Rolling coverage of the latest economic and financial news, including the latest healthcheck of Britain and Europe's service sectors, the AstraZeneca bid, and the OECD's new economic forecasts
AstraZeneca emphasises strong prospects
OECD warns UK over house prices
UK service sector growth hits five-month high
Markit: strongest eurozone growth since May 2011
5.29pm BST
Continuing concerns about Ukraine, poor Chinese manufacturing figures and disappointing results from Barclays and Aberdeen Asset Management outweighed positive eurozone growth rates to leave markets floundering. The final scores showed:
The FTSE 100 finished 23.86 points or 0.35% lower at 6798.56
5.17pm BST
Over to Greece, where despite the countrys seemingly improved economic performance, fears of political instability are mounting ahead of this months European elections. Emergency talks took place this afternoon between the coalition governments leaders, reports Helena Smith:
Ostensibly, prime minister Antonis Samaras met with his junior coalition partner, Evangelos Venizelos, to discuss the issue of the countrys debt following Mondays eurogroup decision to finally tackle what is widely seen as the root of Athens financial woes later this year. But emerging from the meeting, Venizelos, who is both Greeces deputy prime minister and foreign minister, gave voice to what is now uppermost in his mind declaring: Without us, there is no government...because if you don't have the mandate, or even the tolerance, the understanding of the Greek people you cannot proceed. That is how democracy works."
He added that a collapse in support for the centre left would create a "problem of legitimacy" for a national salvation government based on concensus.
5.02pm BST
The CBI has joined the chorus of voices commenting on the possible bid for AstraZeneca by Pfizer, and is unsurprisingly against protectionism. The director general of the business leaders group, John Cridland, said:
The most important issue for British business with this proposed takeover is the strength of the UK scientific research base of which pharma is a critical part.
Open markets are an asset for the UK and the CBI does not support protectionism.
4.04pm BST
Dixons Retail shares have jumped 4% following a report its proposed £3.7bn merger with Carphone Warehouse will be unveiled ahead of a Takeover Panel deadline on 19 May.
Sky News said the deal would be a 50-50 merger of equals.
3.44pm BST
My colleague Andrew Sparrow is following all the action from parliament as Vince Cable comments on the AstraZeneca/Pfizer situation.
The details start here in the politics live blog but here is a flavour:
Vince Cable says the government wants to ensure that Britain is at the forefront of life sciences.
There has not yet been a formal bid, he says.
3.40pm BST
AstraZeneca is keeping up its defence with a conference call following its update earlier:
AstraZeneca boss Pascal Soriot says overall shareholders have been supportive; will listen to them more in coming days
AstraZeneca boss Pascal Soriot adds 'you would expect in a situation like this a range of opinions' among shareholders
AstraZeneca CE says takeover by Pfizer could have "negative impact" on company's ability to develop "exciting" drugs in pipeline.
Cable: UK government will approach Pfizer bid for AstraZeneca with "even-handed neutrality."
Cable says govt v live to 'national interest' - swipe at Osborne, we see UK as 'knowledge economy not a tax haven'
Vince on Pfizer/AZ: "using public interest powers a serious step and not one to be taken lightly. I am open minded about it"
3.08pm BST
Back with AstraZeneca, and ahead of a question in the commons, UK chancellor George Osborne said the government would support a takeover by Pfizer if it provided jobs for Britons. When asked about the possible deal by reporters he said (quote courtesy Reuters):
Our sole interest here is in securing good jobs in Britain, good manufacturing jobs, good science jobs. That's what I'm interested in and we'll support any arrangement that delivers that for Britain.
Osborne on AstraZeneca: "well take no lectures from last govt..when there were takeovers did nothing to protect Brits nat econ interest"
2.42pm BST
Royal Mail has ruled out a pay rise for chief executive Moya Greene.
Greene, who was paid a total of £1.22m last year, apparently opted against an increase in basic salary or a new incentive scheme. Royal Mail said the remuneration committee had taken her wished into account.
@vincecable on @RoyalMail boss pay freeze: "I admire the restraint the board has shown." Or otherwise, phew, that's one row avoided .
2.05pm BST
Over in the US, the country's trade deficit narrowed in March as exports improved.
