All the latest economic and financial news, including Greece’s debt negotiations and a new healthcheck on the eurozone private sectorGreece is sending €200m payment to IMF.Introduction: Greece blames creditors for deadlockBild: New wealth tax for wealthy familiesBond selloff continuesUK borrowing costs jump 11.32am BST The thinktank, National Institute of Economic and Social Research (NIESR) has released its latest forecasts for the UK and world economies today, and it is a mixed bag of news for the eurozone. NIESR sees brighter prospects for the region as a whole, but big question marks over Greece’s chances of staying in the the single currency bloc and what an exit might mean for its neighbours.“Prospects in the Euro Area have improved; the ECB’s monetary policy, the euro’s depreciation, and lower oil prices are all expected to support demand and activity in the period ahead, while fiscal policies are expected to be broadly neutral, and the risks of deflation have lessened.“Nevertheless, economic conditions remain very weak in much of the area, with unemployment extremely high and expected to decline only slowly.“When you look at data from the Bank of International Settlements it is clear that the exposure of most European banking systems is significantly less than it was in 2011, the start of 2012. Dramatically less, in particular for France and Portugal... However, just because the banking sectors of these countries are significantly less exposed... it doesn’t necessarily mean that there is no contagion effect there. Much of this is very opaque, it relies to a large extent on the sentiment of investors in a number of countries and if the view is taken of those countries that are still by and large classified as peripheral Europe, or crisis economies, or whatever phrase you want to use, there clearly is a risk that there will be a negative spillover to these economies. Now, it’s significantly less than is was at the end of 2011, in 2012, but the risk is there. So the question then becomes: ‘Why go down the path that actually pushes us into the position where we actually give this risk a chance of materialising?’”“The IMF have said very explicitly ... Greece’s debt burden is unsustainable ... so it has to be written off. Now you can write it off... by extending maturities and pretending you are not really writing it down because you are not changing the face value but we all know what’s really happening in economic terms.”“Even the Commission’s optimistic forecast which was published today [Tuesday, as covered in the live blog here] still shows Greece with a debt burden of about 180% next year. The IMF’s message here is, I think, long overdue... Essentially European policymakers ... either want to force Greece out of the euro and take the risk, which, as Simon says, we really cannot quantify very sensibly .... or they are going to have to recognise economic reality, if they want Greece to stay in the euro, an economic reality that is saying significant write-off in some form or other [will be needed].” 11.05am BST Investors still believe there is a high risk that Greece will default on its debts within the next five years:Greek 5yr default probability continues to rise as the blame game between #Greece and it's creditors is in full swing pic.twitter.com/I2O316HntO 10.57am BST Associated Press has also confirmed that Greece is making its €200m repayment to the IMF today (as flagged up early this morning).Next week’s bill will be harder, though.Greece is making a 200 million euro ($222 million) repayment to the International Monetary Fund, though another, larger one looms next week that it will struggle to manage.A Greek finance ministry official said Wednesday: “The payment is proceeding normally.” The official spoke only on condition of anonymity in line with government regulations. 10.46am BST Here’s Angela Monaghan on the jump in UK service sector growth last month: Related: UK services PMI hits eight-month high 10.41am BST Back in the City, shares in Sainsbury’s have slid by 3% to the bottom of the FTSE 100 leaderboard, after it posted its first loss in a decade. Related: Sainsbury's makes £72m full-year loss on property writedowns 10.27am BST Here’s that story about new possible taxes on Greek super-rich that we mentioned earlier....@BILD reports Greek gov't plans to levy special tax against 500 richest Greek families: http://t.co/6hJCq6SCkX pic.twitter.com/c9lruVPF2z 10.24am BST Greece’s unemployment rate has fallen, but still remains alarmingly high.The seasonally adjusted unemployment rate in February 2015 fell to 25.4%, down from 25.6% in January, according to Elstat. A year ago it was 27.2%. 10.05am BST Back to Greece, and a new poll has shown that a majority of German executives now believe the eurozone would be better off without Greece.Mike Bird of Business Insider has the story:According to Germany’s premier business newspaper, Handelsblatt, 44% of the 673 executive-level German managers surveyed think that Greece should leave the eurozone of its own accord.A further 13% think Greece should be actively ejected from the monetary union.Handelsblatt poll shows a majority of German executives now want Grexit - 79% see no contagion/domino effect http://t.co/tmNliA6lr5 9.51am BST Fears that Britain’s recovery is faltering have been allayed by the latest survey of UK services firms.