Rolling business and financial news, including Bank of England governor Mark Carney on the Today Programme and Greece’s negotiations with creditorsLatest: Carney dampens down impact of foreign workersGreek negotiations continue todayThe Agenda: Mark Carney and Mario Draghi speaking Carney’s migration comments make headlines 8.34am BST Mark Carney also cautions against assuming that the UK economy recovery will be smooth and simple.We face a weak global economy, the impact of fiscal consolidation [George Osborne’s deficit reduction plans], and the challenge of completing the repair of the financial system. 8.33am BST The next interest move will probably be up, Carney adds, and it’s “possible” that rates will be higher in a year’s time. 8.30am BST Onto general economic issue, and Carney says that interest rates will rise in a gradual manner, when the time comes.... 8.30am BST Is the Bank of England worried that a referendum on Britain’s membership of the EU will cause uncertainty and hit business confidence?It’s in the interests of everybody that there is clarity about the process and the question and the decision, governor Carney replies.Mark Carney wants an EU referendum "as soon as necessary". Presumably some sort of Canadian idiom. #r4today 8.26am BST As businesses run out of labour, productivity should go up, says Carney.But you’ve been predicting a rise in productivity for years... 8.20am BST But there are 4.8m foreign workers in the economy, isn’t that pushing down wages and productivity, asks Humphrys.Mark Carney explains that foreign workers usually enter the labour market in jobs which are below their skill set. Over time, they rise up through the workforce, take on more high-skilled jobs and contribute to rising productivity. 8.16am BST Humphrys asks if foreign workers are to blame for Britain’s poor productivity growth.“I’d really dampen that down”, Mark Carney replies.The real story is that British people want to work more. 8.13am BST John Humphrys asks if it’s true that households would be £5000 per year, after tax, if productivity had grown at the pre-crisis rate.Wages would be higher in the “high teens”, Carney agrees. 8.12am BST Governor Carney is on the Today Programme now....It is the key determinant for wages and living standards in the UK. 8.10am BST @bankofengland Gov Carney on R4 shortly. http://t.co/e4F1F6Dvu3 inflation, interest rates and productivity. Will they ask about DOJ + fx? 8.03am BST You can listen to the Mark Carney interview live, here. 8.02am BST Mark Carney is likely to be quizzed about migration when he is interviewed on the Today programme in a few minutes.Yesterday’s Bank of England Inflation Report identified net migration as one factor that has pushed down wage growth; the comment made the front page of the Daily Mail:Thursday's Daily Mail front page - Bank chief: foreign workers drag down UK wages #tomorrowspaperstoday #bbcpapers pic.twitter.com/Z3XbOhbhJOIn recent years labour supply has expanded significantly owing to higher participation rates among older workers, a greater willingness to work longer hours and strong population growth, partly driven by higher net migration. These positive labour supply shocks have contained wage growth in the face of robust employment growth.Wages have grown by around 2% in the past year – less than half the average rate before the global financial crisis – and a key risk is that these subdued growth rates continue. 7.56am BST Last night’s Greek cabinet meeting focused on changes to the tax system, and possible privatisations, ahead of today’s talks with creditors today.The Kathimerini newspaper adds:Officials also discussed the possible timing for drafting some of these changes into legislation in a bid to show good will and convince the European Central Bank to relax liquidity restrictions on Greece. 7.53am BST Greece’s government has instructed its negotiating team to speed up the talks with its lenders, in an attempt to bridge the gaps before it runs out of funds.Greece’s negotiating team will continue talks with the country’s international creditors to reach a cash-for-reforms deal, a government official said after a cabinet meeting chaired by Prime Minister Alexis Tsipras.“The cabinet authorised the negotiating team at the Brussels Group to continue talks starting on Thursday, aiming at a mutually beneficial agreement,” the official said. Greek govt authorised team in Brussels Group to achieve 'mutually beneficial agreement'. That's it #Greece #Eurogroup 7.47am BST Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. Related: Bank of England lowers forecasts for UK #IMF's Lagarde & #ECB's Draghi to meet in Washington today + IMF Executive Board to be briefed on #Greece by Europe Dept head Poul Thomsen .“The bond market moves are making investors quite anxious. I think everyone expected yields to rise once we started to see a bounce in oil prices as, naturally, this would change people’s inflation outlook...“The pace at which they’ve risen has been quite surprising, which is probably a consequence of a lack of liquidity in the market at the moment. A small change in attitude can have a much greater impact.” Continue reading...
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