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| UK growth slows to 0.4%; Greek debt crisis flares up – as it happened | |
| (about 1 hour later) | |
| 6.01pm BST | |
| 18:01 | |
| European shares close higher | |
| Another rise in the oil price helped lift stock markets, even though crude came off its best levels following a bigger than expected rise in US inventories. | |
| UK GDP was in line with forecasts, while there was a positive reaction to a number of company results including Barclays and GlaxoSmithKline. Apple’s disappointing figures however left technology shares flagging, and investors remained cautious ahead of the latest rate setting meetings from the US Federal Reserve and the Bank of Japan. The final scores showed: | |
| On Wall Street, the Dow Jones Industrial Average is up 22 points or 0.13% ahead of the Fed. | |
| Meanwhile Brent crude is currently up 1.16% at $46.27 a barrel having earlier climbed as high as $47.05. | |
| On that note, it’s time to close for the evening. Thanks for all your comments, and we’ll be back tomorrow. | |
| 5.57pm BST | |
| 17:57 | |
| Citi has come up with forecasts for interest rates in the UK, eurozone and Japan: | |
| Citi expects deeper neg rates for Eurozone & Japan. Sees ECB to cut depo rate to -0.5%, BOJ to cut pol rate to -0.5% pic.twitter.com/bBnEfMxW51 | |
| 5.53pm BST | |
| 17:53 | |
| Here’s Reuters latest story on the situation between Greece and its creditors: | |
| Greece accused the International Monetary Fund on Wednesday of undermining negotiations over the release of more bailout funds needed in the next few weeks to repay debt. | |
| At issue is what measures Athens would take if it fails to reach fiscal targets by 2018. Creditors, including the IMF and European institutions, want those measures made law immediately. | |
| Athens argues that its constitution precludes legislation on a hypothetical event but it has offered to discuss a mechanism of automatic cutbacks. | |
| Government spokeswoman Olga Gerovasili told reporters that the IMF had not accepted the proposal. | |
| “The IMF is making demands which go beyond what was agreed,” Gerovasili said, referring to a 86-billion-euro ($97-billion) deal struck last year and talks to unlock more than five billion euros in bailout funds needed to pay EU and IMF debts by July. | |
| “These demands undermine efforts by both the Greek government and European institutions,” she said. | |
| An IMF spokesman in Washington said the institution had no immediate comment on the matter. | |
| 4.47pm BST | 4.47pm BST |
| 16:47 | 16:47 |
| More on Greece: | More on Greece: |
| Tsipras & @eucopresident to speak again Thurs after today's call, says Greek PM's office. Tsipras wants EZ summit if no €group in next days | Tsipras & @eucopresident to speak again Thurs after today's call, says Greek PM's office. Tsipras wants EZ summit if no €group in next days |
| 4.39pm BST | 4.39pm BST |
| 16:39 | 16:39 |
| The interview closes with Draghi saying it will be his pleasure to go to the Bundestag. | The interview closes with Draghi saying it will be his pleasure to go to the Bundestag. |
| 4.37pm BST | 4.37pm BST |
| 16:37 | 16:37 |
| On the prospect of Britain leaving the European Union, Draghi says: | On the prospect of Britain leaving the European Union, Draghi says: |
| I cannot and do not wish to believe that the British would vote to leave, because we are stronger together. But if they do, it should be clear: they would lose the benefits of the single market. | I cannot and do not wish to believe that the British would vote to leave, because we are stronger together. But if they do, it should be clear: they would lose the benefits of the single market. |
| 4.33pm BST | 4.33pm BST |
| 16:33 | 16:33 |
| Draghi was also asked about Greece: | Draghi was also asked about Greece: |
| BILD: Mr Draghi, in your first interview with BILD four years ago, we spoke a lot about Greece. The country has still not got back on its feet, even though it has received hundreds of billions in emergency loans. When will the madness end? | BILD: Mr Draghi, in your first interview with BILD four years ago, we spoke a lot about Greece. The country has still not got back on its feet, even though it has received hundreds of billions in emergency loans. When will the madness end? |
| Draghi: Clearly, last year was an economic setback for Greece. Now everyone is aware that there can be no growth without reforms. And what the country and its citizen need above all is growth. Greece has implemented many reforms in the past months and is committed to the path of reforms. | Draghi: Clearly, last year was an economic setback for Greece. Now everyone is aware that there can be no growth without reforms. And what the country and its citizen need above all is growth. Greece has implemented many reforms in the past months and is committed to the path of reforms. |
| BILD: Is the euro a part of the solution for Greece, or a part of the problem? | BILD: Is the euro a part of the solution for Greece, or a part of the problem? |
| Draghi: Greece’s challenges have little to do with the euro. It would have to implement reforms in any case. In the Eurozone, Greece can do that with the support of its partners. But one thing must be clear: who belongs in the euro area and who does not is not for the ECB to decide. That is a matter for the Member States. | Draghi: Greece’s challenges have little to do with the euro. It would have to implement reforms in any case. In the Eurozone, Greece can do that with the support of its partners. But one thing must be clear: who belongs in the euro area and who does not is not for the ECB to decide. That is a matter for the Member States. |
