Mixed close in European markets 17.03 European markets are now closed and it has been a mixed day, with the South outperforming the North of Europe. In Germany the Dax closed down 0.46pc In France the Cac closed down 0.16pc In Spain the Ibex was up 1.29pc In Italy the FTSE Mib was up 0.97pc. UK markets close 16.43 Lingering worries over the US budget and debt ceiling have ensured the FTSE 100 has lost a further 27.92 points, or 0.4pc, to close at a three-month low of 6,337.91. Will Nicholls, a dealer at spread-betting firm Capital Spreads, said: Investors are praying for an agreement between US politicians before next week's debt ceiling deadline - or they face chaotic markets in what has been a positive year to date for global economies so far. Janet Yellen is set to be announced as the new Fed Chairman by Barack Obama today, but the positive effects of her dovish stance on the markets are being over-ruled by the panic and current downward trend set by the debt-ceiling and government shut down. Mixed start to US earnings season 16.27 US markets have also been hit by a mixed start to earnings season in the US. Alcoa rallied 3.8pc after the biggest US aluminum producer unofficially kicked off earnings season with better-than-forecast profit. Men's Wearhouse jumped 25pc after Jos. A. Bank Clothiers offered to acquire the apparel retailer. But Yum! Brands sank 8.5pc after third- quarter income fell 68pc on lower same-store sales in China, while Costco Wholesale dropped 1.6pc after profit missed estimates. Wall Street waivers as it awaits official appointment of Yellen 16.18 Wall Street fluctuated between gains and losses on Wednesday as markets awaited the official appointment of Janet Yellen as head of the US Federal Reserve. The S&P 500 added less than 1 point to 1,655.56 after climbing 0.2pc in early trading. The Dow Jones rose 3.11 points, or less than 0.1pc to 14,779.64. Gold has also tumbled below the $1300 on Wednesday, falling 1.6pc to $1,2988.22, after the dollar extended gains to hit a one-week high after it was revealed that Yellen would be the next US fed chair. The greenback advanced 0.5pc to 97.34 yen and was up 0.5pc to $1.3512 against the euro. Dan Dorrow, head of research at Faros Trading, told Bloomberg: We've got dollar strength against the safe havens. Yellen's nomination, which was widely expected, is still a risk-positive event. Cable says he 'expects' Royal Mail bosses pay to remain 'restrained' 16.01 The business secretary admits that the pay package for the chief executive of Royal Mail, Moya Greene, is "complicated" but says he hopes the bosses will show "proper restraint." We would expect [Moya Greene] and others to exercise appropriate restraint. But it will be a private company and we would expect them to formulate their own remuneration policy. And that's it from Cable. Independence of BNP Paribas valuation under question 15.57 The committee has pointed out that BNP Paribas, one of the groups that helped the government set a value range for the shares, has a contract with Royal Mail. Cable says he will check the exact arrangement, saying he was told "categorically" it was an "independent" valuation. We are committed to the six-day service, says Cable 15.46 The business secretary reiterates that both the frequency of Royal Mail's service and the geographical spread, cannot be changed without parliament's approval. The universal service obligation can't be changed by the Royal Mail or regulator, it will have to go to parliament. Royal Mail unlikely to sever ties with Post Office, even after ten years, says Cable 15.38 MPs are asking the business secretary whether he is concerned that the Royal Mail will look to other providers, such as supermarkets, instead of the Post Office network after the ten year agreement with the Post Office expires. Mr Cable says he finds those concerns "implausible": I find it implausible precisely because it is so much in the interest of the Royal Mail to continue its relationship. The Post Office has a reach that no other network has and its extremely valuable for Royal Mail to keep it Royal Mail brand protected under agreement with Royal Household 15.28 The business secretary confirms that there is an agreement with Royal Hosuehold over circumstances in which the brand can be used specifically to stop it being abused. For example, it coudl not be used If it brought crown into disrepute or the Royal Mail ceased to become universal service provider. Workers do not lose shares if made redundant or leave over disability 15.25 Vince Cable has cleared up some confusion over the conditions surrounding whether employees will lose their shares if they leave the group before the end of the three-year lock in period. He says there is an exception for those who leave due to redundancy or disability. Employees who leave Royal Mail within three years must give up shares 15.23 The committee challenges Mr Cable on the fact that employees who leave Royal Mail within the three-year lock-in period must give up their shares. Is that fair, they ask. That would seem unfair and I will certainly take up the issue on that probably small number of cases