This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/live/2017/jul/24/imf-cuts-uk-growth-forecasts-eurozone-pmi-manufacturing-services-euro-live

The article has changed 9 times. There is an RSS feed of changes available.

Version 4 Version 5
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)
3.40pm BST
15:40
If you’re just tuning in, here’s our news story about Greece’s plan to issue fresh bonds for the first time in three years.
3.31pm BST
15:31
Here’s the latest from Athens:
Greek PM's Office: Bond Issue Important Step Towards Greece's Full & Viable Market Return - RTRS
3.08pm BST3.08pm BST
15:0815:08
..but US house sales slow..but US house sales slow
Another newsflash from America, but this one is less encouraging.Another newsflash from America, but this one is less encouraging.
The number of home sales slumped by 1.8% in June, suggesting the housing market may be cooling.The number of home sales slumped by 1.8% in June, suggesting the housing market may be cooling.
The annual rate of existing home sales dropped to 5.52m, down from 5.62m in June, and lower than Wall Street expected.The annual rate of existing home sales dropped to 5.52m, down from 5.62m in June, and lower than Wall Street expected.
US 'Existing Home Sales' lower than expected for June . . . pic.twitter.com/hfFktELuWvUS 'Existing Home Sales' lower than expected for June . . . pic.twitter.com/hfFktELuWv
Existing home sales fall 1.8% in June, miss estimates at 5.52 million units ...Not looking good ...Existing home sales fall 1.8% in June, miss estimates at 5.52 million units ...Not looking good ...
2.55pm BST2.55pm BST
14:5514:55
US company growth hits six-month highUS company growth hits six-month high
Newsflash! America’s private sector is growing at its fastest pace since JanuaryNewsflash! America’s private sector is growing at its fastest pace since January
US companies are expanding in July, thanks to a boom in new orders that is driving employment up.US companies are expanding in July, thanks to a boom in new orders that is driving employment up.
That’s according to Markit’s latest healthcheck on US manufacturing and service sector companies, just released.That’s according to Markit’s latest healthcheck on US manufacturing and service sector companies, just released.
Markit’s flash US composite output index has hit 54.2 in July, up from 53.9 in June. That’s a six-month high; any reading over 50 shows growth.Markit’s flash US composite output index has hit 54.2 in July, up from 53.9 in June. That’s a six-month high; any reading over 50 shows growth.
US flash #PMI surveys signal fastest growth for 6 months in July (though merely signal c2% GDP growth) https://t.co/fuZAZcD1Ow pic.twitter.com/tCq1ez5Jd9US flash #PMI surveys signal fastest growth for 6 months in July (though merely signal c2% GDP growth) https://t.co/fuZAZcD1Ow pic.twitter.com/tCq1ez5Jd9
Chris Williamson, chief business economist at IHS Markit, says the figures show America’s economy is gaining momentum, but it’s not exactly racing.Chris Williamson, chief business economist at IHS Markit, says the figures show America’s economy is gaining momentum, but it’s not exactly racing.
“The overall rate of expansion remains modest rather than impressive. The surveys are historically consistent with annualized GDP growth of approximately 2%, but the signs are that growth could accelerate further in coming months.“The overall rate of expansion remains modest rather than impressive. The surveys are historically consistent with annualized GDP growth of approximately 2%, but the signs are that growth could accelerate further in coming months.
“Most encouraging was an upturn in new order inflows to the second-highest seen over the past two years, which helped push the rate of job creation to the highest so far this year, indicative of non-farm payrolls growing at a rate of around 200,000.“Most encouraging was an upturn in new order inflows to the second-highest seen over the past two years, which helped push the rate of job creation to the highest so far this year, indicative of non-farm payrolls growing at a rate of around 200,000.
“The principal weak spot in the economy remained exports, with foreign goods orders dropping – albeit only marginally – for the first time since last September, often blamed on the strength of th“The principal weak spot in the economy remained exports, with foreign goods orders dropping – albeit only marginally – for the first time since last September, often blamed on the strength of th
2.33pm BST2.33pm BST
14:3314:33
Wolf Piccoli of Teneo Intelligence believes this bond sale is meant to give Alexis Tsipras some respite from political pressures back home.Wolf Piccoli of Teneo Intelligence believes this bond sale is meant to give Alexis Tsipras some respite from political pressures back home.