| BILD: They are now more fractious than ever. Is that the biggest danger for Europe? | BILD: They are now more fractious than ever. Is that the biggest danger for Europe? |
| Draghi: We are experiencing several crises which are all interconnected and reinforce each other. That makes it all the more important to resist every kind of nationalism or isolationism. Both are however on the rise. That worries me a lot. | Draghi: We are experiencing several crises which are all interconnected and reinforce each other. That makes it all the more important to resist every kind of nationalism or isolationism. Both are however on the rise. That worries me a lot. |
| 4.31pm BST | 4.31pm BST |
| 16:31 | 16:31 |
| Ahead of a visit to the German parliament, ECB president Mario Draghi has given an interview to Bild newspaper. | Ahead of a visit to the German parliament, ECB president Mario Draghi has given an interview to Bild newspaper. |
| Draghi has been criticised in Germany for the ECB’s low interest rate policy, which has affected the country’s savers, and has also been attacked by German finance minister Wolfgang Schäuble. | Draghi has been criticised in Germany for the ECB’s low interest rate policy, which has affected the country’s savers, and has also been attacked by German finance minister Wolfgang Schäuble. |
| In the interview - which has been repeated in English by Business Insider - he has come out fighting” | In the interview - which has been repeated in English by Business Insider - he has come out fighting” |
| Draghi: We are well aware of the situation for savers. And it’s not only in Germany that people have to face low interest rates. But interest rates are low because growth is low and inflation is too low. Think about the alternative: if we raised rates now, it would be bad for the economy and we would unleash deflation, unemployment and recession. The interest on savings comes from growth, so the interest of savers is that inflation stabilises and growth becomes more robust. Besides, many savers benefit from low interest rates as they are also homebuyers, taxpayers, entrepreneurs and workers whose companies are benefiting. | Draghi: We are well aware of the situation for savers. And it’s not only in Germany that people have to face low interest rates. But interest rates are low because growth is low and inflation is too low. Think about the alternative: if we raised rates now, it would be bad for the economy and we would unleash deflation, unemployment and recession. The interest on savings comes from growth, so the interest of savers is that inflation stabilises and growth becomes more robust. Besides, many savers benefit from low interest rates as they are also homebuyers, taxpayers, entrepreneurs and workers whose companies are benefiting. |
| BILD: In Germany the adverse effects are predominant. Making provision for retirement is becoming increasingly difficult… | BILD: In Germany the adverse effects are predominant. Making provision for retirement is becoming increasingly difficult… |
| Draghi: Remember, what counts is what you earn on savings in real terms, i.e. interest minus inflation. This is higher today than it was in the 1990s. At that time you might have had a higher interest rate on your Sparbuch, but we often had an inflation rate that was higher still. So you could buy less with the money you received. Moreover, people can influence how much they get on their savings even in times of low interest rates. They don’t just have to keep the money in savings accounts but can invest in other ways. The Bundesbank has recently shown that the average return on all German household assets is close to 2%. | Draghi: Remember, what counts is what you earn on savings in real terms, i.e. interest minus inflation. This is higher today than it was in the 1990s. At that time you might have had a higher interest rate on your Sparbuch, but we often had an inflation rate that was higher still. So you could buy less with the money you received. Moreover, people can influence how much they get on their savings even in times of low interest rates. They don’t just have to keep the money in savings accounts but can invest in other ways. The Bundesbank has recently shown that the average return on all German household assets is close to 2%. |
| BILD: So, are the German savers themselves to blame? | BILD: So, are the German savers themselves to blame? |
| Draghi: No. But there are alternatives in investing savings. In the United States savers had to face seven years of zero interest rates. Banks, insurers, the financial system nevertheless still worked. Money was invested in a variety of ways which in the end enabled a decent return. | Draghi: No. But there are alternatives in investing savings. In the United States savers had to face seven years of zero interest rates. Banks, insurers, the financial system nevertheless still worked. Money was invested in a variety of ways which in the end enabled a decent return. |
| He also said he did not take the criticism from the likes of Schäuble personally but added: | He also said he did not take the criticism from the likes of Schäuble personally but added: |
| One thing is clear: the ECB obeys the law, not the politicians. Or, as one of my predecessors put it, it is normal for politicians to comment on our actions. But it would be abnormal if we listened to them. | One thing is clear: the ECB obeys the law, not the politicians. Or, as one of my predecessors put it, it is normal for politicians to comment on our actions. But it would be abnormal if we listened to them. |
