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UK services PMI fell in July The services PMI in the UK eased to 57.40 in July, lower than market expectations of a drop to 58.00. The services PMI had recorded a reading of 58.50 in the prior month.

At 0330GMT today, Brent crude oil one month futures contract is trading 0.24% or $0.12 higher at $49.71 per barrel. Yesterday, the contract declined 0.8% or $0.40, to settle at $49.59 per barrel, after the EIA report indicated that US crude output increased by 52,000 barrels a day to 9.5 million barrels a day in the week ended 31 July. Also, US refiners operated at their highest rates last week since 2005 while inventories of gasoline and distillate rose in the previous week.

Business highlights: •Legal & General Retirement delivered a 49% rise in operating profit to £280m, reflecting the increased scale of the business (annuity assets up 13% to £43.4bn) and accelerated implementation of the 'capital-lite' business model, which sees a higher proportion of profit being booked in the first year. Bulk annuity sales were £1,146m, from 23 policies (H1 2014: £3,135m from 25 policies). This business line is inherently lumpy. Individual annuity sales more than halved to £180m following the 2014 Budget changes. •Legal & General Investment Management (LGIM) delivered 12% growth in total assets to £714.6bn, driven by strong demand for Liability Driven Investment (LDI) solutions, Active Fixed Income and Multi-Asset strategies, and strong demand for LGIM's workplace proposition. Operating profit rose 13% to £176m. Index external net flows significantly improved on last year to net outflows of £1.2bn (H1 2014: £8.3bn), as the group had more success in winning index mandates from international clients. •Insurance division - UK protection premiums were up 4% to £774m. Savings assets were up 7% to £110.8bn with workplace assets increasing by 38% to £13.1bn, benefiting from the trend towards auto enrolment. Operating profit rose 7% to £192m. •L&G Capital - Direct investments increased by 35% to £6.2bn as the group increased investment in alternative assets such as housing, urban regeneration, alternative finance and clean energy to match its long term liabilities. Operating profits rose by 13% to £115m •Other Divisions, including Savings and L&G America saw profits drop 7% to £90m in total. Nigel Wilson, Group CEO, commented: "Legal & General continues to deliver strong organic growth in the UK and the US from both our developing and established, market leading businesses. In addition we are disposing of, or closing non-core businesses and reducing costs in real and nominal terms. The actions that we are taking allow us to focus on our chosen markets, enable us to continue to deliver low prices and better value for our increasing customer base and deliver attractive returns for our shareholders."

Legal & General delivered another double-digit rise in net cash generation, operating profit and adjusted earnings per share (EPS) during the first half of its financial year. Net cash generation rose by 11% to £629m, divisional operating profit was up 19% to £853m and adjusted EPS rose by 15% to 9.79p. Return on equity improved to 19.1% (H1 2014: 17.6%). This enabled the interim dividend to be lifted by 19% to 3.45p per share. The shares have responded positively, up 3% in early morning trading. Our view: Legal & General is a market leader in the provision of low cost investment products and services, having been an early entrant into the tracker funds market. It has subsequently built up a substantial passive investments business. Growth has been strong in recent years, allowing L&G to increase the dividend to shareholders in each of the last five years. L&G serves markets with a lot of inherent growth potential. They have a 20% share of the auto-enrolment pensions market, and by 2018 the vast majority of employees will have to have been signed up, by law. Contributions from its auto-enrolment pension scheme members should rise strongly over the next few years. It has plenty of scope to sign up new schemes too, with the number of people auto-enrolled expected to treble between now and 2030. Changes to pension rules have seen L&G's individual annuity sales fall sharply. However, demand for L&G's bulk annuity schemes and liability-driven investment products should remain strong, as more companies seek to de-risk their defined benefit (DB) pension schemes. The UK DB market is worth over £1,000 billion with only about £50bn currently insured. The group focuses on cash generation, which provides a solid backdrop for the dividend. Since 2008, the group's net cash generation has risen from £320m to £1.1bn per annum. On current market forecasts the stock will yield 4.9% (variable and not guaranteed) this year, with analysts predicting further increases in the dividend for future years. Register to receive Legal & General share research updates direct to your inbox for free Business highlights: •Legal & General Retirement delivered a 49% rise in operating profit to £280m, reflecting the increased scale of the business (annuity assets up 13% to £43.4bn) and accelerated implementation of the 'capital-lite' business model, which sees a higher proportion of profit being booked in the first year. Bulk annuity sales were £1,146m, from 23 policies (H1 2014: £3,135m from 25 policies). This business line is inherently lumpy. Individual annuity sales more than halved to £180m following the 2014 Budget changes. •Legal & General Investment Management (LGIM) delivered 12% growth in total assets to £714.6bn, driven by strong demand for Liability Driven Investment (LDI) solutions, Active Fixed Income and Multi-Asset strategies, and strong

Insurer Legal & General posted an 18% rise in first-half operating profit and a 6% increase in pre-tax profit thanks to strong organic growth in the UK and US, as it raised its interim dividend despite a fall in annuities.

