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Eurozone crisis live: UK sinks into double-dip recession Eurozone crisis live: UK sinks into double-dip recession
(40 minutes later)
11.24am: Greece is clamping down on benefit fraud. A labour ministry official said this morning, it has stopped benefits, including pensions, to some 200,000 people who lied to get their monthly cheques or were in fact dead.
Athens apparently discovered the fraud after basic data checks and means-testing, which it started following pressure from its international lenders to cut deficits.
11.22am: There's more analysis from my colleague Polly Curtis on the cause of the double-dip recession. She asks, is the coalition's economic strategy to blame, or the eurozone crisis?
11.10am: The German government is coming out with some economic forecasts to make George Osborne turn green.
It is sticking to forecasts that growth in the German economy will likely slow to 0.7% in 2012, and will expand by 1.6% in 2013.
The government believes private consumption remains the support for growth and expects disposable income to rise 3.3% this year, and 3.1% in 2013. Economy minister Philipp Roesler said:
Even if the German economy is excellently positioned, we have deliberately remained on the cautious side with our forecasts. This is because the risks in the international environment remain high. The European sovereign debt crisis has not been solved.
He said Germany supported the ECB in returning to "normal mode" of monetary policy and its focus on price stability.
11.05am: There's a couple of lines coming out of Germany's debt agency, which said in a statement that the bond auction reflects the very volatile, uncertain market environment.
A spokesman for the agency subsequently told Reuters that they see no difficulty in placing the Bunds they did not sell in the secondary market. He said the market is somewhat saturated and the ability to absorb fresh long-term debt was limited.
11.00am: Another wry observation that the low yields on Germany's government debt are a product of the market we are in, from Sony Kapoor of think-tank Re-Define.
Low #German bond yields are more a case of the one-eyed being the king in the land of the blind than anything else! Flight 2 relative safety
— Sony Kapoor (@SonyKapoor) April 25, 2012
10.52am: Today's figures show just how badly the UK is doing, compared with the US. The British economy is still 4.3% smaller than in was before recession of 2008, by contrast the US has recovered its losses.10.52am: Today's figures show just how badly the UK is doing, compared with the US. The British economy is still 4.3% smaller than in was before recession of 2008, by contrast the US has recovered its losses.
Reuters have put out a chart comparing the trajectory of GDP in the UK, US and Eurozone.Reuters have put out a chart comparing the trajectory of GDP in the UK, US and Eurozone.
10.44am: It should be noted that not everyone was flocking to buy the German debt at those levels, as the Bundesbank could not sell all of the €3bn of Bunds on sale, making it technically a failed auction. Dow Jones currencies editor Katie Martin notes that this will no doubt prompt heated discussions among market commentators....10.44am: It should be noted that not everyone was flocking to buy the German debt at those levels, as the Bundesbank could not sell all of the €3bn of Bunds on sale, making it technically a failed auction. Dow Jones currencies editor Katie Martin notes that this will no doubt prompt heated discussions among market commentators....
Cue the usual 'OMG Germany is screwed' vs 'no it's just a really low yield' shouting match.Cue the usual 'OMG Germany is screwed' vs 'no it's just a really low yield' shouting match.
— Katie Martin (@katie_martin_FX) April 25, 2012— Katie Martin (@katie_martin_FX) April 25, 2012
10.39am: Fund management veteran Pawel Morski points out that the successful German bond auction only serves to demonstrate the fear in the markets.10.39am: Fund management veteran Pawel Morski points out that the successful German bond auction only serves to demonstrate the fear in the markets.
Remember: people buy bunds when they're scared of everything else. Everybody except John Paulson understands this.Remember: people buy bunds when they're scared of everything else. Everybody except John Paulson understands this.
— P M (@Pawelmorski) April 25, 2012— P M (@Pawelmorski) April 25, 2012
10.36am: Germany, meanwhile, has managed to sell €2.4bn of 30-year Bunds at a record low yield (the interest rate it must pay on the debt) of 2.41%. 10.36am: Germany, meanwhile, has managed to sell €2.4bn of 30-year Bunds at a record low yield (the interest rate it must pay on the debt) of 2.41%.
