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Greece launches first bond sale since 2014, as IMF cuts UK growth forecasts - business live Greece launches first bond sale since 2014, as IMF cuts UK growth forecasts - business live
(35 minutes later)
1.25pm BST
13:25
This chart shows how Greek bond yields have receded from their crisis-era heights, as confidence has slowly returned.
Greece is tapping the bond markets two years after it was bought to the brink of a eurozone exit https://t.co/aBNmmMXlTX pic.twitter.com/io2pEaGvMM
1.15pm BST
13:15
Greece’s offer to buy back some of its existing five-year bonds is good news for investors.
Anyone who bought the debt last year, when they traded below their face value, can now sell them back for a profit:
Greece is offering to buy 2019 bonds at 102.6% of face value. If you bought back in February at 90, you're laughing now pic.twitter.com/r9zcWYeaiq
Updated
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1.10pm BST
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Helena Smith
The Greek finance ministry has set a goal of a 4.2% interest rate on the bond, reports Helena Smith in Athens.
But banking sources believe that will be hard to achieve and say an interest rate of between 4.3% to 4.5% is much more likely.
Valuation will take place Tuesday 25th July, our sources add.
The test exit is crucial to Greece not only testing markets, from which it has been essentially exiled since the start of its great economic crisis, but weaning itself off borrowed bailout funds.
12.56pm BST
12:56
Why is Greece launching a new bond sale now?
One reason is that Greek bonds have been strengthening in recent weeks, showing that investors believe the risk of default has fallen.
Reuters’ Alice Gledhill explains:
The €4bn 4.75% 2019 bonds have been trading at a record low yield, bid below 3.5% according to Thomson Reuters prices, making it an opportune time for the country to issue its first deal since 2014.
12.42pm BST12.42pm BST
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12.39pm BST12.39pm BST
12:3912:39
As well as issuing new bonds, Greece is inviting investors who hold its existing five-year bonds to redeem them.As well as issuing new bonds, Greece is inviting investors who hold its existing five-year bonds to redeem them.
Those bonds expire in 2019, but Athens is prepared to swap them for cash now.Those bonds expire in 2019, but Athens is prepared to swap them for cash now.
Here’s the details:Here’s the details:
The full official announcement is online here.The full official announcement is online here.
12.18pm BST12.18pm BST
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Greece to launch new bond saleGreece to launch new bond sale
Breaking news from Athens! Greece’s government is returning to the financial markets for the first time since 2014.Breaking news from Athens! Greece’s government is returning to the financial markets for the first time since 2014.
Six banks have been hired to bring new five-year bonds to the markets, two years after Greece nearly plunged out of the eurozone altogether.Six banks have been hired to bring new five-year bonds to the markets, two years after Greece nearly plunged out of the eurozone altogether.
Reuters has the details:Reuters has the details:
The Hellenic Republic, rated Caa2/B-/CCC/CCCH, has mandated BNP Paribas, Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs and HSBC as joint lead managers for a five-year euro bond, according to a lead.The Hellenic Republic, rated Caa2/B-/CCC/CCCH, has mandated BNP Paribas, Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Goldman Sachs and HSBC as joint lead managers for a five-year euro bond, according to a lead.
The issue is subject to market conditions and the results of a concurrent switch and tender offer.The issue is subject to market conditions and the results of a concurrent switch and tender offer.
Greece will be speaking to investors this afternoon, so we should get more details about how much it hopes to borrow, and on what terms.Greece will be speaking to investors this afternoon, so we should get more details about how much it hopes to borrow, and on what terms.
If the sale it successful, it could help Greece to exit its long cycle of austerity and rescue packages.If the sale it successful, it could help Greece to exit its long cycle of austerity and rescue packages.
Late last Friday, S&P upgraded its outlook on Greek government debt from stable to “positive”, partly thanks to hopes that Greece’s creditors could finally grant it debt relief.Late last Friday, S&P upgraded its outlook on Greek government debt from stable to “positive”, partly thanks to hopes that Greece’s creditors could finally grant it debt relief.