Mortgage rates start to climb off record lows: Mortgage rates are creeping up, ending years of decline and raising affordability fears for young homeowners.

Post-election house building growth slows: House building grew at one of the weakest rates for more than two years in July as the post-election bounce showed signs of fading, according to figures.

Russia’s economy hit hard by falling oil prices and Western sanctions: Russia’s economy is set to shrink by 3.4% this year as Western sanctions and falling oil prices take a heavy toll.

No silver lining for Fresnillo: It is not only the price of gold that is falling sharply, silver has also entered a downward spiral - and that is causing a slump in profits at U.K.-listed Mexican mining group Fresnillo. The prices of all commodities, from iron ore to gold and silver, are falling as the world’s largest consumer, China, sees its economy slow down. The price of silver slumped to a six-year low this week of $14.60 an ounce, down almost 70% from its peak in 2011. Fresnillo, which operates silver and gold mines in Mexico, revealed that profits in the first half of the year had fallen by 44% to $76.4 million. The market expects pretax profits of about $250 million for the full year to the end of December, a sharp reduction on the $1.5 billion profit made in 2011, when both gold and silver prices peaked. Fresnillo is one of the lowest cost producers of gold and silver, and can cope with lower market prices. The company produces 90% of its silver revenues from mines at Saucito and Fresnillo at an average all-in cost of about $8.50 per ounce. Around 73% of gold revenues come from mines at Herradura and Noche Buena at an average all-in cost of about $900 per ounce. The company has reduced costs and cut capital spending, but unless there is a recovery in gold and silver prices it would be very dangerous for investors to look for a bargain here. Fresnillo at 645p +12p. Questor says “Avoid.”

Addicted to quack: Sir Sandy Crombie left a relay baton on the desk of David Nish in 2009 when he handed over the job of Chief Executive of savings group Standard Life. Mr Nish, an outstanding Boss, has promised to leave the same baton for Keith Skeoch, who succeeds him. The company, which announced half-year statutory operating profits had risen a decent 6%, now waddles and quacks more like a fund Manager, with fee-based revenue rising from 70% to 95%. Its shares trade at a premium to most peers at 18 times future earnings. Regulatory challenges are multiplying. Investors looking for an insurer unembarrassed by that title might consider Direct Line, which sells home and motor cover. In a scenario where Standard Life’s rating was set to converge with those of fund Managers, and Direct Line stock was to catch up with better-rated insurers, it could pay to sell one and buy the other.

High Court blocks Tory plan to slash levy for affordable housing: An “insane” Government planning policy that could have allowed luxury landlords to escape more than £1 billion a year in affordable-housing payments has been quashed by the High Court.

Dubai plans world’s tallest residential tower: Not content with having the world’s tallest skyscraper, biggest shopping centre and largest artificial islands, Dubai announced that it plans to build the highest residential building

UK construction PMI fell surprisingly in July The construction PMI in the UK registered an unexpected drop to 57.10 in July, compared to a level of 58.10 in the previous month. Market anticipation was for the construction PMI to advance to 58.50.

UK house prices rose as expected in July On an annual basis, in the UK, the non-seasonally adjusted house prices advanced 3.50% in July, compared to an advance of 3.30% in the prior month. Market expectation was for house prices to climb 3.50%.

At 0330GMT today, Brent crude oil one month futures contract is trading 0.5% or $0.25 higher at $50.24 per barrel, ahead of the Energy Information Administration weekly oil inventory data, scheduled to be released later today. Yesterday, the contract climbed 0.95% or $0.47, to settle at $49.99 per barrel, amid expectations that the EIA would report a drop in the US crude oil supply for the previous week. Moreover, the American Petroleum Institute (API) also reported a decline of 2.4 million barrels in US oil inventories last week

Homes in the majority of places in England and Wales are now more affordable than they were in 1997 thanks to falling inflation, low interest rates and rising wages. For the average householder their ability to buy a home has improved over the last 18 years, according to research from Hamptons International

Axa Real Estate raises €2.9 billion for its ninth European debt fund: Axa Real Estate Investment Managers said it has raised €2.9 billion (£2.04 billion) for its ninth debt fund, making it one of the largest commercial real estate (CRE) senior loan funds in Europe.

Almacantar to Shell out £550 million on iconic office: Centre Point Owner Almacantar has bought part of Canary Wharf Group and Qatari Diar’s controversial Shell Centre scheme on London’s South Bank, which faced opposition last year for obstructing views of the Houses of Parliament.

North Sea shrugs off falling prices and sees first increase in production in 15 years: Price pressure and cost-cutting can apparently be good for some industries.

Iran promises to pour its oil on troubled waters: Oil prices slid to their lowest level in more than six months after Iran indicated that it would boost production as soon as sanctions against it were removed.