Rolling business and financial news through the day
Latest: Britain's private sector creating jobs at fastest rate since 1997
Service sector firms raise wages as orders flood in
Eurozone private sector expanded in May
But French service sector contracted
11.41am BST
Over in Greece, neo-nazi Golden Dawns partys imprisoned leader is currently testifying before the Athens parliament.
For the first time in the history of the Greek parliament an elected political party leader has been brought before the House in handcuffs and under draconian security. Imprisoned for the past eight months on charges of operating and directing a criminal organization, Golden Dawns leader, Nikos Michaloliakos, was rushed through the side door of Athens parliament building as around 500 diehard Golden Dawn supporters, gathered in Syntagma square, shouted leader, leader, our great leader. In an unprecedented step, police cordoned off the central boulevard that runs past the parliament - and stepped up security in the House itself - in a bid to thwart incidents of violence.
Michaloliakos was taken to parliament with his second-in-command Christos Pappas and Ioannis Lagos, an MP accused of ordering the killing of a Greek rapper last year, who like him are also being held in pre-trial custody at Athens top security Korydallos prison.
All three will deliver testimonies of defense before the House. As I write Lagos is giving a rousing speech denunciating the fabricated charges brought against him. To his left and right are Micholiakos and Pappas seated in the benches reserved for Golden Dawn MPs.
Far right #GoldenDawn supporters outside parliament before debate on lifting immunity of jailed leader, MPs. #Greece pic.twitter.com/pkP2hAjBQr
Golden Dawn's 2nd-in-command quotes Gandhi: 'First they ignore u, then they ridicule u, then they fight u, then u win' #toosurrealforwords
11.27am BST
The EC's official statement, saying Lithuania is ready to join the euro, is here:
11.24am BST
Olli Rehn added that joining the eurozone will be a major, hard earned and welcome achievement for Lithuania and its people.
11.18am BST
Over in Brussels, the European Commission has given Lithuania the green light to join the eurozone.
Yes, two years on from the heights of the debt crisis, countries are looking to join the euro rather than quitting it.
To adopt the euro, a country has to have government debt no higher than 60 percent of gross domestic product, a budget deficit below 3 percent of GDP, low inflation and interest rates and its own currency has to be stable against the euro.
The formal decision to accept Lithuania into the euro zone will be taken by EU finance ministers in the second half of July, at which point the ministers will also agree on a conversion rate of the litas currency into the euro.
In new report, @EU_Commission recommends #Lithuania join #eurozone in January 2015. #EU ministers to decide by July. pic.twitter.com/KFiDJu0Z6j
11.01am BST
But it's a darker picture in the eurozone, with Eurostat reporting that the prices charged by manufacturers continued to fall in April, adding to deflationary pressures.
Producer prices fell by another 0.1% during April, meaning they were 1.2% lower than a year ago.
@katie_martin_FX yes. Me
10.52am BST
Here's another sign that the UK labour market has improved (on top of the surge in hiring)
The UK's Office for National Statistics has issued data this morning showing that Britain's employment rate has, finally, returned to its long-term average:
10.27am BST
Back in the eurozone.... Eurostat has confirmed that GDP across the euro area grew by just 0.2% in the first three months of 2014.
That is in line with its initial estimate.
10.05am BST
Job creation across the entire UK private sector remained at April's 17-year high in May, Markit has also calculated.
It says:
The strongest rate of job creation was seen in the construction industry, followed by services. Although still robust, employment growth in manufacturing was tempered by the desire to boost productivity.
With every strong PMI reading, the more lively the discussion will become among the Bank of Englands Monetary Policy Committee that a pre-emptive early hike in interest rates is warranted. However, with inflationary pressures remaining subdued, the case for higher rates is by no means clear cut.
Although the rate of increase slowed very slightly, it remained close to an all-time high and indicative of the sector expanding by approximately 1.5% in the second quarter.
This would be the best performance the goods-producing sector has seen since the initial rebound from the financial crisis in the second quarter of 2010 and builds on the strong 1.4% rise seen in the first quarter.
9.52am BST
Just in -- UK service sector firms are taking on staff at a rate not bettered in 17 years, as activity continues to grow strongly.
And in another encouraging sign - they're paying their staff more too, as new orders flood in.
