

Data from a widely watched index beat analysts’ expectations, with manufacturing activity at its highest since April.

But output is still down month on month, according to the IHS Markit/CIPS UK manufacturing purchasing managers' Index (PMI).

Duncan Brock, group director of the Chartered Institute of Procurement & Supply (CIPS), said: “A minor uplift in overall purchasing activity did little to ease the agony for manufacturing companies in October, as the sector remained submerged in contraction terrain and heading for recession.

“Business was still restrained by the Brexit leash, as firms were subjected to the struggle against client indecision and also the downpull of a slowing global economy.”

Lookers shakeup on profit warning

Lookers shares plummeted on Friday after the struggling car dealership announced the immediate departure of two senior figures and warned its underlying profits would sink by more than two-thirds this year.

The company (LOOK.L) said its CEO Andy Bruce and COO Nigel McMinn “have agreed that they will step down from the board today.”

The chief executive and chief operating officer of struggling car dealership business Lookers have quit after issuing a second profit warning for the business since July.

It said trading since mid-September had “been much more challenging than expected,” and confirmed 15 dealerships will close and be relocated or consolidated into nearby ones “where possible” by the end of the year.

Underlying pretax profits are now expected to be £20m for the whole year, with trading in new vehicles sliding as the company “lost momentum” in the second half of September.

The wider UK car industry is suffering from lower orders both at home and abroad, with exports hit hard by the global slowdown.

European markets higher

European markets were trading higher on Friday. Britain’s FTSE (FTSE), the German DAX (^GDAXI) and the French CAC 40 (^FCHI) were all up 0.3%. The Euro Stoxx 50 (^STOXX50E) rose 0.2%.

Asian stocks were mixed overnight, with Japan’s Nikkei (^N225) sinking 0.3% but China’s Shanghai Composite index (000001.SS) soaring 1% and the Hong Kong Hang Seng Index (^HSI) up 0.8%.

What to expect in the US

US stocks also looked set to rise on the open. with Dow Jones futures (YM=F) 0.2% higher, Nasdaq futures (NQ=F) up 0.3% and S&P 500 futures (ES=F) 0.2% higher.