Today’s move comes two weeks after we reported in this blog that the Greek government was planning to return to the markets this summer.Today’s move comes two weeks after we reported in this blog that the Greek government was planning to return to the markets this summer.
The interest rates on Greek bonds has fallen away from their levels at the height of the crisis, fuelling hopes that it could fund itself without the help of painful bailouts.The interest rates on Greek bonds has fallen away from their levels at the height of the crisis, fuelling hopes that it could fund itself without the help of painful bailouts.
Greece mandates six big banks to lead manage 5-year bond issue. 5-year yield now 3.6%. In March 2012 it was a touch higher at 63%.Greece mandates six big banks to lead manage 5-year bond issue. 5-year yield now 3.6%. In March 2012 it was a touch higher at 63%.
#BREAKING -- #Greece announces 5-year bond issuance in next days, hires underwriters#BREAKING -- #Greece announces 5-year bond issuance in next days, hires underwriters
*GREEK GOVT TO SELL BONDS FOR FIRST TIME SINCE JULY 2014I'm sure this will be as successful as the last one :)*GREEK GOVT TO SELL BONDS FOR FIRST TIME SINCE JULY 2014I'm sure this will be as successful as the last one :)
12.09pm BST12.09pm BST
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The IMF’s downgrade growth forecasts have caused a stir in Westminster this morning.The IMF’s downgrade growth forecasts have caused a stir in Westminster this morning.
John McDonnell MP, Labour’s Shadow Chancellor, has just issued a statement, saying:John McDonnell MP, Labour’s Shadow Chancellor, has just issued a statement, saying:
“Today’s report from the IMF is yet another blow for the Government and its continued austerity agenda that is holding our country back.“Today’s report from the IMF is yet another blow for the Government and its continued austerity agenda that is holding our country back.
“It further reveals that this government has no real plan for Brexit and no real plan to deal with the problem of earnings not keeping up with prices, which is undermining growth and risking living standards.“It further reveals that this government has no real plan for Brexit and no real plan to deal with the problem of earnings not keeping up with prices, which is undermining growth and risking living standards.
“Only a Labour government will end austerity and provide the vital programme of investment to boost growth in our economy, underpinned by our Fiscal Credibility Rule, which our country desperately needs.“Only a Labour government will end austerity and provide the vital programme of investment to boost growth in our economy, underpinned by our Fiscal Credibility Rule, which our country desperately needs.
And this is from Heidi Alexander MP, leading supporter of Open Britain:And this is from Heidi Alexander MP, leading supporter of Open Britain:
“These figures underline how the uncertainty and loss of confidence caused by the Brexit vote is hampering our economy. If the Government persists with its plan for a hard and destructive Brexit, our growth figures are likely to get even worse.“These figures underline how the uncertainty and loss of confidence caused by the Brexit vote is hampering our economy. If the Government persists with its plan for a hard and destructive Brexit, our growth figures are likely to get even worse.
“Leaving the largest trading bloc in the world for an inferior deal will not be offset by the illusory promise of quick new trade deals with other countries around the world. The result will be less trade that leaves us all poorer.“Leaving the largest trading bloc in the world for an inferior deal will not be offset by the illusory promise of quick new trade deals with other countries around the world. The result will be less trade that leaves us all poorer.
“To support our economy and protect jobs, the best deal for Britain will be for us to stay in the Single Market and Customs Union, thus continuing to enjoy totally free trade with the world’s biggest market on our doorstep.”“To support our economy and protect jobs, the best deal for Britain will be for us to stay in the Single Market and Customs Union, thus continuing to enjoy totally free trade with the world’s biggest market on our doorstep.”