10.29am: Our economics editor Larry Elliott gives his view of the UK GDP figures. You can read his full analysis here.10.29am: Our economics editor Larry Elliott gives his view of the UK GDP figures. You can read his full analysis here.
The dip in activity is small but massively significant. With the Government up to its eyeballs in the phone hacking scandal and with local elections looming, the timing could hardly have been worse for David Cameron and George Osborne.The dip in activity is small but massively significant. With the Government up to its eyeballs in the phone hacking scandal and with local elections looming, the timing could hardly have been worse for David Cameron and George Osborne.
Slow growth makes it harder for the Government to hit its deficit-reduction targets and may well result in the UK having its credit-rating downgraded. That would be a bitter blow for Osborne, since his entire economic and political strategy has relied on the UK remaining in the dwindling club of nations with a prized AAA rating.Slow growth makes it harder for the Government to hit its deficit-reduction targets and may well result in the UK having its credit-rating downgraded. That would be a bitter blow for Osborne, since his entire economic and political strategy has relied on the UK remaining in the dwindling club of nations with a prized AAA rating.
City analysts, once again caught on the hop by the dismal growth figures, will no doubt make the point that the main reason behind the 0.2% contraction in the first quarter was the performance of the construction sector, where the figures are notoriously prone to revision.City analysts, once again caught on the hop by the dismal growth figures, will no doubt make the point that the main reason behind the 0.2% contraction in the first quarter was the performance of the construction sector, where the figures are notoriously prone to revision.
It could well be that fresh data over the coming months will see growth revised up and no double-dip recession after all. But today's announcement will be big news; any positive changes later will not be. The damage has been done.It could well be that fresh data over the coming months will see growth revised up and no double-dip recession after all. But today's announcement will be big news; any positive changes later will not be. The damage has been done.
10.17am: In the UK, we've got plenty of reaction to the dismal GDP figures. The centre-left think tank IPPR said:10.17am: In the UK, we've got plenty of reaction to the dismal GDP figures. The centre-left think tank IPPR said:
This is a further blow for the government's reputation for economic competency.This is a further blow for the government's reputation for economic competency.
The economists are mixed on the results. Chris Williamson, at Markit, said:The economists are mixed on the results. Chris Williamson, at Markit, said:
The underlying strength of the economy is probably much more robust than these data suggest. The danger is that these gloomy data deliver a fatal blow to the fragile revival of consumer and business confidence seen so far this year, harming the recovery and even sending the country back into a real recession.The underlying strength of the economy is probably much more robust than these data suggest. The danger is that these gloomy data deliver a fatal blow to the fragile revival of consumer and business confidence seen so far this year, harming the recovery and even sending the country back into a real recession.
David Miller, partner at Cheviot Asset Management agrees:David Miller, partner at Cheviot Asset Management agrees:
Investors have been looking to the GDP figures coming up this week as their fear is that should numbers be poor, we could be in for a repeat of July and August last year when the markets sold off. From corporate results this does not feel like a recession. Today's numbers could, however, have a negative effect on consumer and business confidence and so be self-fulfilling as we enter the summer months.Investors have been looking to the GDP figures coming up this week as their fear is that should numbers be poor, we could be in for a repeat of July and August last year when the markets sold off. From corporate results this does not feel like a recession. Today's numbers could, however, have a negative effect on consumer and business confidence and so be self-fulfilling as we enter the summer months.
James Knightley, UK economist at ING, says the data is unlikely to heral more QE next month:James Knightley, UK economist at ING, says the data is unlikely to heral more QE next month:
Deputy Bank of England governor, Paul Tucker, commented recently that the GDP numbers come with a "risk of mismeasurement" because of construction data issues. He indicated that looking at the business surveys may provide a truer picture of the state of the UK economy than the official measure of GDP, which suggests he will not be overly concerned by a disappointing GDP reading. Consequently this is unlikely to significantly alter the outlook for policy with further QE probably not coming through in May.Deputy Bank of England governor, Paul Tucker, commented recently that the GDP numbers come with a "risk of mismeasurement" because of construction data issues. He indicated that looking at the business surveys may provide a truer picture of the state of the UK economy than the official measure of GDP, which suggests he will not be overly concerned by a disappointing GDP reading. Consequently this is unlikely to significantly alter the outlook for policy with further QE probably not coming through in May.