The UK economy continued to boom in May, in what is the best spell of growth since 2007. The buoyant services PMI follows similar upbeat manufacturing and construction reports, which collectively suggest that the economy is on course to grow by 0.8% again in the second quarter.
Firms in the services sector are creating jobs at a level seen only once since 1997 and offering bigger salaries to boot; a sign of ever-increasing confidence in the sector, which is enabling firms to support expansion and take advantage of improved economic conditions.
Whilst increased salaries are driving up operating costs, alongside suppliers looking to increase their margins, there is willingness to invest. This is being driven by strong domestic and overseas markets, suggesting we can be confident this positive trend will continue.
Service sector purchasing managers' index 58.6 in May, versus 58.7 April. All three sectors of the economy maintaining good growth rate.
Strong service sector PMI for May. Interestingly firms are reporting increasing wage bills alongside strong employment growth.
9.38am BST
This chart shows how France's private sector has slipped back into contraction, while Spain and Italy's firms are finally reporting growth.
9.34am BST
Oh, and we're running a poll on whether Phil Clarke will still be Tesco CEO in a year's time:
@Josh_CityIndex about a year ago...!
9.26am BST
Our full story on Tesco's results, and the pressure mounting on Phil Clarke, is here. (Tesco's shares are now down almost 1%, by the way, as the City digests the details)
9.15am BST
The eurozone private sector is on track for its best quarter in three years, despite being dragged back by France's weak economy.
Data firm Markit reports that its Eurozone PMI Composite Output Index came in at 53.5 for May, slightly lower than Aprils near-three year high of 54.0. That shows that manufacturing and service sector firms across the region continued to expand last month.
Germany continued to report strong output growth, with manufacturers and service providers both benefitting from rising new order inflows. In contrast, output in France fell back into contraction, reflecting the ongoing weakness of the French domestic market.
Elsewhere among the big-four economies, output rose further in both Italy and Spain. Rates of growth ticked higher in Italy and stayed close to Aprils seven-year record in Spain.
Germany and Spain reported further jobs growth, while Italy saw a slight increase for the first time in three years. France reported further cuts.
9.05am BST
Germany's service sector grew at the fastest pace in almost three years, putting France's trouble into stark perspective.
Markit's Service sector PMI rose to 56.0, from 54.7 in April, showing that activity picked up. It's an "encouraging sign" for Germany's economy, Markit says.
9.01am BST
The bad news keeps coming for France too --- its service sector has slipped back into contraction.
Data firm Markit reports that its French service sector PMI fell to 49.1 in May, from 50.4 in April, indicating that activity across the sector fell.
The French service sector disappointingly sank back into contraction territory during May, with activity falling for the first time in three months. A sluggish demand environment was blamed for a further drop in new business, while companies responded by cutting employment again.
Whats more, competitive pressures necessitated a sharper cut in output prices despite faster input cost inflation, putting pressure on companies operating margins. After GDP stagnated in Q1, there seems to be little evidence of the French economy turning the corner so far in the second quarter.
More economic woe for #France "Service sector activity falls for first time in three months during May #PMI
#France in econ trouble RT @cigolo French May Final Composite Pmi Falls To 49.3 (April Final 50.6, May Flash 49.3)
8.49am BST
That poor Russian economic data means it's heading into recession, suggests Chris Williamson of Markit.
#Russia heading for another recession as PMI signals steepest downturn for 5 years in May http://t.co/rKfhwerFcS pic.twitter.com/jbHrz6MTYf
8.48am BST
We've also seen evidence that Russia's economy is continuing to deteriorate.
Output across Russia's manufacturing and service sectors fell at the fastest rate in five year, according to HSBC data.
Overall, the PMI survey signals another leg down in the Russian economy is most likely in the coming months before the situation can start improving, if the resumption in new order growth in manufacturing continues. The ongoing recovery in the 'transport & storage' sector in services is also encouraging in this respect.
8.37am BST
Speaking of the eurozone, the FT's Peter Spiegel suggests that we may get an update on Lithuania's bid to join the single currency later today.
Will #Lithuania become the 19th member of #eurozone? I suspect we'll know more at midday. cc: @ollirehn
8.28am BST
In the eurozone, Spain's service sector has now expanded for the seventh month running, although the pace slowed a little last month.