of people who might find themselves disadvantaged in that way. No taxpayer clawback if asset sales generate unexpected windfall, says Cable 15.18 The Business Secretary is being asked whether taxpayers will benefit should the value of Royal Mail's buildings shoot up more than expected, generating a windfall when they are sold. The answer is no. I don't think you can isolate one way of Royal Mail business in that way. It will hopefully earn profit, through its trading business and asset transactions. These assets are available for sale and that's taken into account in the valuation of the company. It is an overall part of the same package that is part of the price people will be paying for the company Fed's Evans says US monetary policy must remain accommodative 15.10 Sayonara, taper? Over in the US, the Federal Reserve's Evans has said the central bank should keem monetary policy loose saying economic growth has been "not nearly strong enough" British economy grew 0.8pc in three months to September, says NIESR 15.04 The pace of British economic expansion slowed slightly from the three months to August, when GDP grew 0.9pc, according to the National Institute of Economic and Social Research. It added that it expects the UK to pass its pre-crisis peak until 2015, with the economy still 2.5pc below the size it was in early 2008. Panmure Gordon is an 'outlier' on Royal Mail valuation, says Cable 14.56 MPs bring up the Panmure Gordon note which made headlines last week by suggesting that the government has undervalued Royal Mail by at least £1bn. There are a lot of equity analysts out there. This is one and its an outlier. I'm not criticising them. In the banking crisis they were very good. But on this particular occassion they are way outside consensus. Ministers criticise 440-page prospectus document 14.50 The committee has repeatedly asked Mr Cable whether he think the production of a 440 page prospectus just 12 days before closing the share offering is unfair to individual investors, who may have bought shares without understanding their investment. Cable insists that he has full faith in retail investors to know that they are taking a risk and that they will have made a judicious decision. Royal Mail share offering attracted 700,000 individual applications from retail investors 14.43 Vince Cable says the high number of applicants reassures him that the £750 minimum spend did not put off too many people. Cable: We valued Royal Mail based on comparable situations 14.40 The business secretary says the value range was determined by comparing Royal Mail with its peers in other European countries such as Belgium and Austria. Cable: NAO will decide whether float has been value for money There are the proceeds both now and in the future and we also have to think about whether this transaction has helped deliever our basic objective - to enable Royal Mail to deliver universal service obligation Cable: Royal mail share offering has a long view 14.33 Business secretary Vince Cable denies he is being inconsistent by supporting the Royal Mail float, having criticized other privatisations while in opposition. There's quite a lot of connection between what I'm saying to you about this flotation and what I said before about the Kay reports and long termism A major objective is to try to obtain a long term secure responsible institutional investor base - that's primarily what this is about . This is about long-term stable secure investment. As far as the fees are concerned they are rather competitive unlike other privatisations IMF director: 'I cannot think of anybody better than Yellen to lead the Fed' 14.27 Here's Jose Vinals, financial counsellor and director of money and capital markets at the IMF: I would not like to pre-judge the annuoncement that the white house is going to make. But on a personal note if this afternoon Janet Yellen is nomiated as chairman, I would be very happy, and this is because over the years I have been present with her in a number of meetings and I have the highest reg for her both as a very solid excellent thinker Given her very substantial academic experience and background and also as a very solid policymaker with a tremendous good sense of policy both on academic credentials and policy credit, I cannot think of anybody who is better than Janet Yellen to lead the fed in these challenging times Here's what the IMF thinks might happen if the Fed tapers too suddenly 14.23 In its global financial stability report, the IMF lays out two scenarios. The baseline scenario (green line) assumes that the Fed exits quantitative easing in line with its current guidance - i.e. gradually. The adverse scenario (red line) predicts what would happen to Treasury yields should the Fed taper more sharply. The blue dot shows what happened to Treasury yields when Ben Bernanke announced that a taper was on the cards - it raised yields but they remained below the long-term average. IMF warns that US Fed must taper with care 14.00 The International Monetary Fund has cautioned that if the US Federal Reserve does not execute tapering in the right way, long term borrowing costs could rocket, which