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| UK inflation falls to zero – live updates | |
| (35 minutes later) | |
| 9.47am GMT09:47 | |
| Economists reckon that the UK is now heading into a period of negative inflation: | |
| Inflation at 0%. But it's not so much the level as the trajectory that's striking. #noflation pic.twitter.com/I6eIZuEjLT | |
| Zero inflation in February is lower than the markets expected and virtually guarantees a period of temporary deflation in coming months. | |
| 9.43am GMT09:43 | |
| Inflation: the key charts | |
| This table confirms that food and transport costs dragged inflation down to zero: | |
| And this chart is a reminder that inflation spent most of the last seven years above the official target of 2%, before its recent slide: | |
| Updated at 9.44am GMT | |
| 9.41am GMT09:41 | |
| The last time UK CPI was this low, Lonnie Donegan was number 1 with "My Old Man's a Dustman". March 1960. | |
| 9.39am GMT09:39 | |
| This is the first time on record that the consumer prices index has hit zero, since it was created in 1989. | |
| The ONS suggest that inflation may have been lower in 1960, though, according to Reuters. | |
| 9.38am GMT09:38 | |
| UK food prices fall 3.4% | |
| The drop in inflation was caused by a big drop in food prices, which fell by 3.4% in the year to February. | |
| Motor fuels tumbled by 16.6%, due to the sharp fall in oil prices in recent months. | |
| The Office for National Statistics also attributes the fall to: | |
| “price movements for a range of recreational goods (particularly data processing equipment, books and games, toys & hobbies), food and furniture & furnishings.” | |
| 9.34am GMT09:34 | |
| This is a bigger fall in inflation than expected. | |
| Economists had predicted that the consumer prices index would slide to just 0.1% in February, down from 0.3% in January. But instead, CPI has come in at exactly zero. | |
| 9.30am GMT09:30 | |
| UK inflation falls to 0.0% | |
| Breaking: The UK inflation rate has fallen to zero for the first time on record. | |
| More to follow..... | |
| 9.25am GMT09:25 | |
| France is lagging behind the rest of the eurozone for job creation, and output growth, according to Markit’s new PMI survey. | |
| 9.21am GMT09:21 | |
| Eurozone recovery: what the experts say | |
| Economists are cheering the news that the eurozone private sector is growing at the fastest rate since May 2011: | |
| Strong PMIs in Eurozone and Germany indicate that QE is working. | |
| CHART: Euro-area Q1 #PMI suggest fastest growth in 15 quarters. New orders/stock ratio highlights recovery momentum. pic.twitter.com/npQJaVcz03 | |
| FYI, today's decent #Eurozone #PMI and solid #Germany data point to beneficial combined impact of weaker #oil ,depreciated #Euro & @ECB #QE | |
| 9.12am GMT09:12 | 9.12am GMT09:12 |
| Eurozone private sector growth hits near four-year high | Eurozone private sector growth hits near four-year high |
| The eurozone recovery is alive and well. | The eurozone recovery is alive and well. |
| Firms across the euro are growing much faster than expected this month, according to Markit’s latest survey of the sector. | Firms across the euro are growing much faster than expected this month, according to Markit’s latest survey of the sector. |
| The eurozone composite PMI, just released, smashed expectations by jumping to 54.1 this month, up from 53.6 in February. That’s the highest reading since May 2011, driven by a recovery in the service sector. | The eurozone composite PMI, just released, smashed expectations by jumping to 54.1 this month, up from 53.6 in February. That’s the highest reading since May 2011, driven by a recovery in the service sector. |
| As mentioned earlier in the blog, Germany is growing at its fastest rate for 10 months, while growth in France eased back. | As mentioned earlier in the blog, Germany is growing at its fastest rate for 10 months, while growth in France eased back. |
| But importantly, the rest of the eurozone is enjoying strong growth; new order growth and job creation was both the strongest since mid-2007. | But importantly, the rest of the eurozone is enjoying strong growth; new order growth and job creation was both the strongest since mid-2007. |
| It suggests the eurozone economy is picking up pace, and should get another boost from the European Central Bank’s new quantitative easing programme. | It suggests the eurozone economy is picking up pace, and should get another boost from the European Central Bank’s new quantitative easing programme. |
| Chris Williamson, chief economist at Markit said: | Chris Williamson, chief economist at Markit said: |
| “The eurozone’s economic recovery gained further momentum in March, with the PMI hitting its highest for almost four years. The improvement provides welcome news to a region awaiting signs that the ECB’s quantitative easing is stimulating the real economy. | “The eurozone’s economic recovery gained further momentum in March, with the PMI hitting its highest for almost four years. The improvement provides welcome news to a region awaiting signs that the ECB’s quantitative easing is stimulating the real economy. |
