Few economists expect fresh action from the ECB today, despite eurozone inflation dropping to just 0.5%
UK service sector growth hits nine-month low
Euro firms keep slashing prices
Preview: ECB governing council meets today
Mark Carney won't rule out UK rate rise before election
12.34pm BST
Speaking of Spain, the Madrid Treasury held a successful debt auction this morning -- raising almost 5.6bn at lower yields (interest rates). This included 1.6bn of 10-year debt, at a yields of just 3.29%.
Ishaq Siddiqi of ETX Capital reckons "the worst of the crisis" is over in Spain:
Moreover, its a fine example of a peripheral country implementing structural reforms, initiatives and austerity to stimulate growth better than Italy, Greece and Portugal.
Furthermore, Spain just sold a total of EUR5.58b of bonds in an auction which we well-bid with ample demand, confirming the upbeat picture surrounding investor appetite for Spanish debt its hard not to be inspired by Spains progress.
12.23pm BST
As we await the ECB rate decision a reminder that there are only a couple of analysts surveyed going for a cut Goldmans predict -ve rate
12.11pm BST
Spain's stock market is outpacing the rest of Europe.
The IBEX has gained 0.8% today, as Madrid traders welcome the news this morning that the Spanish service sector grew at a faster pace last month (see this morning's blogpost for the details)
12.03pm BST
Just under forty-five minutes until the European Central Bank announces the result of today's governing council meeting.
Economists still don't expect any new measures from the ECB, despite inflation hitting just 0.5% last month.
"The ECB is primarily concerned about what is happening with inflation, and yes we have too little for the ECB's comfort.
"But I think they want to see if the most recent set of numbers marks a trough before acting further."
11.47am BST
The Bank of England has also released correspondence with prisoners who were incarcerated in the 18th and 19th century for the crime of forging banknotes.
Johanna McCarthy writes on 8 April 1818 from the Maria ship at Deptford that I am quite destitute of money and friends and have been confined in Newgate Bristol 13 months.
The Committee for Lawsuits records that McCarthy and two other female convicts who were on the point of sailing to Botany Bay be paid £5 each by the Solicitor in response to their pleas for relief.
11.27am BST
This is rather neat - the Bank of England has released a swathe of new documents from its archive.
The @BankofEngland as it looked in 1922 (From this great BoE flickr set https://t.co/CX4jl56Vmf) pic.twitter.com/aIiinNJMmA
11.14am BST
Willem Buiter, Citigroup's chief economist, reckons the European Central Bank won't take action today, but Mario Draghi may express concern over the strength of the euro:
Citi Buiter: "ECB will say tut tut abt the exchange rate today. The euro is on steroids. It's really hurting. But they will prob do nothing"
11.06am BST
Europe's stock markets are treading water ahead of the ECB decision and press conference.
The news overnight of a new mini-stimulus package in China has not sparked a rally (Beijing is putting more money into railway construction, and offering new tax breaks to small firms)
Macro event positioning, which is a clever way of saying doing nothing ahead of the European Central Bank meeting and non-farms, is the order of the day.
Scribes at UBS have boosted Tullow Oil (4%) to the top of the index this morning by upgrading them to buy, and the market likes B&Q owner Kingfishers (+2%) spot of cross-channel shopping as they pick up a controlling stake in French DIY chain Mr Bricolage.
10.45am BST
10.37am BST
Retail sales across the eurozone rose 0.4% last month, according to Eurostat, which may calm some fears over the state of Europe's economy.
The stats body reports that the retail sales in the non-food sector rose 0.8%, and there was a 0.3% increase in Food, drinks and tobacco. Automotive fuel sales fell by 0.8%.
Februarys further growth in retail sales boosts hopes that consumers are perking up and can help Eurozone growth to firm.
Strong retail figures today should put the euro zone deflationistas back in their box for another month. Surprise 0.4% rise in March.
The highest [monthly] increases in total retail trade were registered in Malta (+1.9%), Denmark, Romania and the United Kingdom (all +1.4%) and Germany (+1.3%), and the largest decreases in Estonia (-3.4%), Poland (-1.5%), Slovenia and Finland (both -1.4%).
10.19am BST
Andrew Tyrie also asked George Osborne about the Financial Services Authority, and the botched way it pre-briefed its inquiry into the life insurance industry last week.
10.07am BST
Heads-up: Chancellor George Osborne is appearing before the Treasury committee to discuss last month's Budget.
10.02am BST
And here's the chart showing how new orders into Britain's service sector dropped last month:
9.43am BST
Just in - growth in the UK service sector has fallen to its lowest rate since last June, but is still fairly robust.
Markit's UK Services PMI, based on data from thousands of firms across the country, dropped to 57.6, from 58.2 in February.