According to the Commerce Department the trade gap fell 3.6% to $40.4bn, down from $41.9bn in February (revised from a reported $42.3bn). This is virtually in line with a forecast of $40.3bn. Reuters reports:
March's shortfall, however, was a little bigger than what the government had assumed in its advance first-quarter gross domestic product estimate last week, suggesting the economy contracted in the first three months of the year.
The trade report was the latest indication that the government is likely to lower its growth estimate to show a contraction when it publishes revisions later this month.
1.59pm BST
Ahead of this week's meeting of the European Central Bank, which has to decide whether to cut rates or unveil a bond buying programme, Italian 10 year bond yields have fallen below 3% for the first time.
#Italy's 10-year yield falls to 2.999, first time ever below 3%. Meanwhile, euro keeps rising toward 1.40. Draghi's conundrum...
12.52pm BST
Interesting....
Former AstraZeneca CEO Sir David Barnes has written to @ChukaUmunna outlining his concerns over Pfizer deal. Details http://t.co/PyXeAkDhfz
12.50pm BST
Time to recap, after a busy morning.
12.39pm BST
Just hearing that a government minister will discuss Pfizer's bid to take over AstraZeneca at 3.30pm, at an urgent question.
The Speaker has granted me an Urgent Question about Pfizer/Astrazeneca. It will be at 3:30, and allow me and others to raise questions #fb
12.04pm BST
Britain's MPs are fighting over themselves to quiz the bosses of AstraZeneca and Pfizer.
The chairman of Parliament's Science and Technology committee, Andrew Miller, just confirmed that it will hear from both companies -- just a few minutes after the Business committee announced it will hold a hearing soon.
11.59am BST
This interactive map lets you explore the OECD's new Economic Outlook report (as explained at 10.38am, it cut its global growth forecasts, but hiked them for the UK and the eurozone)
11.23am BST
AstraZeneca has just issued another rebuttal to Pfizer, by publishing a new strategic update which argues it has strong prospects as an independent firm.
The UK pharmaceutical firm declared that can achieve annual revenues of $45bn within the decade - that's a new target - thanks to its strong drugs pipeline and the progress made by its management recently.
excellent growth prospects, rapidly progressing pipeline and the future delivery of shareholder value as an independent company
"The increasingly visible success of our independent strategy highlights the future prospects for our shareholders. These are benefits that should fully accrue to AstraZeneca's shareholders."
11.02am BST
You can read the OECD's warning about the UK housing market here (a pdf of the full Economic outook).
I can't cut-n-paste from it, but here's the key section:
10.48am BST
The parliamentary Business, Innovation and Skills Committee has confirmed that it will hold a hearing into Pfizer's proposed takeover of AstraZeneca.
BIS says:
Both Pfizer and AstraZeneca will be among those invited to appear before the Committee. Further details will follow in due course.
10.38am BST
The Organisation for Economic Co-operation and Development (OECD) has urged the UK government to consider reining in the surge in house prices,and also predicted the British economy will growth strongly this year.
"Monetary policy tightening should be accompanied by timely prudential measures to address the risks of excessive house price inflation
House prices ... significantly exceed long-term averages relative to rents and household incomes."
OECD has revised up UK growth for 2014 to 3.2% - fastest in the G7 - supporting jobs & prosperity & showing #longtermeconomicplan working
Very low underlying inflation and large economic slack are expected to persist for several quarters [in the eurozone],"
"Accordingly, the main refinancing policy rate should be reduced to zero, and possibly the deposit rate to a slightly negative level, and they should be maintained at these levels at least until end-2015."
10.18am BST
Another gobbet of good economic news from the eurozone - retail sales rose by 0.3% across the region in March. City economists had expected a 0.2% decline.
10.13am BST
The UK economy is growing faster than the Bank of England had expected, says Rob Wood of Berenberg, following the news that the UK service sector grew pretty rapidly last month.
Wood writes:
Another very strong quarter is on the way in the UK. There is certainly very little sign of the slowdown in growth that the BoE had been banking on in their February forecasts, when they planned for interest rates staying on hold until mid-2015.
And neither should there be with consumer and business confidence returning, wage growth picking up and monetary policy still extremely supportive....