11.33am BST11.33am BST
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True plight of shrinkflation revealedTrue plight of shrinkflation revealed
Have you ever popped a new bag of crisps open, only to find it contains more air than deliciously fried potato? Or found yourself curiously peckish after wolfing down your favourite chocolate bar?Have you ever popped a new bag of crisps open, only to find it contains more air than deliciously fried potato? Or found yourself curiously peckish after wolfing down your favourite chocolate bar?
If so, you’ve fallen victim to shrinkflation - the practice where manufacturers quietly cut their product sizes without changing the price.If so, you’ve fallen victim to shrinkflation - the practice where manufacturers quietly cut their product sizes without changing the price.
In a new report, the Office for National Statistics shows that more than 2,500 products have shrunk in size over the past five years but prices have stayed the same.In a new report, the Office for National Statistics shows that more than 2,500 products have shrunk in size over the past five years but prices have stayed the same.
Food and drink are particularly vulnerable, perhaps because they are vulnerable to fluctuating commodity costs.Food and drink are particularly vulnerable, perhaps because they are vulnerable to fluctuating commodity costs.
The ONS says we can’t blame it on Brexit, though; this phenomenon has existed for a long time.The ONS says we can’t blame it on Brexit, though; this phenomenon has existed for a long time.
Today’s report explains:Today’s report explains:
Weight changes occur most often in food products rather than any other item category. There are also consistently more reductions across both the food category and non-food items.Weight changes occur most often in food products rather than any other item category. There are also consistently more reductions across both the food category and non-food items.
However, despite some media speculation, there has not been a change in trend since the EU referendum – our data shows that shrinkflation has been used in practice consistently across the past 5 years.However, despite some media speculation, there has not been a change in trend since the EU referendum – our data shows that shrinkflation has been used in practice consistently across the past 5 years.
Consumer journalist Harry Wallop has been tweeting some particularly egregious examples:Consumer journalist Harry Wallop has been tweeting some particularly egregious examples:
Though not sure anyone can quite match the @CadburyUK Milk Tray sold by @Poundland, which has just 7 chocs inside. pic.twitter.com/fBr3AL1AWhThough not sure anyone can quite match the @CadburyUK Milk Tray sold by @Poundland, which has just 7 chocs inside. pic.twitter.com/fBr3AL1AWh
Kettle Bites. 95 calories - for a very good reason. Just 11 and half crisps last time I checked. https://t.co/nRKqKiziSIKettle Bites. 95 calories - for a very good reason. Just 11 and half crisps last time I checked. https://t.co/nRKqKiziSI
However, the ONS reckons shrinkflation doesn’t actually undermine its inflation data, as it tracks these changes and adjusts its data accordingly.However, the ONS reckons shrinkflation doesn’t actually undermine its inflation data, as it tracks these changes and adjusts its data accordingly.
UpdatedUpdated
at 11.38am BSTat 11.38am BST
10.45am BST10.45am BST
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The IMF’s new forecasts highlight the dangers posed by the Brexit talks, says Mihir Kapadia, CEO of Sun Global Investments.The IMF’s new forecasts highlight the dangers posed by the Brexit talks, says Mihir Kapadia, CEO of Sun Global Investments.
He writes:He writes:
“With the IMF’s growth forecast for the UK cut from 2% to 1.7% for the year, this means there is again a focus on the debate about the effect of Brexit on the country’s business. While the IMF’s downgrade has been based on ‘tepid performance’, the ultimate impact of Brexit continues to remain unclear. The key factor which threatens to derail the economy and significantly reduce market confidence is the potential for either the Brexit talks collapsing or reaching stalemate.“With the IMF’s growth forecast for the UK cut from 2% to 1.7% for the year, this means there is again a focus on the debate about the effect of Brexit on the country’s business. While the IMF’s downgrade has been based on ‘tepid performance’, the ultimate impact of Brexit continues to remain unclear. The key factor which threatens to derail the economy and significantly reduce market confidence is the potential for either the Brexit talks collapsing or reaching stalemate.