Vicky Redwood, senior UK economist at Capital Economics, says she would not dismiss today's figures so readily:Vicky Redwood, senior UK economist at Capital Economics, says she would not dismiss today's figures so readily:
Even if the underlying picture is stronger than the official GDP figures show, there is no guarantee that the recent pickup will continue. Indeed, we remain comfortable with our view that GDP will contract by about 0.5% this year.Even if the underlying picture is stronger than the official GDP figures show, there is no guarantee that the recent pickup will continue. Indeed, we remain comfortable with our view that GDP will contract by about 0.5% this year.
10.06am: Back to the European Parliament, where ECB President Mario Draghi said the results of the bank lending survey were "encouraging" but demand for credit is still very weak.10.06am: Back to the European Parliament, where ECB President Mario Draghi said the results of the bank lending survey were "encouraging" but demand for credit is still very weak.
He gave no indication that the ECB was poised to provide more support for banks or governments but also said the time was not right to consider rolling back its crisis-fighting measures.He gave no indication that the ECB was poised to provide more support for banks or governments but also said the time was not right to consider rolling back its crisis-fighting measures.
The primary mandate of the ECB is ensuring price stability in the medium terms for the whole fo the euro area. I think that we have to ... [keep] this thin but delicate balance where we want to preserve the credibility of the ECB.The primary mandate of the ECB is ensuring price stability in the medium terms for the whole fo the euro area. I think that we have to ... [keep] this thin but delicate balance where we want to preserve the credibility of the ECB.
But he said an exit strategy from the ECB's emergency measures was "premature" given prevailing conditions.But he said an exit strategy from the ECB's emergency measures was "premature" given prevailing conditions.
10.02am: General consensus is that this is a terrible outcome for Chancellor George Osborne. Channel 4 reporter Faisal Islam points out the huge discrepancy in what has happened in the economy compared with what was supposed to happen...10.02am: General consensus is that this is a terrible outcome for Chancellor George Osborne. Channel 4 reporter Faisal Islam points out the huge discrepancy in what has happened in the economy compared with what was supposed to happen...
In all 8 quarters since the Chancellor arrived at Number 11, economy has grown 0.4% vs 4.3%* predicted by June 2010 deficit reduction planIn all 8 quarters since the Chancellor arrived at Number 11, economy has grown 0.4% vs 4.3%* predicted by June 2010 deficit reduction plan
— Faisal Islam (@faisalislam) April 25, 2012— Faisal Islam (@faisalislam) April 25, 2012
The 4.3% is, apparently, composed of 3.6% identified by the Office for Budget Responsibility plus 1/4 of 2012 estimate of 2.8% also by OBR.The 4.3% is, apparently, composed of 3.6% identified by the Office for Budget Responsibility plus 1/4 of 2012 estimate of 2.8% also by OBR.
9.55am: The briefing has now finished. Looking at the GDP release, the ONS has adjusted the data to take into account the leap year on 29th February, by adjusting February's value to "represent an average length February of 28 1/4 days". This, Joe Grice said, is "in accordance with best international practice".9.55am: The briefing has now finished. Looking at the GDP release, the ONS has adjusted the data to take into account the leap year on 29th February, by adjusting February's value to "represent an average length February of 28 1/4 days". This, Joe Grice said, is "in accordance with best international practice".
... thanks to Graeme Wearden for those updates.... thanks to Graeme Wearden for those updates.
9.55am: Reuters asks Joe Grice whether the ONS expects a similar performance in the second quarter of 2012. He won't be drawn into speculation, saying:9.55am: Reuters asks Joe Grice whether the ONS expects a similar performance in the second quarter of 2012. He won't be drawn into speculation, saying:
We have enough problems, as these questions have shown, trying to measure the current quarter.We have enough problems, as these questions have shown, trying to measure the current quarter.
We're not in the business of forecasting, he adds.We're not in the business of forecasting, he adds.