could wipe as much as $2.3 trillion off the bond market. M&S autumn/winter range on analysts' minds 13.30 Marks & Spencer's new clothing range has been a topic of much discussion among analysts this week, with a number of retail experts cutting their forecasts for the company in the belief the company's new autumn/winter fashion will not be a big hit. Nomura has weighed in on the debate today and said that the "success or otherwise of autumn/winter seems too early to call." Looking broadly at the group's second quarter, they said: There is no doubt that M&S's trading stance in general merchandise through the summer months has been more promotional than we would have liked. We indicated in our note dated 9 July that we held 'our above-consensus FY estimates unchanged, although we acknowledge M&S needs better trade than we have seen to date to deliver our estimates' We believe the early start to the summer sale in June prior to the heat wave may have been unhelpful in terms of generating full price sales in 2Q, while the industry in general faced with promotional comparatives and warm temperatures has struggled at the end of September. After falling on Monday and Tuesday, M&S shares have edged up 0.7pc. The curious case of the fall in gold 13.14 The failure of gold to rally in response to news that the status quo is likely to continue at the US Federal Reserve (loose money, low interest rates), has prompted one analyst to brand the market in the yellow metal "broken." Andrew Thrasher, investment analyst at Financial Enhancement Group, said: When it's unable to rally on good news, you have to take notice. Gold price over the last three days. Royal Mail investors still buying in grey market after deadline 12.39 Louise Armitstead reports. Small investors are still scrambling to get exposure to Royal Mail by buying in the grey market after the share order books for the historic privatisation closed at midnight. Spreadbetting firm IG Index said demand for Royal Mail in the grey market was "just as strong" today as the record demand yesterday with investors betting that the shares will open far higher than the Government's estimates. Alastair McCaig, market analyst at IG Index, said some investors were selling positions and taking profits. But the majority are still buyers. We're seeing a split of about 60pc buyers and 40pc sellers. The sellers are straight profit takers rather than short-sellers. There's still a huge interest in this IPO and we expect it to continue until the unconditional trading starts on Tuesday," he said. The mid-price in the grey market is 397p on Wednesay, down marginally from Tuesday but still 67p higher than the top of the Government's range of 300p to 330p. Full piece here. Confused about Help to Buy? Ask our experts 12.35 Our personal finance editor Richard Dyson is answering readers' questions on the Chancellor's flagship scheme to help first-time buyers get on the housing ladder. The webchat has just kicked off - join in here. A Fed under Yellen will be 'looser for longer' 12.27 Ambrose Evans-Pritchard looks at Janet Yellen's policy preferences and concludes that, above all else, she is concerned the real level of unemployment - not just the headline figure which masks the number of people who have stopped trying to look for a job. So there we have it. The next chairman of the Fed is going to track the labour participation rate. Money will stay loose. Markets have been spared again. The Brics can breathe easier. This leaves me deeply uneasy. We are surely past the point where we can keep using QE to pump up asset prices. My view is that emergency stimulus should henceforth be deployed only to inject money directly into the veins of the economy as an adjunct to the US Treasury, by fiscal dominance, as deemed necessary. That would take an intellectual revolution. Is Janet Yellen game for such incendiary ideas? Read his whole piece here. Lloyds shares rise on Help to Buy hope 11.33 Back in the FTSE 100, Lloyds Banking Group shares are up 1.9pc after influential analyst Ian Gordon, of Investec, highlighted that Britain's biggest mortgage lender will receive a boost from the second round of Help to Buy. He says: As detail of (phase 2) of the "Help to Buy" scheme emerges, we see the banks, in particular Lloyds, as the key beneficiaries. We see little pressure on front-book pricing, but the key benefit (for banks) is that "interest rate prisoners" are set to remain "trapped." Cause for Lloyds to celebrate? OECD forecast signals developed economies headed for upturn 11.27 Things are looking up for the 33 developed economies covered by the OECD. The organisation's leading indicator, which is meant to provide an early signal of turning points in economic activity, rose to 100.6 in August from 100.5 in July - where the long-term average is 100. Blow for Canada as Disney Pixar closes studio 11.14 The only Disney Pixar studio outside California is to close down, reports Canadian news website The Province. The studio, which employed 100 in Vancouver, Canada, produced short films based well-known Pixar characters such as Woody and Buzz Lightyear from the Toy Story films.