Deutsche Bank has been fined $630m (£504m) by US and UK regulators in connection with a Russian money laundering plan. Under the scheme, clients illegally moved $10bn out of Russia via shares bought and sold through the bank’s Moscow, London and New York offices. Authorities said Deutsche had missed “numerous opportunities” to detect, investigate and stop the scheme. Deutsche Bank said it was co-operating with regulators. It also said it had put aside money to cover the cost of the settlement. During the investigation, New York authorities and Britain’s Financial Conduct Authority (FCA) found that so called “mirror” trades had been carried out through the bank between 2011 and 2015. Clients would purchase stocks in roubles in Moscow before their counterparts sold the same stock at the same price through the bank’s London branch.

Volkswagen has overtaken Toyota to become the world’s best-selling carmaker, the first time the German company has held the position. Japan’s Toyota, which had topped sales for the past four years, sold 10.175 million vehicles globally in 2016. That fell short of the 10.31 million sales which VW reported last week. The milestone comes despite VW’s scandal over emissions tests cheating, which sparked a global backlash and multiple lawsuits. Volkswagen, which makes the Audi, Porsche and Skoda brands, saw a 3.8% increase in sales buoyed by demand in China.

The UK’s biggest supermarket group, Tesco (TSCO.L), has agreed to buy UK’s biggest food wholesaler, Booker Group (BOK.L), in a £3.7bn deal. The firms said the deal would create the “UK’s leading food business”. They added that combining the companies would bring benefits for “consumers, independent retailers, caterers, small businesses, suppliers, and colleagues”. Under the terms of the deal, Booker shareholders will end up owning about 16% of the combined group. “Tesco has made significant progress in turning around our UK retail business,” said Tesco chief executive Dave Lewis. “This merger with Booker will further enhance Tesco’s growth prospects by creating the UK’s leading food business with combined expertise in retail, wholesale, supply chain and digital.”

Royal Bank of Scotland (RBS.L) has set aside a further $3.8bn (£3.1bn) to cover fines in the US, the bank has said. The provision is for an expected penalty linked to the bank’s role in selling risky mortgages prior to the 2008 financial crisis. RBS has now put a total of £6.7bn aside to cover litigation by the US Department of Justice. The latest move will plunge the bank, which is 72%-owned by the taxpayer, further into debt.

Investment in the UK’s automotive industry fell in 2016 after several years of strong growth, according to the head of the industry’s trade body. Some investment decisions are also on hold until there is clarity about the UK’s post-Brexit trading arrangements. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, was giving evidence to the Treasury Committee on Tuesday. He told MPs that investment appears to be falling back. “We are putting together the data as best we can,” he said. “But I sense certainly that the amount invested over the last 12 months will not be as high as the preceding one, two, three years.” He said that despite the decision taken by Nissan in the autumn to build two new models at its Sunderland plant, other companies appeared to be holding off key decisions. “Certainly, I believe that companies are at least sitting on their hands… until there is a bit more clarity,” he said. UK car production has grown sharply in recent years on the back of record investment.

Australia and New Zealand say they are hopeful of pressing ahead with the Trans Pacific Partnership trade deal, despite America’s formal withdrawal. The US-led, 12-nation agreement was set to cover 40% of the world’s economic output. Pulling out of the TPP was one of Mr Trump’s first executive orders and fulfils a long-held campaign promise. Australia has already devised a name for a possible new agreement: TPP 12 Minus One. The country’s trade minister Steve Ciobo said Australia would not abandon the TPP just because it would require “a little bit of elbow grease” to keep it alive. The trade agreement was negotiated by former US President Barack Obama and was aimed at deepening economic ties between member countries, including Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.

The prime minister is to unveil a new, more interventionist, industrial strategy on Monday, designed to boost the post-Brexit UK economy. The government will be “stepping up to a new, active role”, Mrs May said. She will launch the new strategy at her first regional cabinet meeting, to be held in the north-west of England. Business leaders welcomed the plan which will focus on “sector deals” in areas such as life sciences and low-emission vehicles. A green paper will set out ways the government can provide support to businesses by addressing regulatory barriers, agreeing trade deals and helping to establish institutions that encourage innovation and skills development.