9.54am: The 'bigger picture'in today's GDP data is that the UK economy, in volume terms, was flat in Q1 2012 compared to Q1 2011.9.54am: The 'bigger picture'in today's GDP data is that the UK economy, in volume terms, was flat in Q1 2012 compared to Q1 2011.
Looking at the UK since last summer, Joe Grice says, the picture is of "a flattish economy".Looking at the UK since last summer, Joe Grice says, the picture is of "a flattish economy".
Britain is the first major economy to report GDP data for the last quarter. Grice is asked whether there have been discussions between the ONS and the Bank of England about whether to wait a bit longer and get more data in. Grice responds that:Britain is the first major economy to report GDP data for the last quarter. Grice is asked whether there have been discussions between the ONS and the Bank of England about whether to wait a bit longer and get more data in. Grice responds that:
We haven't had discussions about this..... clearly there is an advantage in having data earlier rather than later.We haven't had discussions about this..... clearly there is an advantage in having data earlier rather than later.
9.48am: Today's data is only the preliminary estimate of Q1 GDP in 2012, based on aroudn 42% of total output during the quarter (it mainly covered January and February).9.48am: Today's data is only the preliminary estimate of Q1 GDP in 2012, based on aroudn 42% of total output during the quarter (it mainly covered January and February).
Joe Grice says there is: "as much chance of an upward revision as a downward one"Joe Grice says there is: "as much chance of an upward revision as a downward one"
9.46am: The ONS is challenged over its use of construction data -- today's data includes a 3.0% plunge in construction output. Last week, the Bank of England minutes showed that it has some concerns.9.46am: The ONS is challenged over its use of construction data -- today's data includes a 3.0% plunge in construction output. Last week, the Bank of England minutes showed that it has some concerns.
Joe Grice responds that the ONS polls 8,000 construction firms to track activity. It's fully confident that its data is accurate.Joe Grice responds that the ONS polls 8,000 construction firms to track activity. It's fully confident that its data is accurate.
9.45am: Updates from Graeme Wearden at the GDP press conference...9.45am: Updates from Graeme Wearden at the GDP press conference...
small gasp and furions tapping as joe grice reveals the Uk is back
into recession.		small gasp and furions tapping as joe grice reveals the Uk is back
into recession.
The first question -- are there any special factors that might have influenced this data? Joe Grice says no. The panic fuel buying has probably not had any effect, he says.The first question -- are there any special factors that might have influenced this data? Joe Grice says no. The panic fuel buying has probably not had any effect, he says.
9.40am: Duncan Weldon of the TUC expresses the general feeling of doom following the UK's GDP figures.9.40am: Duncan Weldon of the TUC expresses the general feeling of doom following the UK's GDP figures.
I was expecting weak growth around the 0.1 or 0.2% mark. Which would have been very bad. This is just awful.I was expecting weak growth around the 0.1 or 0.2% mark. Which would have been very bad. This is just awful.
— Duncan Weldon (@DuncanWeldon) April 25, 2012— Duncan Weldon (@DuncanWeldon) April 25, 2012
9.39am: George Osborne has put out a statement reacting to the news saying the UK economic situation is very tough and is taking longer than hoped to recover. But he won't be swayed from Plan A.9.39am: George Osborne has put out a statement reacting to the news saying the UK economic situation is very tough and is taking longer than hoped to recover. But he won't be swayed from Plan A.
The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt.The one thing that would make the situation even worse would be to abandon our credible plan and deliberately add more borrowing and even more debt.
He says paying off the debt is harder as Europe nears recession and notes that the UK faces the "biggest debt crisis of our lifetimes".He says paying off the debt is harder as Europe nears recession and notes that the UK faces the "biggest debt crisis of our lifetimes".
9.30am: The pound dropped on the news that the UK is officially back in recession, which produced a gasp in the newsroom. We'll have more detail coming in from Graeme Wearden who's at the press conference9.30am: The pound dropped on the news that the UK is officially back in recession, which produced a gasp in the newsroom. We'll have more detail coming in from Graeme Wearden who's at the press conference
First quarter construction output was down by 3%, the biggest drop since the first quarter of 2009, and compared with a drop of 0.2% in the last quarter of 2011.First quarter construction output was down by 3%, the biggest drop since the first quarter of 2009, and compared with a drop of 0.2% in the last quarter of 2011.