At the moment, there appears to be negligible progress on the talks and the IMF certainly would have factored the risk of talks stalling in reducing their economic growth forecast.”At the moment, there appears to be negligible progress on the talks and the IMF certainly would have factored the risk of talks stalling in reducing their economic growth forecast.”
Key point about IMF revisions is this: UK being revised down while Eurozone is being revised up pic.twitter.com/4omdpSHgeHKey point about IMF revisions is this: UK being revised down while Eurozone is being revised up pic.twitter.com/4omdpSHgeH
10.37am BST10.37am BST
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Here’s a handy reminder of today’s IMF forecast changes:Here’s a handy reminder of today’s IMF forecast changes:
IMF downgrades UK growth forecasts @StatistaCharts @Statista_UK Growth of 17% expected this year ... pic.twitter.com/z427MVt2YnIMF downgrades UK growth forecasts @StatistaCharts @Statista_UK Growth of 17% expected this year ... pic.twitter.com/z427MVt2Yn
10.23am BST10.23am BST
10:2310:23
European markets suffer lossesEuropean markets suffer losses
A wave of anxiety is sweeping through Europe’s stock markets this morning.A wave of anxiety is sweeping through Europe’s stock markets this morning.
In London, the FTSE 100 index has shed 64 points or 0.9% to 7388.In London, the FTSE 100 index has shed 64 points or 0.9% to 7388.
EasyJet is one of the big fallers, down 3%, after rival budget airline Ryanair announced plans for price cuts this summer.EasyJet is one of the big fallers, down 3%, after rival budget airline Ryanair announced plans for price cuts this summer.
Joshua Mahony of IG explains:Joshua Mahony of IG explains:
The FTSE has suffered a rude awakening to the new week, with the gains of last week clearly left in the rear-view mirror. One of the biggest drags we have seen has come from the airline sector, with Ryanair’s warning of a potential air fare war in the coming months leading to sharp falls for easyJet and IAG, the owner of airlines including British Airways, Iberia and Aer Lingus.The FTSE has suffered a rude awakening to the new week, with the gains of last week clearly left in the rear-view mirror. One of the biggest drags we have seen has come from the airline sector, with Ryanair’s warning of a potential air fare war in the coming months leading to sharp falls for easyJet and IAG, the owner of airlines including British Airways, Iberia and Aer Lingus.
This morning the IMF cut its growth forecast for the UK for the first time since the EU referendum over a year ago. Chief amongst its concerns is the tepid economic performance seen in the first quarter of 2017, with the enactment of Article 50 coinciding with a deterioration in both business and consumer confidence.This morning the IMF cut its growth forecast for the UK for the first time since the EU referendum over a year ago. Chief amongst its concerns is the tepid economic performance seen in the first quarter of 2017, with the enactment of Article 50 coinciding with a deterioration in both business and consumer confidence.
European markets are also in the red.European markets are also in the red.
Germany’s DAX has shed 0.5%, dragged by car companies such as Volkswagen and Daimler. That follows reports that the German auto industry colluded in a “secret technology cartel” for the past 20 years.Germany’s DAX has shed 0.5%, dragged by car companies such as Volkswagen and Daimler. That follows reports that the German auto industry colluded in a “secret technology cartel” for the past 20 years.
10.15am BST
10:15
UK businesses should heed the IMF’s warning that Britain’s economy is weakening, says Markus Kuger, Senior Economist at Dun & Bradstreet:
“The IMF’s downgrade reflects the undercurrent of political and economic uncertainty in the UK, as the impact of Brexit on the economy remains unclear. The first quarter of the year saw a mediocre economic performance and Dun & Bradstreet rates the level of risk in the UK as ‘deteriorating’.
The slow progress of Brexit negotiations is creating considerable unpredictability for businesses operating in and with the UK. This has only been intensified by the results of the general election in June, as the government’s narrow parliamentary majority is further complicating the process of leaving the EU.