"As a whole, we may be seeing a slight downward trend at the start of this year, but we are hopeful that this healthy outlook is where we are now heading.
PMI is good news for us who think that UK rate expectations have got too far ahead of themselves and sterling is too high at the moment
While March saw growth slow across the services, manufacturing and construction sectors, all three continue to expand at very strong rates, meaning the economy looks to have grown by at least 0.7% again in the first quarter.
9.24am BST
Growth across the eurozone private sector slowed a little in March and firms kept slashing prices in a bid to drive demand - adding to already weak inflation in the euro area.
Markit's 'Composite PMI', based on this morning's service sector data and manufacturing reports early this week, fell to 53.1 from 53.3 a month earlier.
BREAKING: Euro zone March final composite PMI 53.1 vs 53.2 flash and 53.3 in February
Prices charged by manufacturers fell for the first time in seven months and charges levied for services were cut at a stronger rate, having fallen continually over the past 28 months.
The weakening price indices will stoke fears that deflationary forces are intensifying amid weak demand and near-record unemployment. But the survey responses also show that companies are pricing more aggressively, having become leaner and more productive which bodes well for competitiveness.
9.03am BST
That German service sector PMI reading is someway below expectations....
A 1-point downward revision to the German services PMI, that's very unusual and surprising given domestic/retail strength.
8.59am BST
But growth in Germany's services sector slowed in March, with its Services PMI falling to 53.0 from 56.4 in February. That's still comfortably in 'expansion' territory (>50).
8.58am BST
France's services sector has reported its strongest growth in over two years, with its Services PMI jumping to 51.5, from 47.2 in February.
8.57am BST
Bad news from Italy - activity in its service sector shrank last month, as firms failed to maintain the momentum recorded in February.
Unlike in manufacturing, where a recovery is now in full flow, the service sector looks to be stuck in a low gear with subdued domestic demand still weighing on activity.
Confidence among consumers and businesses alike is finally being restored, however, a factor which may help stimulate growth going forward.
8.51am BST
Spain's service sector has grown for the fifth month in a row, but firms are cutting jobs, according to Markit's monthly survey of purchasing managers across the country.
A further solid reduction in prices charged was recorded as companies reacted to strong competition and pressure from clients for discounts.
8.41am BST
Bank of England governor Mark Carney has refused to rule out raising interest rates ahead of next May's general election, in a trip to Durham.
Asked if he would rule out a rise before next Spring's election, he said: "No, absolutely not.
"When you raise interest rates it is a welcome sign. I share my colleague Charlie Bean's view that it is confirmation the economy is recovering after some very difficult years.
"I'm not sure we will get a lot of cards or letters to thank us, but we will do it when it needs to happen.
8.19am BST
There's a broad consensus that the ECB is unlikely to take action today, even though inflation is at a four-year low.
Policymakers have been willing in recent weeks to publicly broach cutting deposit rates below zero - effectively charging banks to hold cash with the ECB - or embarking on bond purchases as the United States, Japan and Britain have.
A straightforward cut in the ECB's main refinancing rate to 0.1 percent from 0.25 percent - or more complex changes to existing market programmes - are other possibilities.
Many believe persistent low inflation will force the ECB to ease further this year, but only three of the 57 economists polled by Bloomberg expect such an announcement to come out of Thursday's meeting.
Laurence Boone and Ruben Segura-Cayuela, from Bank of America, say their "inflation surprise" index keeps ratcheting lower as one shock after another hits the eurozone, while their gauge of "deflation vulnerability" has been flashing red for most EMU countries.
The effect is deeply corrosive even if the region never crosses the line into technical deflation. "Lowflation" near 0.5pc can play havoc with debt trajectories if it goes on for long, ultimately throwing Europe back into a debt crisis. "The biggest threat to public debt dynamics is weaker-than-expected inflation. Merely lower than expected inflation, not even deflation, would lead to a significant deterioration in countries public finances," they said.
8.02am BST
Also coming up today....
7.55am BST
Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.
More monetary easing, including through unconventional measures, is needed in the euro area to raise the prospects of achieving the ECB's price stability objective.
this time is different: few expect something #ECB
The consensus still remains for rates to remain on hold, but it is slowly shifting to some form of action with some predicting a cut of 0.15% in the headline rate and a negative deposit rate. This still seems unlikely at this stage, and even if implemented would have little lasting effect after the surprise factor had been digested.
On the subject of a negative deposit rate, the implementation of such a measure could well do far more harm than good, particularly with so many European banks already struggling for profitability and looking to build up their balance sheets in preparation for the upcoming Asset Quality Review so that they can pass the ECB mandated stress tests due later this year.
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