9.30am: UK GDP came in at -0.2 9.30am: UK drops into recession after first quarter GDP came in at -0.2
9.06am: My colleague Graeme Wearden is embedded at Church House in Westminster for the Office for National Statistics press briefing on UK GDP for the first quarter of 2012.9.06am: My colleague Graeme Wearden is embedded at Church House in Westminster for the Office for National Statistics press briefing on UK GDP for the first quarter of 2012.
He writes:He writes:
At 9.30 sharp, we'll find out whether the UK is in recession again. Joe Grice, ONS chief economist, and senior statistician Harry Duff will then answer a few questions from the assembled media (which consists of me and a group of cameramen, at the time of writing).At 9.30 sharp, we'll find out whether the UK is in recession again. Joe Grice, ONS chief economist, and senior statistician Harry Duff will then answer a few questions from the assembled media (which consists of me and a group of cameramen, at the time of writing).
Following the 0.3% contraction in Q4 2011, City economists expect meagre growth of perhaps 0.1% to 0.3%. But a second contraction can't be ruled out (as Bank of England dove David Miles warned yesterday evening).Following the 0.3% contraction in Q4 2011, City economists expect meagre growth of perhaps 0.1% to 0.3%. But a second contraction can't be ruled out (as Bank of England dove David Miles warned yesterday evening).
We've certainly got the weather for a double-dip recession -- it has been tipping it down in London this morning.We've certainly got the weather for a double-dip recession -- it has been tipping it down in London this morning.
9.00am: The consensus opinion for UK GDP may be growth of 0.1%, but economists at the big banks are more downbeat, as FT reporter Alice Ross notes:9.00am: The consensus opinion for UK GDP may be growth of 0.1%, but economists at the big banks are more downbeat, as FT reporter Alice Ross notes:
Much protective muttering among investment banks this morning predicting doom for UK Q1 GDP. Consensus is 0.1% but not judging by my inbox.Much protective muttering among investment banks this morning predicting doom for UK Q1 GDP. Consensus is 0.1% but not judging by my inbox.
— Alice Ross (@aliceemross) April 25, 2012— Alice Ross (@aliceemross) April 25, 2012
8.48am: More from ECB president Mario Draghi, who's speaking to the European Parliament.8.48am: More from ECB president Mario Draghi, who's speaking to the European Parliament.
He says the financial market situation has markedly improved since the long-term refinancing operation, and constraints on bank lending have declined significantly since the second tranche of money was released in February. Referring to the possibility of another LTRO, he said "we never precommit".He says the financial market situation has markedly improved since the long-term refinancing operation, and constraints on bank lending have declined significantly since the second tranche of money was released in February. Referring to the possibility of another LTRO, he said "we never precommit".
He was also keen to stress the role individual banks must play.He was also keen to stress the role individual banks must play.
I consider it of crucial importance that banks strengthen their resilience further, including by retaining earnings and by retaining bonus payments. The soundness of banks' balance sheets will be a key factor in facilitating both an appropriate provision of credit to the economy and the normalisation of their funding channels.I consider it of crucial importance that banks strengthen their resilience further, including by retaining earnings and by retaining bonus payments. The soundness of banks' balance sheets will be a key factor in facilitating both an appropriate provision of credit to the economy and the normalisation of their funding channels.
8.22am: ECB President Mario Draghi has been speaking to the European Parliament's Committee on Economic and Monetary Affairs. He sees economic activity stabilising "at a low level", noting that developments in survey data are mixed, highlighting the prevailing uncertainty.8.22am: ECB President Mario Draghi has been speaking to the European Parliament's Committee on Economic and Monetary Affairs. He sees economic activity stabilising "at a low level", noting that developments in survey data are mixed, highlighting the prevailing uncertainty.
Looking ahead, he says growth should be supported by foreign demand, very low short-term interest rates, as well as the ECB's "non-standard measures", such as the bank's long-term refinancing operation.Looking ahead, he says growth should be supported by foreign demand, very low short-term interest rates, as well as the ECB's "non-standard measures", such as the bank's long-term refinancing operation.