| And he defended the ECB policies, saying they were working: | And he defended the ECB policies, saying they were working: |
| But we must be patient; investor confidence has not yet been fully restored. For two years, the economy in the euro area has been growing month by month, banks are lending and unemployment is steadily falling,. Meanwhile, euro area countries are now able to buy more German exports again, which, for German companies, is partly making up for the decline in trade with China. But it is a slow process because the crisis was more severe than anything we had since the Second World War. | But we must be patient; investor confidence has not yet been fully restored. For two years, the economy in the euro area has been growing month by month, banks are lending and unemployment is steadily falling,. Meanwhile, euro area countries are now able to buy more German exports again, which, for German companies, is partly making up for the decline in trade with China. But it is a slow process because the crisis was more severe than anything we had since the Second World War. |
| As to when interest rates would rise, he said: | As to when interest rates would rise, he said: |
| Quite simple: when the economy is growing more strongly again and inflation rises closer to our objective. Low interest rates today will lead to higher rates tomorrow. | Quite simple: when the economy is growing more strongly again and inflation rises closer to our objective. Low interest rates today will lead to higher rates tomorrow. |
| And he said the majority of governments were acting on the necessary reforms “albeit too slowly for my personal taste. All of them would be well advised to do more. But that is not primarily dependent on the ECB and its policies.” | And he said the majority of governments were acting on the necessary reforms “albeit too slowly for my personal taste. All of them would be well advised to do more. But that is not primarily dependent on the ECB and its policies.” |
| Updated | Updated |
| at 4.39pm BST | at 4.39pm BST |
| 4.17pm BST | 4.17pm BST |
| 16:17 | 16:17 |
| The US Treasury secretary undersecretary for international affairs, Nathan Sheets, has been speaking to a House financial committee, and made some comments on the situation in Greece. Reuters reports: | The US Treasury secretary undersecretary for international affairs, Nathan Sheets, has been speaking to a House financial committee, and made some comments on the situation in Greece. Reuters reports: |
| [He] said that Greece would not have access to the International Monetary Fund’s exceptional lending facilities in the next phase of its bailout, adding that the Treasury supports the IMF’s insistence that the bailout be restructured to make Greece’s debt sustainable with more reforms from Athens and debt relief from European lenders. | [He] said that Greece would not have access to the International Monetary Fund’s exceptional lending facilities in the next phase of its bailout, adding that the Treasury supports the IMF’s insistence that the bailout be restructured to make Greece’s debt sustainable with more reforms from Athens and debt relief from European lenders. |
| 3.59pm BST | 3.59pm BST |
| 15:59 | 15:59 |
| US CRUDE STOCKS rose +2.0 million bbl to 540.6 million bbl in what *should* be their seasonal peak last week or this pic.twitter.com/8R8O6BshS5 | US CRUDE STOCKS rose +2.0 million bbl to 540.6 million bbl in what *should* be their seasonal peak last week or this pic.twitter.com/8R8O6BshS5 |
| 3.53pm BST | 3.53pm BST |
| 15:53 | 15:53 |
| David Morrison, senior market strategist at SpreadCo said: | David Morrison, senior market strategist at SpreadCo said: |
| The latest crude inventories from the EIA showed a build of 2 million barrels last week... Crude fell sharply on the news. Yesterday the American Petroleum Institute reported a draw of nearly 1.1 million barrels in US inventories last week. Oil soared on the news as analysts had expected a build of 2.4 million barrels. | The latest crude inventories from the EIA showed a build of 2 million barrels last week... Crude fell sharply on the news. Yesterday the American Petroleum Institute reported a draw of nearly 1.1 million barrels in US inventories last week. Oil soared on the news as analysts had expected a build of 2.4 million barrels. |
| Both WTI and Brent are trading at their best levels since November last year. The trigger for the latest leg of this rally was talk of an output freeze by OPEC and non-OPEC producers. But all hopes for a deal collapsed ten days ago in Doha amid general recriminations. Nevertheless, crude has continued to push higher as analysts predict that supply and demand will come into balance earlier than previously calculated. | Both WTI and Brent are trading at their best levels since November last year. The trigger for the latest leg of this rally was talk of an output freeze by OPEC and non-OPEC producers. But all hopes for a deal collapsed ten days ago in Doha amid general recriminations. Nevertheless, crude has continued to push higher as analysts predict that supply and demand will come into balance earlier than previously calculated. |
