European Commission steps in with £1.35bn credit line, as Bulgaria's leaders urge citizens not to panic and withdraw their savings today.
UK economy probably bigger than pre-crisis peak
Eurozone inflation at four-year low
EC agrees to Bulgarian credit line
Bulgarian bank shares bounce back
4.51pm BST
Ahead of the manufacturing PMIs on Tuesday and the European Central Bank meeting on Thursday - not to mention the US non farm payroll figures the same day - markets have made a fairly quiet but mixed start to the week, writes Nick Fletcher. The fact that eurozone core inflation edged up suggested to some analysts that the ECB was unlikely to take further action in the short term, following last month's rate reduction. The final scores showed:
The FTSE 100 finished 13.83 points lower at 6743.94
4.41pm BST
Good news for Cyprus. The IMF has confirmed the country is on track with the conditions of its bailout programme and has released the latest 84m payment.
IMF Happiness descends on #Cyprus pic.twitter.com/2vDqaDfyar
4.06pm BST
On those Fitch forecasts... (see earlier), they've actually hiked their growth forecast for the UK this year to 3%, from 2.5% back in March.
3.59pm BST
On the upside, Greece is pulling in the holidaymakers, as this photo of tourists watching changing of the guard in front of the Greek parliament building shows:
3.52pm BST
Back to Athens.... and Greece has marked the end of its successful EU presidency by suggesting it will reinstate the wages of austerity-hit civil servants to pre-crisis levels.
That could send a few tremors through Brussels.
Government officials have signaled they will meet representatives from the police and armed forces tomorrow to begin talks on how both can be compensated for monies lost.
Economists reckon it could cost prime minister Antonis Samaras fragile coalition as much as 650m once again derailing the deficit and fiscal targets the government has already met under its stringent adjustment program. We can expect the outcry to grow when inspectors representing the debt-stricken countrys troika of creditors at the EU, ECB and IMF fly into Athens for their quarterly review of the economy later this week.
3.52pm BST
USD being sold off pretty much as across the board in what appears to be month-end related flow as we approach 4pm
3.47pm BST
Good news, holidaymakers - the pound just hit $1.7085 against the US dollar, it's highest level since October 2008.
3.41pm BST
Ratings agency Fitch has lowered its forecasts for global growth this year and next year, and warned that "risks are weighted to the downside".
In a new report, Fitch cut its projection for global GDP growth this year to 2.7%, down from 2.9% in March. It also trimmed its 2015 forecast to 3.1% from 3.2%.
Germany and Spain are expected to outpace France and Italy in the next quarters, in contrast to the previous core-periphery dichotomy. Recovery will become more balanced as domestic demand benefits from an easing in the pace of fiscal consolidation, improved confidence and normalisation of financial conditions. But high unemployment will persist and remain above 11% until 2016.
Nonetheless, deflation or very low inflation is a meaningful risk that could raise real interest rates and debt burdens, and add to the costs of periphery rebalancing.
3.06pm BST
Back to the US, and new housing data - just released - show that house sales have hit an eight month high.
The index of pending home sales (stripping out new properties) rose by over 6% month-on-month in May, to its highest level since last September.
BOOM. RT @BloombergTV: BREAKING: U.S. May pending home sales rise 6.1% from previous month
Pending home sales numbers are quite strong, but with the perspective that last month wasn't great, it makes more sense. #lumpy #phs #ehs
2.50pm BST
Greece's EU presidency ends
This six-month period was a six-month confirmation of the primary surplus that our country succeeded in achieving with everything that means for the completion of fiscal adjustment and the time-table of exiting the crisis,.
And that highlights a different Greece, a Greece of orderliness, of normalcy, a Greece that can direct the EU procedures at the level of the commission.
And the @gr2014eu is officially over. Signs props and billboards are down from the Eu council building pic.twitter.com/ZmFNooBHul
2.36pm BST
The Wall Street Journal has done a handy piece on the situation in Bulgaria.
Here's a flavour:
This is not a mainstream coverage area for most analysts. But among those who do look at the country, most are reasonably confident that this wont precipitate a crisis for the countrys central bank and its currency, which is pegged to the euro.
