This is another good line from Andrew Bailey's speech:

The modern central bank is therefore the product of a long historical process. On one hand lies the Montesquieu tradition, concerned with limiting arbitrary power through institutional checks. On the other lies the tradition of Locke and Hume, concerned with establishing money and credit as public goods upon which society depends.

The governor of the Bank of England is delivering a robust defence of central bank independence, which has come under fire from populist forces in recent years.

, speaking at the LSE TRIUM Anniversary Conference in London this morning, is arguing that modern central banks deliver a public good by defending monetary and financial stability.

He insists that central banks exist to protect the value of money from short-term pressures that could damage the public interest, rather than "accumulate or counter arbitrary power"

says:

Central bank independence does not mean detachment from democracy. It means insulation from short-term political pressures within a democratic framework. Its legitimacy derives from a parliamentary delegation and accountability goes with that independence. It is the basis on which independence legitimately rests.

In a speech littered with historical references (), Bailey acknowledges that there is growing scepticism towards public institutions – such as central banks – in many countries. This means central banks must explain their decisions clearly, or risk losing their legitimacy.

Bailey explains:

As Jan-Werner Müller has argued, populism often rests on the claim that a particular political movement alone represents the authentic will of the people. Put thus, the public interest is something that a single ideology can capture and deliver directly. This effectively collapses Barry's distinction between the public interest and the public good.

Any institution seen to get in the way becomes an unrepresentative elite standing between the people and their will, and thus an obstacle to popular sovereignty. This is a serious challenge. We have developed systems of government (in the broadest sense of this term) in which legitimacy rests in the plurality of society, not in the preferences of any single group within it. Courts of law, universities, regulatory bodies and central banks all derive authority through forms of democratic delegation set within a framework of that plural society.

Maintaining the trust that goes with that delegation matters deeply.

You can see the full speech here.

Ouch! The downturn in the UK construction sector has accelerated, as builders cut back on housebuilding.

S&P Global's UK Construction Purchasing Managers' Index has dropped to 44.3 in August, down from 44.7 in July.

That shows that activity in the sector shrank at a faster pace (as 50 points = stagnation).

Housing was the only category to register a faster pace of contraction than in July, S&P Global, a blow to the government's ambitions to build more houses.

, economics director at e, says:

"UK construction companies experienced another solid reduction in output volumes, with a faster downturn in house building the main reason for a weaker overall performance during August. A sharp and accelerated drop in residential activity more than offset slower falls in the commercial and civil engineering sub-sectors.

Sluggish demand conditions and low client confidence, combined with anxiety about the impact of the Middle East conflict, were again factors contributing to lower workloads across the construction sector. Total new business nonetheless decreased to the least marked extent for 11 months amid reports of support from transport infrastructure work and some pockets of vitality such as data centre roll outs and energy sector projects.

Newsflash: UK mortgage rates have started to rise, as the recent turmoil in the bond market hits borrowers.

Data provider has reported that the average rate on fixed-term mortgages rose this morning.

They report:

The average 2-year fixed residential mortgage rate today is 5.60%. This is up from 5.59% the previous working day.

The average 5-year fixed residential mortgage rate today is 5.64%. This is up from 5.63% the previous working day.

There are currently 7,618 residential mortgage products available. This is up from 7,609 the previous working day.

This increase reflects the rise in UK bond yields earlier this week, which pushed up the 'swap rates' which measure the cost of lending.

Although UK bond yields did fall yesterday, and are flat today, this leaves borrowing costs near their highest level in years.

World food prices have hit their highest level in almost four years, as the summer heatwave hit agriculture production.

All commodity groups recorded higher price indices than in the previous month, the FAO says, pushing the index to its highest level since November 2022.

surged by 11.9% in the month – a really large jump – partly due to unfavourable weather.

The FAO explains:

Persistent hot and dry weather led to a downward revision of sugarbeet yield forecasts in the European Union, where planted area was already anticipated to decline from the previous season, while El Niño-related weather conditions continued to affect production prospects in key producing countries in Asia.

rose by 2.2%, due to "robust demand, weather-related concerns over crop prospects in key producing regions, and continued uncertainty surrounding Black Sea export flows".

prices were up 0.6% in the month, driven by higher world palm and soy oil prices. The FAO points to "robust global import demand and concerns over the potential impact of El Niño-related weather conditions on production prospects in Southeast Asia".

prices rose 1%, due to higher poultry, pig and ovine meat prices.

prices were up 2.3%. The FAC points out that "In the European Union, tightening milk supplies, compounded by hot and dry weather in several major producing regions, supported prices, while sustained import demand added upward pressure".

It's official, UK car sales jumped last month.

New car registrations rose by 13.7% to 94,236 units in August, the Society of Motor Manufacturers and Traders has reported.

That, they say, is the "best August since the introduction of the biannual plate change".

August is usually a low-volume month for car sales, as some buyers hang on until September to get a new number plate to show off (which has always slightly baffled me).

Electric-powered cars drove sales up in August, the SMMT explains:

Plug-in hybrid electric vehicles (PHEVs) posted the strongest growth, up 39.8% to account for 14.5% of registrations, while hybrid electric vehicles (HEVs) rose 26.3% with 12.7% of the market. Battery electric vehicles (BEVs) increased 27.7% to claim 29.8% of overall uptake.