“The best advice for businesses is to closely monitor the economic climate and the progress of EU negotiations, and use the latest data and analytics to assess risk and identify potential opportunities. As Brexit negotiations progress organisations should get a clearer picture of the future, but until then careful management of relationships with suppliers, customers, prospects and partners will be key to navigating through these uncertain times.”
9.35am BST
09:35
IMF's Global Outlook: What the experts say
The International Monetary Fund’s new growth forecasts are getting plenty of coverage this morning.
The Financial Times reports that the Fund expects the “broadest synchronised upswing” in a decade.
Better growth in China, the euro zone and Japan is making up for a slower-than-expected US economy and Donald Trump’s stalled economic promises as well as a faltering UK, the International Monetary Fund said on Monday.
In its latest update, the IMF left its April forecasts for 3.5 per cent global growth this year and 3.6 per cent next year unchanged. But the lack of change in the world’s headline growth masked what the IMF said was a rotation in the sources of growth.
Sky News flag up that the UK has been downgraded, while Europe’s recovery looks to be gathering pace:
The International Monetary Fund has lowered its growth forecast for the UK to 1.7% for 2017.
The organisation said a weaker than expected performance meant it was revising expectations from the 2% it predicted in April.
The US also had its economic forecast downgraded to 2.1% from 2.3%.
It comes in contrast to major European countries including Germany, France, Italy and Spain, where growth exceeded expectations.
Germany has been revised up by 0.2 points to 1.8%, France by 0.1 points to 1.5%, while Italy and Spain have both been revised up by 0.5 points to 1.3% and 3.1% respectively.
Reuters sums up the global picture:
The International Monetary Fund kept its growth forecasts for the world economy unchanged for this year and next, although it revised up growth expectations for the eurozone and China.
In an updated World Economic Outlook published on Monday, the IMF said global gross domestic product would grow 3.5 percent in 2017 and 3.6 percent in 2018, unchanged from estimates issued in April.
“While risks around the global growth forecast appear broadly balanced in the near term, they remain skewed to the downside over the medium term,” the IMF said in updated forecasts released in the Malaysian capital, Kuala Lumpur.
But...forecasts are made to be missed. Steve Hawkes of The Sun reminds us that the IMF predicted Britain would plunge into recession if it voted to leave the EU.....
IMF says Brexit will have a "mild negative" affect on the UK economy. Not quite as bad as Mme Lagarde spelt out in 2016 (1/2)
But the IMF downgrade for 2017 shows how business is worried. More the political games carry on, the more the investment taps will turn off
Ranko Berich of Monex Europe is refreshingly sceptical about the IMF’s crystal ball.....
"Opposite of IMF view" remains the most reliably accurate way of forecasting the UK economy
9.24am BST
09:24
Here’s Julien Lafargue, European Equities Strategist at JP Morgan, on today’s eurozone PMI reports:
Following one of the best quarters in the past six years, a slowdown in the Eurozone’s pace of expansion was to be expected. Yet, economies in the region continue to grow strongly, and the details of today’s survey point to a continuation of this trend in the coming months.
Encouragingly, the recent strength of the Euro does not appear to be cited as a concern at this point with new export order growth in Germany’s goods producing sector accelerating slightly in July.
If sustained, the Euro’s appreciation may represent a headwind. However, at this stage, we believe it is not enough to derail the recovery in the region and we would expect the ECB to prevent further appreciation if it comes to a point where it jeopardizes the region’s economic momentum.
That appreciation has continued this morning, with the euro hitting a two-year high.
Good #EURO morning! The euro continues to rise, now at 1.1670 against the #USD, highest level since January 2015. pic.twitter.com/sXM34nqLFH
9.12am BST
09:12
Eurozone recovery continues, but growth slips a little
Breaking: Companies across the eurozone are continuing to expand robustly, although growth has dipped to a six-month low.