For us, this was the ultimate triumph of global investors buying simply on yield level and not fundamentals.
2.17pm BST
Back to Bulgaria - and Reuters flags up another sign of renewed confidence today.
A bond issued by its fourth-largest bank has rallied in value this morning, after the EC stepped in and approved the credit line sought by the Sofia government:
The dollar bond of Bulgaria's troubled Corporate Commercial Bank rallied by around 10 cents in the dollar on Monday after the European Commission sanctioned a credit line worth $2.3 billion for the country's banking sector.
The bond which matures Aug 8, fell almost 25 cents last week after a run on the bank, Bulgaria's fourth biggest, fuelled worries about repayment.
2.05pm BST
There's better news from Ireland, though. A border town that was once one of the UK's leading unemployment hotspots has received a massive boost with a financial technology firm creating 484 jobs.
The new posts will be in Newry which is close to the border with the Irish Republic and located partly in South Armagh - one of the most dangerous areas of Northern Ireland during the Troubles.
Newry based First Derivatives currently employs about 900 people, mostly in the town but also has offices in New York, Shanghai and Sydney.
Northern Ireland's First Minister Peter Robinson said the jobs would generate more than £22m a year to the local economy. Martin McGuinness, the deputy First Minister, said the new investment and jobs proved that the power sharing executive's industrial strategy was working.
1.52pm BST
Disappointing growth data from Canada..
The Canadian economy grew by just 0.1% in April, half as fast as expected. The mining, construction and utilities sector all reported falling growth.
Dud Canada GDP number ... 0.1% / 2.1% so a miss there.... mkt will be disappointed with that.
1.37pm BST
Correction, that last photo is a different bank branch in Sofia.
1.17pm BST
It's that bank again: No it's not
1.07pm BST
And here's a chart showing how the UK economy has probably broken through the '08 peak (assuming other data isn't also amended), via the FT's economics editor, Chris Giles.
If (and we don't yet know) post 2009 growth unrevised. UK economy has already passed its 2008 peak pic.twitter.com/Hg7xPkfU7v
12.49pm BST
Britain's economy appears to have finally burst through its pre-crisis peak to a new record level.
It's not completely official, yet, but new data from the Office for National Statistics show that the recession that hit Britain six years ago was not as deep as previously thought.
*cracks open Lidl champagne* RT @sarahoconnor_ UK economy now (very probably) bigger than its pre-crisis peak http://t.co/udjYErf3w2
The recession was still huge even if it has now gone from perhaps 10 to 9.9 on the Richter scale. That makes sense. To put it bluntly, the financial crisis was very bad....
The ONS now estimate the UK economy shrank 4.1% in 2009, compared to the previous estimate of a 5.2% fall. That still marks a truly disastrous period in UK economic history.
Output per hour is more than 15% below where it would have been had productivity continued growing at its average rate in the 40 years before the crisis.
Upward revisions to GDP, to the extent that they represent better measured output, could lower than puzzle. Todays changes cut a little under 1 percentage point from it. In other words, they are notable but do not change the big picture. There is still a huge productivity puzzle.
12.18pm BST
Just in - a photo from a branch of Bulgaria's First Investment Bank in Sofia this morning.
11.50am BST
After several grim years, there is a sign today that Greek retail sales may have turned the corner.
Elstat has reported that turnover across the Greek retail sector in April jumped by 8.6% compared with March, and was 3.9% higher than a year ago.
11.05am BST
The European Central Bank will probably be relieved that the eurozone inflation rate didn't dip even lower this month.
But as Howard Archer of IHS Global Insight, inflation in Germany did strengthen this month (to 1%), but was balanced by flat prices in Spain, and inflation of just 0.2% in Italy
Eurozone consumer price inflation has been stuck in a 0.5-0.7% range since February, having first dipped to 0.7% in October 2013.
This suggests that while Eurozone consumer price inflation remains markedly too low for the ECBs comfort, it has been stuck at a very low rate rather than headed towards deflation.