| Deflationary pressures ‘eased’ this month, Williamson says, suggesting the eurozone will avoid a deep deflationary spiral. He adds: | Deflationary pressures ‘eased’ this month, Williamson says, suggesting the eurozone will avoid a deep deflationary spiral. He adds: |
| The survey data therefore indicate that the ECB’s quantitative easing has been started at a time when the eurozone’s economic upturn is already starting to gain traction. This augurs well for the region to enjoy further improvements in business conditions as the year proceeds, helping drive greater business investment and hiring, and thereby ensuring that the recovery becomes sustainable. | The survey data therefore indicate that the ECB’s quantitative easing has been started at a time when the eurozone’s economic upturn is already starting to gain traction. This augurs well for the region to enjoy further improvements in business conditions as the year proceeds, helping drive greater business investment and hiring, and thereby ensuring that the recovery becomes sustainable. |
| Eurozone PMI data better then expected. ThanQE Draghi | Eurozone PMI data better then expected. ThanQE Draghi |
| Updated at 9.14am GMT | Updated at 9.14am GMT |
| 8.43am GMT08:43 | 8.43am GMT08:43 |
| The euro has jumped half a cent against the US dollar on the back of the news that the German economy is accelerating. | The euro has jumped half a cent against the US dollar on the back of the news that the German economy is accelerating. |
| #Euro nudges to fresh day high $1.0998 after upbeat German PMIs. German Mar Composite PMI Flash 55.3 vs 55.0 expected pic.twitter.com/GIdS4b3QyE | #Euro nudges to fresh day high $1.0998 after upbeat German PMIs. German Mar Composite PMI Flash 55.3 vs 55.0 expected pic.twitter.com/GIdS4b3QyE |
| Not that it’s a huge shock. | Not that it’s a huge shock. |
| Very strong German composite PMI. Don't act as you're surprised. | Very strong German composite PMI. Don't act as you're surprised. |
| 8.41am GMT08:41 | 8.41am GMT08:41 |
| Strong economic data from Germany - its private sector is growing at the fastest rate in eight months. | Strong economic data from Germany - its private sector is growing at the fastest rate in eight months. |
| The German composite PMI has risen to 55.3, from 53.8 in February - meaning 23 months of consecutive growth. Manufacturing and services both grew at a faster rate. | The German composite PMI has risen to 55.3, from 53.8 in February - meaning 23 months of consecutive growth. Manufacturing and services both grew at a faster rate. |
| Germany is entering the “domestic fast lane again”, says Markit economist Oliver Kolodseike. | Germany is entering the “domestic fast lane again”, says Markit economist Oliver Kolodseike. |
| The composite #PMI of #Germany rises to 55.3 proving that it's economy is in rude health and does not need #ECB #QE | The composite #PMI of #Germany rises to 55.3 proving that it's economy is in rude health and does not need #ECB #QE |
| Updated at 8.42am GMT | Updated at 8.42am GMT |
| 8.25am GMT08:25 | 8.25am GMT08:25 |
| Hopes that France’s economy was recovering have just taken a knock. | Hopes that France’s economy was recovering have just taken a knock. |
| Markit’s monthly healthcheck of the sector shows that growth in France’s private sector slowed this month. | Markit’s monthly healthcheck of the sector shows that growth in France’s private sector slowed this month. |
| The French composite PMI fell to 51.7 this month, down from 52.2 in February [where any reading over 50 = growth]. Service sector expansion slowed, while factory output continued to fall. | The French composite PMI fell to 51.7 this month, down from 52.2 in February [where any reading over 50 = growth]. Service sector expansion slowed, while factory output continued to fall. |
| The data implies a ‘modest’ rise in GDP this quarter, Markit says. | The data implies a ‘modest’ rise in GDP this quarter, Markit says. |
| CHART: France struggling to catch euro-area recovery wave as March #PMI disappoint. Still, growth accelerated in Q1. pic.twitter.com/IF05nBkTdA | CHART: France struggling to catch euro-area recovery wave as March #PMI disappoint. Still, growth accelerated in Q1. pic.twitter.com/IF05nBkTdA |
| 8.21am GMT08:21 | 8.21am GMT08:21 |
| Soros: 50% chance Greece will quit the euro | Soros: 50% chance Greece will quit the euro |
| Billionaire philanthropist George Soros has declared there’s a 50:50 chance that Greece will leave the eurozone, due to the mistakes of the past. | Billionaire philanthropist George Soros has declared there’s a 50:50 chance that Greece will leave the eurozone, due to the mistakes of the past. |
| Soros made the comments in an interview with Bloomberg, being broadcast later today. | Soros made the comments in an interview with Bloomberg, being broadcast later today. |
| In it, he warned that: | In it, he warned that: |
| “It’s now a lose-lose game and the best that can happen is actually muddling through....Greece is a long-festering problem that was mishandled from the beginning by all parties.” | “It’s now a lose-lose game and the best that can happen is actually muddling through....Greece is a long-festering problem that was mishandled from the beginning by all parties.” |