| But it may become more difficult for crude to push on much higher from here. As $50 per barrel becomes a possibility, we should see mothballed US shale production come back on line. On top of that producers will sell forward contracts to lock in prices. | But it may become more difficult for crude to push on much higher from here. As $50 per barrel becomes a possibility, we should see mothballed US shale production come back on line. On top of that producers will sell forward contracts to lock in prices. |
| 3.46pm BST | 3.46pm BST |
| 15:46 | 15:46 |
| US oil inventories climb | US oil inventories climb |
| US crude stocks rose by more than expected last week, up by 2m barrels to 540.6m barrels. | US crude stocks rose by more than expected last week, up by 2m barrels to 540.6m barrels. |
| Analysts had expected an increase of around 1.75m barrels, and the US Energy Information Administration said: “US crude oil inventories are at historically high levels for this time of year.” | Analysts had expected an increase of around 1.75m barrels, and the US Energy Information Administration said: “US crude oil inventories are at historically high levels for this time of year.” |
| EIA Weekly Oil Inventories (Apr 22)Crude +2.00 Mln v +1.75 Mln exp, prev +2.08 MlnCushing +1.75 Mln v +0.24 Mln exp, prev -0.25 Mln | EIA Weekly Oil Inventories (Apr 22)Crude +2.00 Mln v +1.75 Mln exp, prev +2.08 MlnCushing +1.75 Mln v +0.24 Mln exp, prev -0.25 Mln |
| Gasoline +1.61 Mln v -1.00 Mln exp, prev -0.11 MlnDistillate -1.70 Mln v -0.75 Mln exp, prev -3.55 Mln | Gasoline +1.61 Mln v -1.00 Mln exp, prev -0.11 MlnDistillate -1.70 Mln v -0.75 Mln exp, prev -3.55 Mln |
| The rise in crude stocks - a sign of slowing demand - has seen the oil price come off its best levels. Brent, which was up 2% before the data - is now 0.85% higher at $46.13. | The rise in crude stocks - a sign of slowing demand - has seen the oil price come off its best levels. Brent, which was up 2% before the data - is now 0.85% higher at $46.13. |
| 3.16pm BST | 3.16pm BST |
| 15:16 | 15:16 |
| US home sales rise more than expected | US home sales rise more than expected |
| More data for the US Federal Reserve to contemplate as they meet to discuss their latest views on interest rates and the economy. | More data for the US Federal Reserve to contemplate as they meet to discuss their latest views on interest rates and the economy. |
| Home sales rose by more than expected in March, according to the National Association of Realtors. Its pending home sales index climbed 1.4% month on month to 110.5, the highest level since last May and better than the 0.5% increase expected. | Home sales rose by more than expected in March, according to the National Association of Realtors. Its pending home sales index climbed 1.4% month on month to 110.5, the highest level since last May and better than the 0.5% increase expected. |
| US Pending Home Sales Data (Mar)Pending Home Sales M/M +1.4% v +0.5% exp, prev +3.4%Pending Home Sales Y/Y +2.9% v +0.8% exp, prev +5.0% | US Pending Home Sales Data (Mar)Pending Home Sales M/M +1.4% v +0.5% exp, prev +3.4%Pending Home Sales Y/Y +2.9% v +0.8% exp, prev +5.0% |
| Lawrence Yun, the association’s chief economist, said: | Lawrence Yun, the association’s chief economist, said: |
| Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March. This spring’s surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and are taking away some of the sting from home prices that are still rising too fast and above wage growth. | Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March. This spring’s surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and are taking away some of the sting from home prices that are still rising too fast and above wage growth. |
| The association added: | The association added: |
| In the short-term, the healthy labor market and favorable borrowing costs should lead to sustained buyer demand and a durable pace of sales. However, Yun says the consequences from a failure to construct more single-family homes in recent years are starting to impact some top job producing markets, where endless supply shortages continue to limit choices for buyers and are driving up prices beyond what a growing share of households can comfortably afford. | In the short-term, the healthy labor market and favorable borrowing costs should lead to sustained buyer demand and a durable pace of sales. However, Yun says the consequences from a failure to construct more single-family homes in recent years are starting to impact some top job producing markets, where endless supply shortages continue to limit choices for buyers and are driving up prices beyond what a growing share of households can comfortably afford. |
| “Demand is starting to weaken in some areas, particularly in the West, where the median home price has risen an astonishing 38 percent in the past three years,” adds Yun. “As a result, pending sales in the region have now declined in four of the last five months and are lower than one year ago for the third month in a row. Closed sales in the region in March were also below last year’s pace.” | “Demand is starting to weaken in some areas, particularly in the West, where the median home price has risen an astonishing 38 percent in the past three years,” adds Yun. “As a result, pending sales in the region have now declined in four of the last five months and are lower than one year ago for the third month in a row. Closed sales in the region in March were also below last year’s pace.” |
| 3.05pm BST | 3.05pm BST |
| 15:05 | 15:05 |
| Apple is currently the biggest faller in the Dow Jones Industrial Average: | Apple is currently the biggest faller in the Dow Jones Industrial Average: |