That’s according to Markit’s latest healthcheck on the euro area, including this morning’s figures from France and Germany.
Manufacturing firms led the way, with strong order book growth, rising backlogs and healthy job creation during this month.
However... the figures are a little weaker than in the spring.
#Eurozone PMI slightly lower in July. Still at levels suggesting strong growth. pic.twitter.com/4Q1gXlkQF8
Chris Williamson, Chief Business Economist at IHS Markit, says the data suggests Europe is still growing strongly (echoing the IMF’s upbeat comments this morning).
“The July fall in the PMI indicates that the eurozone’s recent growth spurt lost momentum for a second successive month, but still remained impressive.
“The survey data are historically consistent with GDP rising at a quarterly rate of 0.6%, cooling slightly from a pace of over 0.7% signalled for the second quarter.
“The slowing pace of economic growth signalled by the surveys and the accompanying easing of price pressures adds to the belief that ECB policymakers will be in no rush to taper policy, and will leave all options open until the central bank sees a clearer picture of the sustainability of the upturn.
“It’s too early to know for sure whether the economy has merely hit a speed bump or whether the upturn is already starting to fade. The evidence so far points to the former, with the economy hitting bottlenecks due to the speed of the recent upturn.
“Forward-looking indicators such as new order inflows remain elevated, suggesting robust growth will be sustained in coming months. Job creation is consequently booming as companies seek to expand capacity in line with growing demand.
8.47am BST
08:47
German growth slows
Germany’s ‘flash PMIs’ have just been released, and they suggest private sector growth has hit a six-month low.
Manufacturing and service sector companies in Europe’s largest economy reported that activity rose at a slower rate this month.
This pulled the ‘Flash Germany Composite Output Index’ down to 55.1 in July, down from 56.4 in June.
That suggests Germany’s private sector is growing that the slowest rate since January, after a very strong start to 2017.
So what changed this month?
Well, Germany companies report that growth in manufacturing output and total new orders slowed this month, even though there is still “high demand” from customers in both Europe and Asia.
Trevor Balchin, Senior Economist at IHS Markit, believes Germany is still enjoying “strong underlying growth”.
The easing seen in July follows the strongest quarter in six years, and manufacturing continued to expand at a historically sharp rate. New export order growth in the goods- producing sector accelerated slightly and suppliers remained under substantial pressure.
8.29am BST
08:29
French factory growth hits six-year high
Boom! France’s factories are enjoying their best month since 2011, thanks to a surge in new orders.
That’s according to the latest French PMI report from Markit, just released.
Markit found that manufacturing output accelerated to its fastest rate in 75 months, jumping to 55.4 in July from 54.8 in June.
Service sector growth slowed a little, sending the services PMI down to 55.9 from 56.9.
Any reading over 50 shows growth, so this indicates that the French economy is still growing strongly.
French PMI Manuf beats, Services missed
French companies reported that new business picked up strongly this month, creating larger backlogs of work and encouraging them to take on more staff.
Annabel Fiddes, Economist at IHS Markit, explains:
“Steep increases in output and employment were key takeaways from the latest release, with manufacturing firms noting the quickest rise in staff numbers for nearly 17 years.
“Further increases in total new orders and backlogs suggest that companies will continue to ramp up output and add to payrolls going forward, and marks a solid start to the second half of the year.”
8.14am BST
08:14
IMF's global outlook: the key points
Despite cutting its UK and US growth forecasts, the IMF still thinks the global recovery is ‘firming’.
That’s because it revised up its growth expectations for the eurozone to 1.9% this year, up from 1.7% in April.
For China, the IMF expects stronger growth of 6.7% in 2017, up 0.1 percentage point. Japan’s growth forecast this year has also been raised, from 1.2% to 1.3%.
In its latest World Economic Outlook, the Fund says:
Growth has been revised up for Japan and especially the euro area, where positive surprises to activity in late 2016 and early 2017 point to solid momentum.