He writes:He writes:
The government of Prime Minister Alexi Tsipras is pushing ahead with a bond issue. This is part of an attempt to gain some breathing space amid domestic political problems. The government would like to raise around €4bn; the bond is a switch and tender offer for a €3bn euro-bond issued by the Samaras government in 2014, which matures in April 2019.The government of Prime Minister Alexi Tsipras is pushing ahead with a bond issue. This is part of an attempt to gain some breathing space amid domestic political problems. The government would like to raise around €4bn; the bond is a switch and tender offer for a €3bn euro-bond issued by the Samaras government in 2014, which matures in April 2019.
Athens will also issue new euro-denominated fixed rate notes due in 2022 for cash. The related tender process will take place on 25 July.Athens will also issue new euro-denominated fixed rate notes due in 2022 for cash. The related tender process will take place on 25 July.
Tsipras’s Syriza party have fallen behind in the polls, with the right-leaning New Democracy opening up a substantial lead....Tsipras’s Syriza party have fallen behind in the polls, with the right-leaning New Democracy opening up a substantial lead....
#Greece poll projection [MetronAnalysis]:ND 37%Syriza 22.2%Golden Dawn 8.3%PASOK & allies 8.1%KKE 8%EK 3.8%Potami 2.7%IndGrks 2.7%#Greece poll projection [MetronAnalysis]:ND 37%Syriza 22.2%Golden Dawn 8.3%PASOK & allies 8.1%KKE 8%EK 3.8%Potami 2.7%IndGrks 2.7%
2.16pm BST2.16pm BST
14:1614:16
Helena SmithHelena Smith
Greece’s new foray back into the financial markets will play a big role in setting the mood ahead of its expiry of its €86bn bailout next year.Greece’s new foray back into the financial markets will play a big role in setting the mood ahead of its expiry of its €86bn bailout next year.
If it attracts strong interest from investors it will play a crucial role in quashing suggestions that the debt-stricken country requires a new credit line, or fourth bailout, at that time to keep default at bay.If it attracts strong interest from investors it will play a crucial role in quashing suggestions that the debt-stricken country requires a new credit line, or fourth bailout, at that time to keep default at bay.
Instead, those who think a clean exit possible will be strengthened.Instead, those who think a clean exit possible will be strengthened.
1.55pm BST1.55pm BST
13:5513:55
That was quick!That was quick!
Yanis Varoufakis has hit back at Alexis Tsipras’s criticism over his tenure as finance minister.Yanis Varoufakis has hit back at Alexis Tsipras’s criticism over his tenure as finance minister.
In a letter to the Guardian, Varoufakis says: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.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.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:More here:
1.45pm BST1.45pm BST
13:4513:45
Helena SmithHelena 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.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: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.”“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.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.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.”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,....“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.”It was simply weak and ineffective.”
In terms of reaction watch this space!In terms of reaction watch this space!
#Greece - my interview with prime minister Alexis Tsipras in the #Guardian this morning https://t.co/fspWKVyrnY#Greece - my interview with prime minister Alexis Tsipras in the #Guardian this morning https://t.co/fspWKVyrnY
1.25pm BST1.25pm BST
13:2513:25
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/io2pEaGvMMGreece 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 BST1.15pm BST
13:1513:15
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/r9zcWYeaiqGreece 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
UpdatedUpdated
at 1.16pm BSTat 1.16pm BST
1.10pm BST
13:10
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 BST
12:42
Sign up to our email
Guardian Business has launched a daily email.
Besides the key news headlines that you’d expect, there’s an at-a-glance agenda of the day’s main events, insightful opinion pieces and a quality feature to sink your teeth into each day.
For your morning shot of financial news, sign up here:
12.39pm BST
12:39
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.
Here’s the details:
The full official announcement is online here.
12.18pm BST
12:18
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.
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:
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.
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.
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.
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%.
#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 :)
12.09pm BST
12:09
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:
“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.
“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:
“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.
“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
11:33
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?
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.
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.
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.
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:
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
However, the ONS reckons shrinkflation doesn’t actually undermine its inflation data, as it tracks these changes and adjusts its data accordingly.
Updated
at 11.38am BST
10.45am BST
10:45
The IMF’s new forecasts highlight the dangers posed by the Brexit talks, says Mihir Kapadia, CEO of Sun Global Investments.
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.
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
10.37am BST
10:37
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
10.23am BST
10:23
European markets suffer losses
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.
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:
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.
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.