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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) | |
| 1.55pm BST | |
| 13:55 | |
| That was quick! | |
| Yanis Varoufakis has hit back at Alexis Tsipras’s criticism over his tenure as finance minister. | |
| In a letter to the Guardian, Varoufakis says: | |
| Either I was the right choice to spearhead the “collision” with the troika of Greece’s lenders because my plans were convincing, or my plans were not convincing and, thus, I was the wrong choice as his first finance minister. | |
| Arguing, as Mr Tsipras does, that I was both the right choice for the initial confrontation and that my plan B was so vague it wasn’t worth the trouble of even talking about is disingenuous, albeit insightful, for it reveals the impossibility of maintaining a radical critique of his predecessors while adopting the Tina (There Is No Alternative) doctrine. | |
| More here: | |
| 1.45pm BST | |
| 13:45 | |
| Helena Smith | |
| Greece’s prime minister set the scene for this week’s debt sale by telling the Guardian that the worst of the debt crisis was now over. | |
| In an interview with my colleague Helena Smith published today, Alexis Tsipras declared that: | |
| “We can now say with certainty that the economy is on the up … Slowly, slowly, what nobody believed could happen, will happen. We will extract the country from the crisis … and in the end that will be judged.” | |
| This interview has caused waves in Greece, where almost the entire media have reproducing excerpts -- including Tsipras’s concession that he made “big mistakes” since wining power in January 2015. | |
| Other highlights include the leftist leader’s dismissal of his former finance minister, Yanis Varoufakis’ Plan B, the contingency programme the self-declared “erratic Marxist” had prepared in the event of debt-stricken Greece being ejected from the euro. | |
| Tsipras broke his silence about Varoufakis’s scheme, labelling it “weak and ineffective.” | |
| “Perhaps the moment will come when certain truths are told ... when we got to the point of reading what he presented as his plan B it was so vague, it wasn’t worth the trouble of even talking about,.... | |
| It was simply weak and ineffective.” | |
| In terms of reaction watch this space! | |
| #Greece - my interview with prime minister Alexis Tsipras in the #Guardian this morning https://t.co/fspWKVyrnY | |
| 1.25pm BST | 1.25pm BST |
| 13:25 | 13:25 |
| This chart shows how Greek bond yields have receded from their crisis-era heights, as confidence has slowly returned. | 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 | 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 | 1.15pm BST |
| 13:15 | 13:15 |
| Greece’s offer to buy back some of its existing five-year bonds is good news for investors. | 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: | 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 | 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 | Updated |
| at 1.16pm BST | at 1.16pm BST |
| 1.10pm BST | 1.10pm BST |
| 13:10 | 13:10 |
| Helena Smith | Helena Smith |
| The Greek finance ministry has set a goal of a 4.2% interest rate on the bond, reports Helena Smith in Athens. | 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. | 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. | 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. | 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 | 12.56pm BST |
| 12:56 | 12:56 |
| Why is Greece launching a new bond sale now? | 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. | 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: | 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. | 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 BST | 12.42pm BST |
| 12:42 | 12:42 |
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| Guardian Business has launched a daily email. | Guardian Business has launched a daily email. |
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| 12.39pm BST | 12.39pm BST |
| 12:39 | 12:39 |
| 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 BST | 12.18pm BST |
| 12:18 | 12:18 |
| Greece to launch new bond sale | Greece 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 BST | 12.09pm BST |
| 12:09 | 12:09 |
| 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 BST | 11.33am BST |
| 11:33 | 11:33 |
| True plight of shrinkflation revealed | True 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/fBr3AL1AWh | Though 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/nRKqKiziSI | Kettle 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. |
| Updated | Updated |
| at 11.38am BST | at 11.38am BST |
| 10.45am BST | 10.45am BST |
| 10:45 | 10:45 |
| 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/4omdpSHgeH | Key point about IMF revisions is this: UK being revised down while Eurozone is being revised up pic.twitter.com/4omdpSHgeH |
| 10.37am BST | 10.37am BST |
| 10:37 | 10:37 |
| 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/z427MVt2Yn | IMF downgrades UK growth forecasts @StatistaCharts @Statista_UK Growth of 17% expected this year ... pic.twitter.com/z427MVt2Yn |
| 10.23am BST | 10.23am BST |
| 10:23 | 10:23 |
| European markets suffer losses | European 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. |