China’s growth projections have also been revised up, reflecting a strong first quarter of 2017 and expectations of continued fiscal support. Inflation in advanced economies remains subdued and generally below targets; it has also been declining in several emerging economies, such as Brazil, India, and Russia....
Growth projections for 2017 have been revised up for many euro area countries, including France, Germany, Italy, and Spain, where growth for the first quarter of 2017 was generally above expectations. This, together with positive growth revisions for the last quarter of 2016 and high-frequency indicators for the second quarter of 2017, indicate stronger momentum in domestic demand than previously anticipated.
This infographic has more details:
Updated
at 8.15am BST
7.59am BST
07:59
The IMF has also cut its growth forecast for the US, having concluded that Donald Trump will struggle to deliver the infrastructure plan he promised.
Growth this year has been cut from 2.3% to 2.1%, while 2018’s forecast has been slashed from 2.5% to 2.1%.
It says:
While the markdown in the 2017 forecast reflects in part the weak growth outturn in the first quarter of the year, the major factor behind the growth revision, especially for 2018, is the assumption that fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of U.S. fiscal policy changes.
Market expectations of fiscal stimulus have also receded.
7.55am BST
07:55
Britain’s finance ministry has responded to the news that the International Monetary Fund have cut their UK growth forecasts this year.
A Treasury spokesperson insisted “the fundamentals of our economy are strong”, adding that the ongoing Brexit talks are crucial:
“This forecast underscores exactly why our plans to increase productivity and ensure we get the very best deal with the EU are vitally important.”
7.46am BST
07:46
The agenda: IMF cuts UK growth forecast
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
A new week brings new concerns over Britain’s economy.
The International Monetary Fund has cut its forecasts for UK growth this year, citing recent evidence that the economy is weakening.
The IMF now expects Britain’s GDP to only expand by 1.7% this year, down from 2% growth forecast in April.
If they’re right, it suggests that Brexit uncertainty may be hurting the UK.
Maurice Obstfeld, the IMF’s economic counsellor, pointed to a marked change in early 2017. He said the UK’s growth forecast had been lowered based on its “tepid performance” so far this year, adding:
“The ultimate impact of Brexit on the United Kingdom remains unclear.”
The IMF still expect the UK to grow by 1.5% in 2018, but said one key risk facing the global economy was that the Brexit talks would end in failure.
But the Fund is rather more optimistic about Europe.
Germany’s growth has been revised up by 0.2 points to 1.8%, France by 0.1 points to 1.5%, while Italy and Spain have both been revised up by 0.5 points to 1.3% and 3.1% respectively.
Here’s our full take:
Also coming up today:
We get a new healthcheck on the eurozone economy this morning, with the latest ‘flash PMI’ surveys from data firm Markit.
They are expected to show that private sector companies in Germany and France continued to grow strongly this month, after posting their fastest growth since 2011 earlier this year.
Royal Bank of Canada say:
The day’s main data release are ‘flash’ PMIs for the euro area, France and Germany. These are the readings for July so will provide an important indication of how the euro area economy has begun Q3.
The June readings pointed to a slight loss of momentum at the end of the second quarter but that was coming off their highest level in six years in April and May and, at 56.4, the average composite reading for the quarter was still pointing to activity picking up from Q1.
The fall between May and June was attributable to the service sector; by contrast the manufacturing PMI remained comfortably above its long-run average. With other indicators of domestic activity remaining robust we see some scope for the services PMI to recover a little this month and expect it to rise to 55.6 with the manufacturing reading remaining unchanged from its recent elevated level at 57.4.
The agenda:
8am BST: French manufacturing and service sector PMI for July
8.30am BST: German manufacturing and service sector PMI for July
9am BST: Eurozone manufacturing and service sector PMI for July
2.45pm BST: US manufacturing and service sector PMI for July
3pm: UK home sales for June
Updated
at 7.51am BST