On the downside, he said risks relate to renewed intensification of eurozone debt market tensions and potential spillover to the economy. Further rises in commodity prices could also hamper economic activity. He thinks inflation risks are balanced.On the downside, he said risks relate to renewed intensification of eurozone debt market tensions and potential spillover to the economy. Further rises in commodity prices could also hamper economic activity. He thinks inflation risks are balanced.
Inflation is likely to stay above 2% in the course of this year, because of recent increases in energy prices and indirect taxes. The governing council continues to expect annual inflation rates to fall below 2% in early 2013.Inflation is likely to stay above 2% in the course of this year, because of recent increases in energy prices and indirect taxes. The governing council continues to expect annual inflation rates to fall below 2% in early 2013.
He is confident central bank liquidity has come very close to the real economy. And says that credit growth depends on demand, which is likely to remain subdued.He is confident central bank liquidity has come very close to the real economy. And says that credit growth depends on demand, which is likely to remain subdued.
He says non-standard measures are not a contraint on setting interst rates to secure price stability, and said the ECB will use all the tools available to counter upside prices risks if they arise.He says non-standard measures are not a contraint on setting interst rates to secure price stability, and said the ECB will use all the tools available to counter upside prices risks if they arise.
8.07am: Quick look at the markets, which are all slightly higher. Traders woke in a good mood after Apple beat expectations across the board last night.8.07am: Quick look at the markets, which are all slightly higher. Traders woke in a good mood after Apple beat expectations across the board last night.
FTSE 100: up 0.3%, or 18 points, at 5728
France's CAC 40: up 0.2%
Spain's IBEX: up 0.7%
Italy's FTSE MIB: up 0.5%
Germany's DAX: up 0.5%		FTSE 100: up 0.3%, or 18 points, at 5728
France's CAC 40: up 0.2%
Spain's IBEX: up 0.7%
Italy's FTSE MIB: up 0.5%
Germany's DAX: up 0.5%
8.05am: We've got some analyst comment about the upcoming GDP figures from the UK. Michelle Girard, Omair Sharif & Guy Berger of RBS expect a drop in GDP:8.05am: We've got some analyst comment about the upcoming GDP figures from the UK. Michelle Girard, Omair Sharif & Guy Berger of RBS expect a drop in GDP:
Overall, we forecast the preliminary Q1 GDP estimate to show a fall of 0.1% q/q, +0.2% y/y. This seems artificially low – dragged down by implausibly weak construction output data and the inherently volatile energy sector. For reference, GDP ex-construction looks set to rise by around 0.5% q/q and this is a better indicator of the underlying state of the economyOverall, we forecast the preliminary Q1 GDP estimate to show a fall of 0.1% q/q, +0.2% y/y. This seems artificially low – dragged down by implausibly weak construction output data and the inherently volatile energy sector. For reference, GDP ex-construction looks set to rise by around 0.5% q/q and this is a better indicator of the underlying state of the economy
Michael Hewson of CMC Markets is more upbeat:Michael Hewson of CMC Markets is more upbeat:
Given that every single sector of the economy has seen robust PMI data in January, February and March it would be somewhat of a surprise if the data were to disappoint, whatever MPC member David Miles suggested yesterday about the risks of a small contraction, due to weak demand in the economy.Given that every single sector of the economy has seen robust PMI data in January, February and March it would be somewhat of a surprise if the data were to disappoint, whatever MPC member David Miles suggested yesterday about the risks of a small contraction, due to weak demand in the economy.
Expectations vary as to the figure that markets are looking for, but anything between 0.1% and 0.3% is likely to see a fairly muted reaction in line with expectations. Zero growth or a negative number could well see a sharp sterling sell off after the gains of recent weeks.Expectations vary as to the figure that markets are looking for, but anything between 0.1% and 0.3% is likely to see a fairly muted reaction in line with expectations. Zero growth or a negative number could well see a sharp sterling sell off after the gains of recent weeks.
