Rolling coverage of the latest events across the world economy, the financial markets, the eurozone, Greece’s bailout, and businessLatest: Eurozone jobless rate hits 11.2%Eurozone inflation up to -0.3%Greece urged to start reform drive......as factories are hit from political uncertainty 11.13am GMT Helena adds that there was some tough talk from Yanis Varoufakis in his radio interview this morning:Varoufakis said the new government would rather dispense with the €7.2bn outstanding disbursement of aid (yet to be drawn down from its original bailout agreement) if that means continuing with self-defeating austerity. The days of doing everything for the next handout were over, he said. “If they ask me to continue with the work of austerity I won’t do it,” he said. 11.10am GMT #EU tells #Greece to start implementing reforms if it wants bailout cash. Right now, feels a bit head in sand. Deal struck, then inaction 11.05am GMT Over in Athens the Greek finance minister has waded into the row over whether the new government sent the “wrong letter “ to Jeroen Dijsselbloem during the bailout negotiations.That’s one claim made by Dijsselbloem, head of the eurogroup,in that interview with the FT this morning.In his own interview this morning with the Athenian radio station Parapolitika 90.1, Yanis Varoufakis said he was “trying very hard” to keep quiet about the assertion that Greece has fired off the wrong proposal to the euro group during the month-long negotiations to extend the country’s bailout programme. “I am making a huge effort not to respond to Dijsselbloem. We had our differences but at the last Eurogroup we found common ground. I am now going to go now into an analysis of the moves that happened before,” the Greek finance minister said. #Greece FinMin Varoufakis says Greek gov't will pass on €7.2bn tranche if it would mean continuation of austerity policies ~@parapolitika901#pt (So since we'll accept the tranche, it would mean that any measure we'll introduce will not be austerity) 10.58am GMT As this chart shows, eurozone inflation has been on a steadily downward path for the last three years: 10.45am GMT Better isn’t the same as good, of course. At 11.2%, Europe’s jobless rate highlights the damage caused by years of austerity since the financial crisis. And the inflation rates also show an economy struggling to create demand.With unemployment declining and deflation easing, the latest labor and price data for the Eurozone look less awful. Nonetheless, these data provide little reason to expect the ECB to change its approach toward the risk of trend deflation in the Eurozone. 10.41am GMT Ben Brettell, senior economist at Hargreaves Lansdown, says today’s data suggests Europe’s economy is picking up:Here’s his take on the fall in unemployment:Unemployment fell for the third month in a row to 11.2% in January – the lowest figure since April 2012. During the month, the number of people out of work fell by 140,000.....The credit cycle looks to be turning, and a weaker euro should benefit both exporters and domestically-focused firms.Falling energy costs should be of little concern to the ECB – they are essentially beyond its control, and in any case should prove positive for the euro zone economy as disposable incomes rise. Core CPI inflation, which excludes volatile items such as food and energy, remained steady at 0.6%. This is still a worryingly low level, but the fact it didn’t fall further is mildly encouraging. 10.35am GMT Unemployment rose by just three EU countries over the last year -- Cyprus (15.7% to 16.1%), Finland (8.4% to 8.8%) and France (10.1% to 10.2%). The largest decreases were registered in Spain (25.5% to 23.4%), Estonia (8.5% to 6.4% between December 2013 and December 2014), and Ireland (12.1% to 10.0%), Eurostat says. 10.26am GMT As usual, the jobless data highlights sharp differences across the Eurozone.The lowest unemployment rates for January were recorded in Germany (4.7%) and Austria (4.8%), and the highest in Greece (25.8% in November 2014) and Spain (23.4%). 10.22am GMT Eurozone unemployment rate starts to crumble down. 11.2% in Jan. At this pace, it will only take another 2 yrs before leaving double-digits.Eurozone HICP up to -0.3% YoY in Feb (from -0.6%) on higher oil and food prices. Looks set to remain negative in the near-term though.Inflation stats are a bit like #TheDress at the moment. Some see an oil price induced stimulus & others the start of debt deflation spiral. 10.11am GMT Europe’s labour market may be turning the corner.The eurozone’s unemployment rate fell to 11.2% in January, down from 11.3% in December. That’s its lowest rate since April 2012.Euro area unemployment rate at 11.2% and EU at 9.8% in January 2015 #Eurostat http://t.co/FIYzl8vL2A pic.twitter.com/QLwM9ZpnId 10.08am GMT Core inflation across the eurozone was unchanged in January at +0.6%#Eurozone inflation rises to -0.3% yoy in Feb from -0.6% in Jan, ahead of consensus expectations of -0.4%. Core stable at +0.6% yoy. #ECB 10.04am GMT The Eurozone’s annual inflation rate inched up to -0.3% last month, showing prices didn’t fall as fast as expected.That’s an improvement on the -0.6% decline in inflation recorded in January.Euro area annual inflation up to -0.3% in February 2015 - flash estimate from #Eurostat http://t.co/4S5qu0NtIj pic.twitter.com/c1dsimQNlh 9.41am GMT The UK factory revival is also being fuelled by domestic demand; overseas orders declined:UK #manufacturing growth being driven by domestic (especially consumer) demand. Exports fell in Feb. pic.twitter.com/d0EXslSJ9j 9.40am GMT Growth in Britain’s factory sector has hit a seven-month high, Markit reports.The UK manufacturing PMI rose to 54.1 in February, up from 53.1 in January, suggesting economic conditions picked up last month. “Scratching beneath the surface and we see a lop- sided upturn, with the prime driver being a strong upsurge in new orders and production at consumer goods producers while a near-stalling of demand for plant and machinery points to ongoing weak business investment. 