Shares in Israel's which is also involved in the Sea Lion project, have dropped by 4.5% on the Tel Aviv stock market.

and are partners in the Sea Lion oil drilling project near the Falkland Islands.

are not alone in feeling the impact from Javier Milei's speech.

Shares in , an oil and gas exploration company which operates around the Falkland Islands, are down 15% in early trading.

The value of UK-based oil and gas exploration and production company plunged by 10% at the start of trading in London, after Argentina's president threatened to sanction oil firms operating near the Falklands Islands.

has drilling interests in the Falklands, having discovered significant oil reserves in the Sea Lion prospect to the north of the islands back in 2010.

But those interests have come under threat, with Javier Milei claiming overnight that the Sea Lion oilfield was a "clear and present danger".

Milei claimed that the 'winds of change' support Argentina's claim to the Falkland Islands, telling a national TV address:

"Argentina will not stand idly by.

Any further advance on the Malvinas Islands will be considered a violation of our national security."

The Sea Lion oil project is about 220 kilometers (140 miles) north of the Falklands, and Rockhopper Exploration and Israel's Navitas Petroleum plan to begin drilling in the coming months and start pumping oil in 2028.

Shares in (named after the penguin which is native to the Falkland Islands) are currently down 9% at 71.1p, having hit a two-month low at the start of trading.

Shares in Volkswagen have jumped by 7% in early trade in Frankfurt, Reuters reports, after the company agreed the biggest restructuring in its history.

That confirms that investors had not expected VW's supervisory board to back the plan, and had feared conflict between management and unions.

Investors will cheer Volkswagen's supervisory board's decision to back its sweeping restructuring plan, argues Deutsche Bank analysts.

They told clients this morning:

The unanimous approval of Volkswagen's Zukunftsplan 2030 last night is, in our view, a fundamental breakthrough and a much-better-than-feared outcome. We expect the market to react positively.

Virtually every single one of the numerous investors we spoke to over the last few days continued to view Volkswagen as simply "not fixable", and scepticism around the likelihood of a comprehensive agreement remained extremely high.

Financial analysts are applauding Volkswagen for reaching agreement on its 50,000 job cuts.

have congratulated VW management, the VW workers council and the representatives from the State of Lower Saxony for appoving the company's Future Plan 2030.

They say:

This is a brave plan and a realistic decision for all concerned. As we have highlighted, given VW's German plant competitiveness and lack of global revenue opportunities, VW simply had no other choice. The plan will allow VW to cut costs, to cut the number of models (and complexity), and to sharply cut investment spend by a further €6bn p.a. (per year)

This decision should further allow VW to continue to move capital to its highest-return brands and models, without the need to maintain excess capacity utilisation. Whilst VW's LT EBIT targets remain ambitious, VW has once again proved its progress in recent years.

Elsewhere in the car sector, Volkswagen's supervisory board has agreed to back a sweeping overhaul that will cut another 50,000 jobs and could lead to plant closures.

VW announced last night that "after intense and constructive discussions", the Supervisory Board has unanimously approved the comprehensive Future Plan 2030 drawn up by chief executive Oliver Blume.

says:

"The Supervisory Board has unanimously approved the Executive Board's Future Plan presented today. This is a strong signal for the future of the Volkswagen Group. We are taking responsibility for our entire workforce, for our partners and for industrial jobs worldwide. Over the coming years, we will invest a three-figure billion sum to make our iconic brands even more attractive, stronger and more competitive."

These cuts are on top of 50,000 already agreed, as VW battles with competition from China, weak sales in Europe, and automobile tariffs set by Donald Trump.

Registrations of new cars in the UK rose about 13% to more than 90,000 in August, preliminary industry data showed on Friday.

If confirmed at 9am, when the final data is issued, that would be the highest number for an August in eight years.

The latest data from the Society of Motor Manufacturers and Traders is also expected to show that the market share of battery electric vehicles rose to about 30% in August.

Yesterday, data from New AutoMotive showed a 17.5% jump in overall new car registrations in August.

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

After a week of bond market jitters, today we're going to get some fresh insight into central bankers' thinking, and the health of the UK and US economies.

Bank of England governor is due to speak in London this morning – a day after his chief economist called for higher UK interest rates. Will Bailey – among the majority who voted to leave rates on hold in July –push back?

Opponents of rate rises point out they hurt growth, and won't tackle the oil supply shock caused by the Iran war.

This morning, a survey of UK builders will show how they're coping, while the UN's latest food price index will show if stables such as dairy, cereals, sugar, and meat are getting even pricier.

Then this afternoon, the Non-Farm Payroll will show how many jobs America added last month. Back in July, the NFP showed a shock fall in employment – economists expect a rebound in August, with forecasts for around 56,000 new jobs.

The agenda

• 9am BST: UN's FAO Food Price Index

• 9am BST: SMMT car sales

• 9.30am BST: UK construction PMI

• 9.30am BST: Bank of England's Monthly Decision Maker Panel data - August 2026

• 9.30am BST: ONS Economic activity and social change in the UK, real-time indicators

• 9.50am BST: Andrew Bailey gives keynote speech at LSE TRIUM Anniversary Conference, London

• 1.30pm BST: US non-farm payrolls jobs report