China’s economy grew by 6.7% in 2016, compared with 6.9% a year earlier, according to official data, marking its slowest growth since 1990. The figure is in line with Beijing’s growth target of between 6.5% and 7%. But the news comes just a couple of days after the leader of one Chinese region admitted GDP data was faked. China is a key driver of the global economy and a growth slowdown is a major concern for investors around the world.

The head of the International Monetary Fund has warned the UK there is still likely to be “pain” ahead as Theresa May prepares to trigger the UK’s departure from the European Union. She said that although the UK economy had performed more strongly than the IMF had predicted, uncertainty over the terms of the deal “is always a risk”. Any deal with the EU will “not be as good” as membership, she said. “When you belong to a club, whatever that is, the members of the club have a degree of affinity and particular terms under which they operate,” Ms Lagarde told me at the World Economic Forum in Davos. “Someone outside the club has different access.” I asked her if she agreed with the Prime Minister of Malta, Joseph Muscat, that any future UK/EU agreement “necessarily needs to be inferior to membership”. Malta presently holds the rotating presidency of the EU.

Mobile operator EE has been fined £2.7m by the telecoms regulator, Ofcom, for overcharging tens of thousands of customers. The watchdog found that the UK’s biggest mobile network broke a billing rule on two occasions. Users who called its ‘150’ customer services number while roaming within the EU were incorrectly charged as if they had called the US. That meant customers were charged £1.20 a minute, rather than 19p. As a result, more than 32,145 customers were overcharged a total of £245,000. Despite calls or texts to the ‘150’ number from within the EU becoming free from 18 November 2015, EE continued to bill more than 7,600 customers until 11 January 2016 who were overcharged £2,203. Lindsey Fussell, Ofcom’s consumer group director, said: “EE didn’t take enough care to ensure that its customers were billed accurately. This ended up costing customers thousands of pounds, which is completely unacceptable. “We monitor how phone companies bill their customers, and will not tolerate careless mistakes. Any company that breaks Ofcom’s rules should expect similar consequences.”

The UK will not retain “partial” membership of the EU once it leaves, Theresa May will say in her much-anticipated Brexit speech. The PM will tell other European countries the UK wants to trade with them “as freely as possible” but will not be “half-in, half-out” of the EU. Her speech is expected to include further hints Britain could leave the EU single market. Downing Street said she would set out 12 negotiating objectives. The government has so far revealed few details about what it wants to secure from the Brexit talks.

The pound has hit its lowest level for more than three months on reports Britain was set to quit the EU single market as part of its Brexit plans. Sterling fell below $1.20 before bouncing back slightly on Monday. The pound also dropped to a two-month low against the euro, falling more than 1% to about €1.13 in Asian trading. Analysts said traders were reacting to reports that UK Prime Minister Theresa May would use a speech on Tuesday to signal a so-called “hard Brexit”. That is a term used to imply prioritising migration controls over single market access. The pound has fallen about 20% against the dollar since June’s EU referendum, to lows last regularly seen in 1985. Much of that volatility has been due to uncertainty about the economic impact if the UK gives up its tariff-free access to the EU.

There were more first-time home buyers in 2016 than at any time since the start of the financial crisis, according to research by Halifax bank. It also found the average price of a first home in the UK broke through the £200,000 barrier for the first time. Meanwhile, the average first-time deposit more than doubled compared with 2007 to stand at more than £32,000. And 60% of first first-time buyers’ mortgages were for 25 years or longer, up from 36% a decade ago. The Halifax First-Time Buyer Review said the number of buyers entering the market hit 335,750 last year, up 7.3% on 2015. That is the highest level since the start of the financial crisis in 2007, and 75% higher than the all-time low of 192,300 first-time purchases seen in 2008. However, it still has some way to go to match the peak of 402,800 in 2006.

The immediate risk posed by Brexit to the UK economy has declined, the governor of the Bank of England has told MPs. Mark Carney said that action by the Bank before and after the vote to leave the European Union had reduced the danger to the country’s financial stability. He added, however, that the overall level of risk was still “elevated”. The risk was greater for continental Europe than for the UK, he said. The governor also told members of the Treasury Select Committee that a period of transition was “highly advisable”. “If there is not such a transition put in place, in our view it will have consequences. We will work to mitigate those consequences as much as possible,” he said. Mr Carney said that the UK should concentrate on stable access to financial markets after Brexit. The financial services industry could suffer “outsize” consequences from losing only some of its access.