Markit's monthly PMI index, which measures activity across the sector, dropped to 55.7 May from 56.5. Crucially, that's still over the 50-point mark showing growth.
However, there was further evidence of a reluctance among companies to increase staffing levels at a rate comparable with growth of new work, despite another build-up of outstanding business and strong optimism regarding the prospects for growth of activity.
8.17am BST
Tesco's boss may only have a year to get things right, reckons Julie Palmer, retail expert at Begbies Traynor.
With growing scepticism over the viability of his plans and leadership, I expect Philip Clarke has at most 12 months to prove his worth before investors demand more drastic measures.
While Aldi and Lidl have carved out a customer base at the value end of the market, Asda and Sainsburys in the middle and Waitrose and M&S at the top, Tescos brand identity has lost its way. The Groups overhaul of its shopping experience couldnt come sooner as customers have been put off by Tescos complex multiple buy offers and outdated stores, which are only now being upgraded.
8.08am BST
Veteran analyst David Buik says Tesco's shares rose this morning because today's numbers are "marginally less awful than expected".
8.04am BST
The London stock market is open.... and Tesco's shares have risen almost 2%.
Some analysts had predicted an even steeper fall in sales, of up to 4.1%, so there's relief that today's figures aren't worse.
8.00am BST
Phil Clarke insisted that his strategy is working. But John Ibbotson, director of the retail consultants, isn't convinced.
Ibbotson says:
"Despite the PR spin, Philip Clarke's turnaround plan is not working."Revamping stores with posh bakeries, Giraffe restaurants and a paltry £200m in price cuts is not enough to address the seismic shift in UK retailing."
7.49am BST
Tesco CEO Phil Clarke is fielding questions from financial reporters on today's results.
My colleague Sean Farrell is on the call, and reports that Tesco is promising more price cuts ahead -- but also vowing to end short-term gimmicks.
Tesco CEO Clarke says signed up more clubcard customers in last six weeks than in previous 30 weeks because of fuelsave offer.
In preamble, Tesco CEO Clarke says "loyalty is the prize worth having". Wants to get rid of "short-term gimmicks".
Tesco CEO Clarke says he's "not making any promises about sales improvements in the next few quarters".
Tesco CEO Clarke says "price is an important part of the story but it's not the only story".
Tesco CEO Clarke says "there's more [price cuts] to come but the ones we've done were the most important for our customers".
Tesco CEO Clarke says "I haven't seen a quarter of like for like sales like this before that I can remember".
7.41am BST
There's not much in Tesco's results to inspire confidence, says Josh Raymond of City Index.
My honest opinion on #tesco q1. Thought it could have been worse but nothing here to inspire confidence.
May get worse at Tesco before it gets better. Turnaround to "continue to impact our headline performance throughout the coming quarters".
7.38am BST
This chart shows how the fierce price war raging in Britain's supermarket sector sent Tesco's UK sales sliding in the last three months, at a faster rate than the previous quarter:
Our like-for-like sales performance in Asia has improved since the last quarter despite the continued effect of the political situation in Thailand. In Europe, like-for-like sales were positive in the Czech Republic, Hungary, Polandand Turkey.
Whilst Ireland remains intensely competitive with high levels of untargeted couponing in the market, our performance there is starting to improve.
7.30am BST
Tesco's troubles continue, with a hefty drop in sales across the UK as chief executive Phil Clarke continues to battle to turn Britain's biggest retailer around.
It has just reported that like-for-like sales in the UK slumped by 3.8% in the last quarter.
We are pleased by the early response to our accelerated efforts to deliver the most compelling offer for customers.
We expect this acceleration to continue to impact our headline performance throughout the coming quarters and for trading conditions to remain challenging for the UK grocery market as a whole.
Tesco still looks in stead decline - like for like sales fall again. Down 4% as it continues to lose customers to its rivals.
7.29am BST
Good morning, and welcome to our rolling coverage of the financial markets, the world economy, business and the eurozone.
There's lots for data junkies this morning. New Service Sector data is being released through the day, showing how the private sectors in Asia, Europe and the Americas fared.
Continue reading... |
| READ THE ORIGINAL POST AT www.theguardian.com |