7.45am: There was a spate of gloomy corporate news out of Europe this morning. My colleague Julia Kollewe has this report.7.45am: There was a spate of gloomy corporate news out of Europe this morning. My colleague Julia Kollewe has this report.
Siemens, Germany's biggest company, has warned on annual profits after incurring charges related to delayed offshore wind projects. It has slashed its estimate for profits this year to €5.2-€5.4bn, from €6bn.Siemens, Germany's biggest company, has warned on annual profits after incurring charges related to delayed offshore wind projects. It has slashed its estimate for profits this year to €5.2-€5.4bn, from €6bn.
Peugeot Citroen blamed the recession-hit markets in southern Europe for a 7% sales slump in the first quarter.Peugeot Citroen blamed the recession-hit markets in southern Europe for a 7% sales slump in the first quarter.
And Spain's second-biggest bank BBVA suffered a 13% drop in first-quarter profits but managed to meet solvency targets set by European regulators - without selling core assets or chipping into its dividend.And Spain's second-biggest bank BBVA suffered a 13% drop in first-quarter profits but managed to meet solvency targets set by European regulators - without selling core assets or chipping into its dividend.
7.43am: Here's today's agenda.7.43am: Here's today's agenda.
• ECB preisdent Draghi appears at European Parliament: 8am BST
• Bundesbank board member Dombret speaks: 8.25am BST
• ECB publishes euro area bank lending survey: 9am BST
• UK preliminary GDP for Q1 2012: 9.30am BST
• ECB annual report presented to European Parliament: 10.15am BST
• UK CBI trends for April: 11am BST
• US durable goods orders for March: 1.30pm BST
• MEPs vote on financial transaction tax: 3pm BST
• US interest rate decision: 5.30pm BST
• Fed chairman Bernanke holds press conference: 7.15pm BST		• ECB preisdent Draghi appears at European Parliament: 8am BST
• Bundesbank board member Dombret speaks: 8.25am BST
• ECB publishes euro area bank lending survey: 9am BST
• UK preliminary GDP for Q1 2012: 9.30am BST
• ECB annual report presented to European Parliament: 10.15am BST
• UK CBI trends for April: 11am BST
• US durable goods orders for March: 1.30pm BST
• MEPs vote on financial transaction tax: 3pm BST
• US interest rate decision: 5.30pm BST
• Fed chairman Bernanke holds press conference: 7.15pm BST
In the debt markets, Germany is auctioning €3bn of 32-year Bunds, maturing in 2044.In the debt markets, Germany is auctioning €3bn of 32-year Bunds, maturing in 2044.
7.18am: Good morning and welcome to today's rolling coverage of the eurozone financial crisis.7.18am: Good morning and welcome to today's rolling coverage of the eurozone financial crisis.
The big news this morning will be the UK's GDP figure, which will tell us if we've fallen into a double-dip recession or not. The economy shrank by 0.3% in the last quarter of 2011, so a second quarter of contraction would signal we are back in recession.The big news this morning will be the UK's GDP figure, which will tell us if we've fallen into a double-dip recession or not. The economy shrank by 0.3% in the last quarter of 2011, so a second quarter of contraction would signal we are back in recession.
The consensus view is that that's not going to happen, with the average forecast for 0.1% growth, but the economists have been wrong before. (The sweepstake in the newsroom ranges from -0.3 to +0.3). We'll be following the action as it happens, courtesy of my colleague Graeme Wearden, who's heading over to Westminster for the press conference.The consensus view is that that's not going to happen, with the average forecast for 0.1% growth, but the economists have been wrong before. (The sweepstake in the newsroom ranges from -0.3 to +0.3). We'll be following the action as it happens, courtesy of my colleague Graeme Wearden, who's heading over to Westminster for the press conference.
In the eurozone, Mario Draghi, president of the ECB, is appearing before the European Parliament to explain the central bank's policy stance. MEPs are voting on the introduction of a financial transaction tax. And the German government will publish its twice-yearly economic forecasts.In the eurozone, Mario Draghi, president of the ECB, is appearing before the European Parliament to explain the central bank's policy stance. MEPs are voting on the introduction of a financial transaction tax. And the German government will publish its twice-yearly economic forecasts.