10.45am BST
Frederik Ducrozet of Credit Agricole predict that 'core' eurozone inflation will remain worryingly low this year, and in 2015:
10.19am BST
There's nothing in today's eurozone inflation data to force more action from the ECB on Thursday, reckons Jeremy Cook of World First:
Inflation data making the ECB meeting a decision on what to say in the press conference and little else
10.15am BST
Food, drink, and tobacco prices across the eurozone have actually fallen by 0.2% this month compared with June 2013.
That helped to pin the wider inflation rate down at a four-year low of just 0.5%.
Eurozone inflation rate in June remains at 0.5%. There are concerns about a persistently low inflation rate but ECB not expecting deflation.
10.07am BST
Eurozone inflation remained unchanged at 0.5% in June, according to the flash estimate from Eurostat, as food and drink prices keep falling.
It's the ninth month running that eurozone inflation has been below the target of just below 2%, as the area remains mired in a low-inflationary environment
June #Eurozone inflation remains stuck at 0.5%, although core inflation ticked up to 0.8% from 0.7% in May, acc. to Eurostat flash estimate.
10.01am BST
Back in the UK, the number of mortgages approved has dropped to an 11-month low.
Just 61,707 home loans were approved in May, suggesting that tougher mortgage approves tests and talk of higher interest rates may be cooling the market.
9.58am BST
Analysts at Nomura reckon that Bulgaria's currency board -- which pegs the lev in the foreign exchange markets - is probably not at risk, yet...
Nomura: "Overall we judge the risks to the currency board as low, but the consequences of it being called into doubt severe" #Bulgaria
9.53am BST
Most Important Data of the week coming up next - Eurozone flash core HICP inflation.
9.47am BST
Heads-up, we get the first estimate of eurozone inflation for June in 15 minutes. That will show whether the cost of living has crept up, having slipped to just 0.5% annually in May.
9.45am BST
With technical default looming, Argentina has taken its message straight to the readers of the FT and the Guardian.
It has placed full-page adverts in both papers today, insisting that it has paid the bond coupon due today - and lambasting the US courts for blocking it on Friday night.
Argentina: technical default "merely a sophisticated way of trying to bring us down to our knees before global usurers". How about that
9.03am BST
In the UK, people are digesting yesterday's warning from Bank of England deputy governor Sir Charlie Bean that interest rates could hit 5% within a decade.
Could you cope? Let us know in this poll.
Could you afford your mortgage if interest rates hit 5%? http://t.co/p04WatMtWw
8.58am BST
Shares in Bulgarian banks are soaring this morning, as confidence returns to the stock market.
First Investment Bank, which was hit by last week's bank run, jumped over 30% in early trading. Other shares posted double-digit gains.
8.34am BST
Reuters reports that queues are forming again outside bank branches in the Bulgarian capital, Sofia, this morning, despite president Plevneliev's call for calm.
But the lines are shorter than on Friday, their reporter Angel Krasimirov, reckons. And many people may not have heard about the EC credit line yet (only announced 90 minutes ago)
At one branch about 30 people were queuing, about half the number seen at midday on Friday.
Bulgaria's No. 3 bank says it has enough capital to meet customers' demand.
8.22am BST
This new £1.35bn credit line from the EC will give Bulgaria's banks an extra source of funding to tap; designed to reassure Bulgarians that their deposits are safe.
The announcement came hours after the country's president, Rosen Plevneliev, urged people to remain calm.
"There is no cause or reason to give way to panic. There is no banking crisis, there is a crisis of trust and there is a criminal attack,"
"These need to be overcome and those responsible prosecuted to the fullest extent of the law."
8.07am BST
The European Commission has offered Bulgaria's banking system its assistance, to prevent the country's banking system sliding deeper into trouble, after last week's bank runs.
It announced this morning that it has approved a request from Bulgaria to extend a credit line of 3.3 billion levs (or £1.35bn), to support its banks.
"The Commission concluded that the state aid implied by the provision of the credit line is proportionate and commensurate with the need to ensure sufficient liquidity in the banking system in the particular circumstances."
"well capitalised and has high levels of liquidity compared to its peers in other member states. For precautionary reasons, Bulgaria has taken this measure to further increase the liquidity and safeguard its financial system".
8.05am BST
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