“The services sector offered a more upbeat level of performance than the other sectors this month and demonstrated a continued assurance in the growth of the UK economy. New business was the primary driver of activity, even amidst increased competition, more marketing activity, the scrabble for good staff and the availability of raw materials.”Big jump in UK services PMI, a strong indicator for UK GDP, when other data pointed to faster slowdown. A Tory boost 24hrs before #GE2015Waiting for Dave to explain PMIs to the wider electorate. #anythingabove50 9.28am BST European stock markets have bounced back from yesterday’s selloff. Until now, there may have been a degree of willingness to look beyond the bigger political issues – both in terms of the UK election and what’s happening with regard to the Greek debt talks – but it’s easy to see how this could mark the start of several downbeat sessions as the market attempts to predict how matters will evolve between now and the start of next week. 9.19am BST The news that Greece is meeting its €200m repayment to the IMF is welcome, but it’s only a small hillock in the mountain of debt repayments that Athens faces this summer: Reuters is reporting that #Greece has met its €200mn payment to the #IMF, due today. But plenty of payments to go. pic.twitter.com/nhvKebvndw 9.09am BST This morning’s flurry of data shows that eurozone businesses reported pretty solid growth in April as the region’s recovery continues.Strong growth in Spain, and a pick-up in Italy, made up for France’s ongoing weakness, according to data provider Markit.“The survey is signalling a rate of economic growth of approximately 0.4% at the start of the second quarter, similar to that indicated by the PMI in the first quarter.“The fact that the rate of growth failed to gain further momentum is a disappointment, but the national growth variations will give policymakers some real encouragement that the economic health of the region is improving.” 8.59am BST Growth across Germany’s service sector also slowed... with its PMI coming in at 54.0, down from 55.4 in March. That’s also weaker than the ‘flash estimate’ of 54.4 published two weeks ago; suggesting growth slowed in late April.*GERMANY APRIL SERVICES PMI FALLS TO 54; PRELIM. 54.4 8.57am BST Disappointing news from France, though - growth across its private sector has slowed.The French service sector PMI fell to 51.4 last month, from 52.4 in March. And with its manufacturing shrinking, the overall French Composite PMI fell back to 50.6.*GERMANY APRIL SERVICES PMI FALLS TO 54; PRELIM. 54.4 8.49am BST More good news for the eurozone -- Italy’s service sector has reported its fastest growth in 10 months.The Italian service sector PMI jumped to 53.1 last month, up from 51.6 -- on a scale where any reading over 50 shows growth.#Italy's service sector grows at fastest rate for 10 months. Headline Index at 53.1 (Mar:51.6) http://t.co/7YRmf0QBlP http://t.co/5whZgbyShe 8.36am BST Back in the bond markets, Britain’s headline borrowing costs have hit their highest level of 2015.#UK 10-year bond yield climbs above 2%; first time since December pic.twitter.com/gkhI1cDdcS /via @moved_average 8.35am BST Here comes the first Purchasing Managers Index report from the eurozone....and it’s good news for Spain.The Spanish service sector PMI has surged to 60.3 last month, up from 57.3 in March, a really strong reading that shows growth is accelerating. Olé! 8.29am BST A major readjustment appears to be underway in the bond market.Prices of eurozone sovereign debt are falling this morning, pushing up yields, continuing a trend that began late last month:Sell-off in #Eurozone bonds continue. 10yr govt bond yields of Italy and Spain spike, make fresh 2015 highs. pic.twitter.com/EU2giLaXpyGlobal bond markets have lost about $340 billion since the start of last week 8.22am BST Curious.....Germany’s Bild newspaper claims that Athens is planning a special tax on the country’s 500 richest families.good morning! new status symbol? "#Greece's 500 richest families may face special levy: newspaper" https://t.co/v3OJ8IFQSC via @sharethis 8.07am BST One down, lots more to go....That's one less - Greece Has Made EU200m IMF Repayment, CNBC Says, Citing Reuters. 7.57am BST A Greek official has confirmed to Reuters that the €200m interest payment is winging its way to the International Monetary Fund.“It’s done, the money is on its way,” the official said, on condition of anonymity.Cash-strapped Athens is quickly running out of money while it tries to persuade euro zone partners and the IMF to extend further aid. The payment on Wednesday was not expected to be a problem for the country, but a €750m payment to the IMF that falls due on May 12 is expected to be a bigger struggle. 7.50am BST Newsflash from Athens: Greek officials have just announced that they’ve met the €200m repayment to the IMF due today - lifting the immediate threat of a default.Via Reuters:#Greece makes €200ml repayment to #IMF ~Greek official /via @EM_Equity#Greece | MAKES €200M REPAYMENT TO IMF-GR OFFICIAL..IMF gives Greece money so that Greece can pay IMF so that IMF can give Greece more money 7.46am BST Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.With relations with its lenders deteriorating, Greece must pull together €200m to meet an repayment to the International Monetary Fund today.“They are not only implacable, the feeling that they give us is that they are impossible to satisfy.” “They ask for 10 things to be done and then come back the next day and ask for another 10 more. As much as we would like, that’s not going to lead to compromise.” Related: Greek government takes aim at creditors over stalled bailout talks Another #ECB Day for #Greece. Central Bank's Gov Council to review ELA to Greek banks. Market expects new small increase & no haircut. Yet.Sainsbury's falls to first statutory loss in a decade - £72m after property write offsSainsburys boss Mike Coupe: "The UK marketplace is changing faster than at any time in the past 30 years which has impacted our profits" Continue reading...
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