9.56am BST
News that Britain's service sector grew strongly last month has driven the pound higher against the US dollar, to a near five-year high of $1.695.
Traders are anticipating that the strength of the UK recovery is going to force the Bank of England into an interest rate rise, sooner than the BoE has indicated.
9.44am BST
Britain's service sector has posted its strongest growth of 2014, as firms rapidly taken on more staff to deal with increased demand as the recovery continues.
Markit's monthly UK services PMI jumped to 58.7 in April, up from March's 57.6 - showing strong growth, and the 16th monthly expansion in a row.
The UK economic recovery shows no signs of running out of steam, and growth could even accelerate further in the second quarter.
The upturn in service sector growth matches a similar acceleration to a near-record high for manufacturing output, while construction activity also continues to surge higher.
UK set for another quarter of strong GDP growth (c0.8%) as all-sector PMI up from 58.2 in Mar to 5-month high of 59.4 pic.twitter.com/LVQ82nBGGS
9.28am BST
Howard Archer of IHS Global Insight agrees that the eurozone recovery "gained traction", with Markit reporting that every country's service sector grew in April:
Encouragingly, services expansion picked up markedly in Germany in April, while particularly welcome news saw Spanish activity expand for a sixth successive month and at the fastest rate since March 2007. This fuels hopes that Spanish recovery is really taking hold. Meanwhile, Italy achieved modest renewed services expansion in April after a dip in March, although progress remains limited.
Meanwhile, Irish services expansion was particularly strong as it reached an 86-month high.
9.20am BST
Chris Williamson, chief economist at Markit, predicts that the eurozone will grow by at least 0.5% in the second quarter of 2014, based on April's strong PMI report.
He explains:
The final PMI confirms the earlier flash estimate, indicating that the Eurozone started the second quarter with the fastest growth seen for three years.
The upturn is led by Germany while France continues to lag, with the French PMI merely indicating near-stagnant growth.
On the periphery.... the most exciting news is the strong upturns that are becoming apparent in Spain and Ireland, where the rates of growth rose to the fastest for seven and eight years respectively. Italys recovery is meanwhile also gaining momentum, with the pace of growth rising to one of the fastest seen over the past three years.
The upturn in the rate of expansion further reduces the likelihood of the ECB considering it necessary to cut interest rates or embark on any other non- conventional stimulus measures, for which the bar is already high. While prices charged continued to fall in April, the accelerating speed of the recovery suggests price pressures should pick up in coming months to allay deflationary fears.
9.13am BST
Europe's private sector is growing at its fastest pace in almost three years, as firms in most countries report a welcome rise in activity.
Data from across the region shows that the manufacturing sector led the way, while service sector business activity rose at the fastest pace for 34 months.
The recovery in the eurozone economy gathered pace at the start of the second quarter, with the combined output of the manufacturing and service sectors rising at the fastest pace for almost three years in April.
France was the only nation to buck the trend, treading water with near stagnant output growth and a slight drop in new business. The sluggish performance of France was mainly centred on the service sector, highlighting the ongoing weakness of the French domestic market.
8.59am BST
Germany's service sector enjoyed another strong month in April, with its service sector PMI rising to 54.7 from 53.0 in March.
Firms said they'd hired more staff to deal with rising workloads, to handle a rise in new orders.
German services activity rises at faster pace in April. Headline index at 54.7 (53.0 in March) http://t.co/bVJiR0goux
8.55am BST
Growth in France's service sector almost stalled last month, as Europe's second largest economy struggled to match the recovery seen in, say, Spain and Ireland.
The French Service sector PMI fell to 50.4. from 51.5 in March, showing a sharp slowdown took place last month. It's still growth, but only just....
"The French service sector virtually stalled in April amid flagging new business intakes.
"Companies reported that persistent client uncertainty had held back spending, suggesting a lack of confidence in the sustainability of the recovery."
8.50am BST
Italy's service sector has started growing again, thanks to a jump in new orders.
The Italian service sector PMI rose to 51.1 in April, showing it expanded after sliding into contraction territory in March (when it hit 49.5). That may indicate that Italy's economy is avoiding dropping back into recession.