9.37am GMT Good news for @matteorenzi - Italy unemployment rate dips slightly to 12.6% Youth jobless rate 41.2% http://t.co/zEuiC1pcXm 9.28am GMT Italy’s unemployment rate fell last month, away from the record highs hit last year, but remains worryingly high.The Italian jobless rate dropped to 12.6% in January, down from 12.7% in December. It struck 13.2% last autumn, as the country slipped back into recession.Italy youth unemployment rate was 43.3% in Q4 Men - 40.4% Women - 47.5% 9.21am GMT Greece’s manufacturing sector shrank last month, as the political turmoil around January’s general election hits its economy.Data firm Markit just reported that the Greek factory PMI came in at 48.4, up slightly from 48.3 in January, but still signalling a contraction in activity.“The headline manufacturing PMI remained in contraction territory in February in a further sign that Greece’s economy continues to struggle under the weight of uncertainty. Factories reported hesitancy among clients at home and abroad to commit to new orders, leading new business inflows to fall at an accelerated rate” 9.12am GMT The eurozone’s manufacturing sector only posted a little growth in February, according to Markit’s monthly healthcheck.But that hides some remarkable national differences. While Ireland posted its biggest jump in activity since 1999 [see here], French factories suffered yet another contraction.“The euro zone manufacturing sector barely expanded in February, highlighting the malaise that still hangs over the region’s goods-producing economy as a whole.” “However, beneath the disappointing headline figure, different parts of the manufacturing economy are clearly moving at very different speeds, ranging from an (Irish) boom to a (French) slump.”EZ mfg #PMI: "Different parts of the mfg economy are clearly moving at very different speeds, ranging from a Celtic boom to a Gallic slump."Euro-area manufacturing #PMI takes a break in February. Italy is catching up with peers, leaving France far behind. pic.twitter.com/MUoIu6zBkD 8.55am GMT Once again Germany has outperformed France.Germany Manufacturing PMI (Feb) comes in at 51.1, exp 50.9, prev: 50.9 8.55am GMT Eugh. France’s factory output shrank at a faster pace in February.Markit reports that the French manufacturing PMI fell to 47.6 last month from 49.2 in January; deeper into contraction territory.French mfg was the 10th straight month of contraction - Ou la la#France manufacturing #PMI signals further contraction: Headline #PMI at 47.6 (49.2 in Jan) http://t.co/pVNOQKzzEK http://t.co/v9CrJv0RbW 8.53am GMT Good news from Italy -- its factory sector has grown for the first time in five months.The Italian manufacturing PMI jumped to 51.9, up from 49.9. 8.49am GMT Europe’s two largest stock markets have nudged fresh record highs this morning.In London, the FTSE 100 has just hit a fresh intraday high of 6970, as investors anticipate the launch of the European Central Bank’s new quantitative easing programme this month.Let the QE begin: #Germany's Dax just hits fresh highs as #ECB's QE pushes savings into other assets, such as stocks. pic.twitter.com/XERHwSRP8Z 8.41am GMT Spain’s factory sector has posted its fifteenth month of growth.The monthly Spanish manufacturing PMI, measured by Markit, came in at 54.2; slightly down on January’s 54.7, but still showing a rise in activity. 8.36am GMT Britain’s housing market appears to be cooling. Prices fell by 0.1% in February, dragging down the annual rate of price inflation to 5.7%, from 6.8% in January.This slowdown means that the average price of a UK home has fallen back to £187,964, from the recent peak of £189,306 it reached in August.Nationwide house prices fell 0.1% February, annual rate from 6.8% to 5.7%. Notes home-ownership drop to 30-year low: http://t.co/UhtNL3O4ZN 8.29am GMT Jeroen Dojsselbloem, who led the talks with Greece over its bailout plan last month, has dangled a carrot towards Athens -- crack on with reforms, and we may release some funds this months.“My message to the Greeks is: try to start the programme even before the whole renegotiation is finished.” “There are elements that you can start doing today. If you do that, then somewhere in March, maybe there can be a first disbursement. But that would require progress and not just intentions.” 8.15am GMT Greece’s prime minister has caused a diplomatic spat over the weekend by claiming that Spain and Portugal had led “an axis of powers” against the new Athens government.Alexis Tsipras told an audience that Madrid and Lisbon were afraid of their own radical parties [eg: Spain’s Podemos], declaring:Their plan was, and is, to wear down, topple or bring our government to unconditional surrender before our work begins to bear fruit and before the Greek example affects other countries… And mainly before the elections in Spain.”“We are not responsible for the frustration generated by the radical Greek left that promised the Greeks something it couldn’t deliver on,” he said. 8.10am GMT Ireland’s recovery from its bailout woes continues; its manufacturing sector posted its biggest jump in monthly activity since December 1999.Ireland manufacturing PMI 57.5 vs 55.1 - highest this century, says Markit. http://t.co/FdsDvPCVi7 8.04am GMT Activity across China’s factory sector nudged to a seven-month high last month, data released earlier today shows.But it’s not all good news; today’s PMI survey also shows that export orders fell for the first time in 10 months. Firms also continued to cut staff, suggesting China is suffering from weaker demand from overseas. 7.50am GMT Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.There’s a sense that Europe is returning to normality this week (at least for a moment), after the recent drama over Greece’s bailout extension.UK economy today: Nationwide house prices 7am, #BOE credit stats, Feb. manufacturing PMI 09:30. @business PMI forecast 53.3 vs 53Now Greek govt officials hint at new elections if Syriza leftwing opposition blocks a deal with the Institutions. Oh well...A new general election to get the same mandate you got some weeks ago. And end up with the same intra-party opposition. Only in Greece. Continue reading...
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