Sainsbury’s has reported record Christmas sales of more than £1bn across the group. But the supermarket giant said like-for-like sales sales only rose 0.1% in the 15 weeks to 7 January. Argos, which Sainsbury’s bought last year, had strong sales over Christmas and Black Friday. But chief executive Mike Coupe said the “market remains very competitive and the impact of the devaluation of sterling remains uncertain”. The pound has been falling against the dollar and the euro since the EU referendum and there have been warnings that this will lead to higher prices this year as import costs rise. Sainsbury’s Christmas quarter sales beat expectations. Analysts had predicted a fall in like-for-like sales of 0.8%. Food sales have been buoyant for retailers over Christmas period, according to a report by the British Retail Consortium on Tuesday. And Morrisons reported its strongest Christmas sales for seven years on Tuesday.

Supermarket chain Morrisons (MRW.L) has reported a 2.9% rise in like-for-like sales in the nine weeks to 1 January – its best performance for seven years. The retailer said this was achieved by improving the products on offer and by becoming more competitive. Morrisons also said it expected its annual profits to beat analysts’ expectations, with underlying profits predicted to be £330m-£340m. The consensus among market analysts was for £326m.

The final three months of last year saw the strongest quarterly growth in consumer spending in two years, according to payment card company Visa. Its research, which reflects cash and card spending, showed expenditure rising at an annual rate of 2.8% in the fourth quarter. That was the quickest quarterly growth rate since the end of 2014. The report comes ahead of trading updates this week from Marks and Spencer (MKS.L), Tesco (TSCO.L) and Morrisons (MRW.L). Last week Next (NXT.L) supplied a shock to the retail sector when it reported a disappointing Christmas trading period and warned that conditions would continue to be difficult this year. Next shares lost almost 20% in two days and the warning also hit shares in Mark and Spencer and Debenhams.

High Street sales fell in December for the fourth year in a row, as shoppers shifted more Christmas shopping online. Sales were 0.1% lower than in December 2015, according to BDO’s High Street Sales Tracker, with consumers spending more on home wares but less on fashion. However, online sales were 19% higher than a year earlier. And the tills in High Street stores rang loudly in the week up to Christmas Day – sales rose 11.7% compared with the same week in 2015. BDO said retailers benefited from Christmas day falling on a Sunday. Online orders saw an even steeper rise for the week to 25 December, up 51.1%. Online sales make up about 15% of all retail spending. During the first three weeks of December fewer shoppers visited the High Street, retail parks and shopping centres. But they returned in the final week leading up to Christmas day, splashing out on items for the home as well as “lifestyle” items such as bicycles and seasonal products such as wrapping paper and Christmas cards. Some of December’s spending may also have been brought forward to November by sales offers around Black Friday. BDO reported higher year-on-year in-store sales for October and November.

The price of petrol and diesel in the UK has risen to its highest since July 2015, following a three-pence-a-litre increase in December alone. The average cost of unleaded petrol hit 117.23p at the end of the month, with diesel reaching 119.63p, the RAC said. The wholesale price of both fuels has risen significantly, following the production cuts announced by Opec. Brent crude jumped by 10% on 30 November, the day the cartel announced a cut of 1.2 million barrels a day. As a result, the oil price is now double what it was a year ago, rising from a low of $27.88 in January 2016 to more than $55 this month. The fall in the value of sterling since the Brexit vote has also increased UK fuel prices, as oil is priced in dollars.

Top bosses will have earned more by midday on Wednesday than typical workers earn in the entire year, the High Pay Centre think tank has said. Branding it “Fat Cat Wednesday”, it says that is the time executives will pass the average UK salary of £28,200. High Pay Centre director Stefan Stern said it was an important reminder of the unfair pay gap in the UK. The government is considering plans to make firms reveal the pay gap between chief executives and average workers.

Rail passengers are facing higher fares across the UK as average price increases of 2.3% are introduced on the first weekday of the new year. The increase covers regulated fares, including season tickets, and unregulated, such as off-peak tickets. Campaigners said the rise was a “kick in the teeth” for passengers after months of widespread strike disruption. The government said it was delivering the biggest rail modernisation programme for more than a century. The increase in fares came as a strike by conductors on Southern Rail entered its third day, as a long-running row about the role of guards on new trains continued. The RMT union began the 72-hour walkout on New Year’s Eve, while another strike is set for 9 January.

Company and economic announcements planned for the week commencing 2nd January 2017