Despite the upturn in activity in April and there being a strong degree of optimism regarding the year-ahead outlook, services firms still maintained a preference for lower staffing numbers. Employment levels fell solidly on the month, and to the greatest extent so far this year.
Encouraging firms to part with staff was a continued lack of pressure on capacity. Indeed, backlogs of work were reduced for the thirty-eighth month in succession, and at a solid rate that was the fastest since January.
8.44am BST
Spanish service sector PMI rises to multi-year high, while unemployment drop is the largest since June 2013 ^KB #Spain
8.42am BST
FastFT makes a great point about Barclays -- the tumble in investment banking earnings (see 8.10am) meant it is now paying a bigger share of its profits to its staff.
Barclays revealed on Tuesday that it pared pay costs in the investment bank by 20% year on year, a significant cut - but less of a hit than the 28% fall in revenues across the business.
What may be more difficult for shareholders to stomach is that the unit's huge slide in income meant that Barclays was forced to set aside a much bigger proportion of revenue to pay its bankers - again after a poor performance.
8.35am BST
Spain has followed Ireland's lead, with its service sector firms also reporting their best month since March 2007, before the financial crisis began.
And Spanish firms also reported that they took on more staff -- making some impact into Spain's huge jobless total.
The recovery in the Spanish service sector gathered pace in April with activity and new business each growing at rates not seen since the economic crisis began in late-2007. Employment also increased, ending a two-month sequence of job cuts.
The Spanish service sector put in its best monthly performance since prior to the start of the economic crisis in April according to the latest PMI data, with workloads rising strongly.
A pleasing aspect of the latest data is the rise in employment, with the labour market having previously given little cause for optimism. While there is still a long way to go, improving sentiment in the wider economy does seem to be feeding through to gains at service providers in Spain, suggesting that this time positive momentum could be sustained.
8.27am BST
The euro has also risen against the US dollar this morning to $1.391 - its highest level in almost seven weeks.
8.26am BST
The pound is looking perky this morning . It just hit its highest level in almost five years against the US dollar, up 0.4% to $1.693.
Sterling Trades Above $1.6920; Highest Since August 2009
8.21am BST
Ouch. Shares in Balfour Beatty have slumped 16% at the start of trading in London, after it announced an unscheduled profits warning and the unexpected departure of its CEO.
These conditions have continued into 2014 and, taken together with poor operational delivery issues on a number of contracts and low order intake, the business has experienced an extremely challenging first quarter. As a result, our performance expectations for this business in 2014 are significantly lower than previously anticipated. Furthermore, in major building projects we have experienced further cost increases and delays, mainly on specific projects we highlighted in March.
8.12am BST
Barclays UK retail bank going great guns, problem (for once) is slump in revenue in investment bank (specifically fixed income down 41%)
8.10am BST
2014 has not been a great year for Barclays' investment bankers.
Investment bank profits fell 49% to £668m in the first three months of the year, it reported this morning, after a period of "difficult trading conditions".
Poor performance at the investment bank dragged Barclays' adjusted pretax profit down 5% to £1.69bn. Profit from retail banking rose 20% to £360m, Barclays said in a trading update.
The bank said: "We continue to be cautious about the trading environment in which we operate and as a consequence we remain focused on structurally reducing the cost base in order to improve returns."
7.53am BST
A surge in new business has helped Irish service sector companies to grow at their fastest rate since February 2007.
Investec's monthly survey of the sector also found that firms created new jobs at the fastest rate in seven and a half years, suggesting confidence is growing as Ireland puts its bailout programme behind it. The economic recovery in the UK may also be a factor.
Taken together, todays report and last weeks Investec Manufacturing PMI release show strong momentum across much of the private sector in Ireland. With an improving outlook both at home and across the countrys main trading partners, we expect that this momentum will be sustained over the remainder of this year at least.
7.39am BST
Good morning, and welcome to our rolling coverage of the financial markets, the world economy, business and the eurozone.
Today we'll be tracking the latest healthcheck of Europe's private sector, with the release of the monthly PMI surveys which track activity across thousands of firms.
Breaking: Barclays reports a fall in first-quarter profit to $2.85 billion http://t.co/4w65OYsegp
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