11.03am BST
Shareholders are gathering in London for Burberry' annual general meeting, due to kick off shortly. The FTSE100 company has raised shareholders' ire with the £20m pay package for chief executive Christopher Bailey.
As the Guardian revealed in May, Bailey has been handed a golden hello in shares worth up to £7.6m and an annual pay package worth up to £8.1m a year, including a £440,000 cash allowance to cover clothing and other items.
Are Burberry shareholders better dressed? Will Anna Wintour be in the front row? #burberryagm
10.45am BST
Italian bond yields, a crucial measure of investor confidence in a country, have fallen to record lows.
The Italian treasury has sold 7.5bn of bonds, the top of its target range, after selling 3-yr, 7-yr and 15-yr bonds.
Italy is not Portugal. Yields at Italian 3-yr and 15-yr bond auctions today fall to a euro lifetime low.
@ReutersJamie because Italian banks are better...
How do you borrow 1.15 BILLION with 17.6 MILLION of guarantees? Own the bank you borrow from. That's what Espírito Santo companies did.
10.35am BST
Economists were surprised by official data showing a 1.1% fall in construction output in May. Here is a round-up of reactions I have seen so far
Howard Archer at IHS Global Insight, thinks the outlook for construction remains encouraging, although today's "disappointing" result will weigh on second quarter GDP figures.
While Mays construction output data are very disappointing and there has clearly been a recent loss of momentum in the sector, there is hope for the future as latest survey evidence is very healthy overall. Specifically, the purchasing managers survey indicates that construction output rose at the fastest rate for four months in June and for a 14th consecutive month...
What is particularly encouraging is that the purchasing managers survey indicates that the strength in activity is widespread across sectors. Housebuilding activity is leading the way with activity picking up markedly in June to almost match Januarys 10-year high. Meanwhile, commercial activity was at its second highest level (after January) since August 2007. Commercial activity is also relatively elevated despite easing back to a nine-month low in June; this was reported to be partly due to the ending of some work related to repairing Februarys flood damage..
The prospects still look largely decent across most sectors. Extended improved economic activity and increased business confidence should underpin commercial construction activity and civil engineering.
The construction industry moved into reverse in May, according to official data. The weakness of these data alongside disappointing manufacturing output data for May suggest that policymakers will be encouraged to err on the side of caution about hiking interest rates too early in what looks to be a still-fragile recovery...
Even with this disappointing construction number, the official data available so far and the PMI surveys indicate that the UK economy enjoyed another robust economic expansion in the second quarter, at least matching the 0.8% growth seen in the first quarter. Once the volatility in the official data is accounted for, theres also little sign of momentum waning as we move into the second half of the year.
9.59am BST
The Bank of England has warned British banks that they may need to set aside more capital under new global rules to prevent a rerun of the financial crisis.
In a consultation paper launched today the Bank said lenders may need to set aside additional funds on top of the 3% of capital currently required.
"There may be a case to introduce a supplementary leverage ratio component to a subset of firms (e.g. ring-fenced banks and/or systemically important institutions) whose failure would be most destabilising for the financial system," the BoE said in a consultation paper.
Such a supplement would effectively cover the bulk of Britain's banks. British lawmakers want a leverage ratio of 4 % or above, higher than the proposed global rule for 3 %, saying tougher measures are needed to ensure taxpayers are not asked to bail out banks as they were in the financial crisis.British banks have been required to meet the 3 % target by Jan. 1, 2014, forcing some to raise more capital.
9.46am BST
Building sites were less busy in May, raising concerns that this important sector of the UK economy, which has helped drive forward the recovery, is stalling.
The ONS reported a 1.1% fall in May on the previous month, driven mainly by a fall in private commercial work down 3.6%, and repair & maintenance, down 1.1%.
The recent increase in housing construction output is likely to reflect recent changes in house prices, which have given developers an incentive to supply more new homes.
9.34am BST
Another May miss - UK Construction Output declines 1.1% exp: 0.9% gain #gbp
Construction output in the UK pretty weak -1.1% v +0.9% expected m/m
9.33am BST
Breaking news: UK construction output fell 1.1% in May compared to the previous month, the biggest fall since February according to data just released by the Office for National Statistics.
Output was up 3.5% in May 2014 on the previous year.
9.26am BST
A few recent headlines, courtesy of Zerohedge, which has compiled a handy list of upbeat statements from European leaders about Portugal.
Here is a flavour:
9.22am BST
Is the Eurozone crisis back?
We are far away from panic levels of 2011-12, when markets pushed southern European bonds to eye-watering levels and governments wobbled. But yesterday's panic sell-off is an unpleasant reminder for European leaders about how much work needs to do to repair the financial system.
It shows what a crazy financial system we have created when one small financial institution can cause such shockwaves around the world. It also demonstrates that European politicians who so famously said that they would break the link between banks and sovereigns have singularly failed to do so.
That is not a surprise because under our current financial system it is impossible to break that link. What we need is not minor tinkering with the regulations but a complete overhaul of the banking system.
The good: This is not the eurozone financial crisis flaring up again. Just a cursory glance at the government bond yields of Spain and Italy - the most accurate gauge of sentiment towards the bloc's periphery - shows that today's events are a world apart from the panic that engulfed Europe's single currency area in 2011 and 2012. Even after a 40 basis point rise this week, Portugal's 5-year bond yield is still just a tad higher than its US equivalent. Spanish and Italian 10-year yields remain under 3% and are only slightly above their UK equivalent...
The bad: It's not Espírito Santo that's the problem. It's the bleak fundamentals of the eurozone periphery which have become worryingly detached from the region's buoyant financial markets. The rally in peripheral debt has looked overdone for quite some time. The tug-of-war between central bank largesse and economic, financial and political vulnerabilities in the eurozone has been dominated by the latter, fuelling an increasingly indiscriminate "grab for yield". The question is whether Espírito Santo jolts investors out of their complacency about the risks in the eurozone.
8.54am BST
Vince Cable has taken to the airwaves this morning to defend the government's handling of the sale of Royal Mail, after a committee of MPs concluded that the taxpayer had lost out on £1bn.
Speaking on BBC Radio 4 Today's programme the business secretary said the committee had the benefit of hindsight.
We sold at a price that was regarded as the best that could be achieved in the context in which we sold it.
The point we have stressed, and I've stressed over and again, that the price of shares is very, very volatile - these things go up and down and we've seen in the last few weeks the price of Royal Mail shares actually falling like a stone.
It's not uncommon but that doesn't mean to say that it's right.
It's very important that the Government, above all, when it does sell off a public asset does so through a process which quite clearly demonstrates that nobody advising has a conflict of interest.
8.34am BST
The Portuguese bank at the centre of the sell-off storm has issued a statement saying that it has enough capital to meet its regulatory requirements.
Issued late last night after its shares were suspended from Portugal's stock exchange, Banco Espirito Santo said it had 2.1bn over and above regulatory requirements on 31 March.
BES Executive Committee believes that the potential losses resulting from the exposure to Espírito Santo Group do not compromise the compliance with the regulatory capital requirements.
8.18am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and the business world.
European markets have rallied after Thursday's sell-off, but investors are likely to remain wary amid renewed fears about the eurozone economy.
None of the underlying problems that served to create the [eurozone] crisis have been dealt with, namely the sovereign debt feedback loop between banks and the governments they fund.
The crisis in Portugal is a direct consequence of this failure, along with an almost shocking complacency on the part of investors who have driven bond yields in countries like Greece, Portugal, Spain and Italy to, in some cases, record lows.
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