| The 84-year old, who famously beat the Bank of England on Black Wednesday, also said that the deadlock between Greece and its creditors is hurting its economy badly. As a result, “Greece is going down the drain.” | The 84-year old, who famously beat the Bank of England on Black Wednesday, also said that the deadlock between Greece and its creditors is hurting its economy badly. As a result, “Greece is going down the drain.” |
| More details here: Soros Says Greece Is Now ‘Lose-Lose Game’ After Being Mishandled | More details here: Soros Says Greece Is Now ‘Lose-Lose Game’ After Being Mishandled |
| 8.12am GMT08:12 | 8.12am GMT08:12 |
| Greece’s three-year government bonds are strengthening, a little, on the back of today’s comments from Athens, and from Martin Schulz: | Greece’s three-year government bonds are strengthening, a little, on the back of today’s comments from Athens, and from Martin Schulz: |
| #Greece's yields drop as EU's Schulz sees deal with #eurozone likely this week. http://t.co/8m2gsl6YDh pic.twitter.com/XiXoBTvVdD | #Greece's yields drop as EU's Schulz sees deal with #eurozone likely this week. http://t.co/8m2gsl6YDh pic.twitter.com/XiXoBTvVdD |
| Yields are still very high, around 21%, implying a high risk of default. | Yields are still very high, around 21%, implying a high risk of default. |
| Updated at 8.13am GMT | Updated at 8.13am GMT |
| 8.07am GMT08:07 | 8.07am GMT08:07 |
| Schulz: Deal could come this week | Schulz: Deal could come this week |
| Another optimistic sign - European Parliament chief Martin Schulz has predicted that Greece and its creditors could secure a breakthrough this week. | Another optimistic sign - European Parliament chief Martin Schulz has predicted that Greece and its creditors could secure a breakthrough this week. |
| He told Italy’s La Repubblica that: | He told Italy’s La Repubblica that: |
| “I think by the end of this week a new deal will be reached that should be sufficient to release the most urgent financing,” | “I think by the end of this week a new deal will be reached that should be sufficient to release the most urgent financing,” |
| Greece would then have “not more than three months” to present a “credible, detailed and definitive” plan, Schulz added. | Greece would then have “not more than three months” to present a “credible, detailed and definitive” plan, Schulz added. |
| That makes sense; Greece’s current bailout extension runs until the end of June. | That makes sense; Greece’s current bailout extension runs until the end of June. |
| 7.58am GMT07:58 | 7.58am GMT07:58 |
| Alexis Tsipras is still in Berlin, and due to meet with the leaders of Germany’s opposition Left and Green parties. | Alexis Tsipras is still in Berlin, and due to meet with the leaders of Germany’s opposition Left and Green parties. |
| 7.58am GMT07:58 | 7.58am GMT07:58 |
| Germany’s Deutsche Welle newspaper reports that Angela Merkel and Alexis Tsipras spoke until almost midnight about the situation in Europe, at their ‘working dinner’ | Germany’s Deutsche Welle newspaper reports that Angela Merkel and Alexis Tsipras spoke until almost midnight about the situation in Europe, at their ‘working dinner’ |
| Chancellor Merkel’s spokesman Steffen Seibert told reporters late last night that: | Chancellor Merkel’s spokesman Steffen Seibert told reporters late last night that: |
| “The chancellor and the Greek prime minister had a comprehensive discussion in a good and constructive atmosphere about the situation in Greece, the procedures of the European Union and future German-Greek cooperation,” | “The chancellor and the Greek prime minister had a comprehensive discussion in a good and constructive atmosphere about the situation in Greece, the procedures of the European Union and future German-Greek cooperation,” |
| 7.43am GMT07:43 | 7.43am GMT07:43 |
| Greece: We'll present reform package by Monday | Greece: We'll present reform package by Monday |
| News from Athens: Greece will present a new reform programme to its creditors by next Monday, potentially unlocking bailout funds and averting the risk of bankruptcy. | News from Athens: Greece will present a new reform programme to its creditors by next Monday, potentially unlocking bailout funds and averting the risk of bankruptcy. |
| The news comes less than 12 hours after prime minister Alexis Tsipras and Angela Merkel ended their talks in Berlin. | The news comes less than 12 hours after prime minister Alexis Tsipras and Angela Merkel ended their talks in Berlin. |
| Reuters has the details: | Reuters has the details: |
| Greece will present its proposed package of reforms to its euro zone partners by next Monday in hopes they will release much needed cash, its government spokesman said on Tuesday. | Greece will present its proposed package of reforms to its euro zone partners by next Monday in hopes they will release much needed cash, its government spokesman said on Tuesday. |
| “It will be done at the latest by Monday,” government spokesman Gabriel Sakellaridis told Mega TV. | “It will be done at the latest by Monday,” government spokesman Gabriel Sakellaridis told Mega TV. |
| Greek Prime Minister Alexis Tsipras met with German Chancellor Angela Merkel in Berlin on Monday but it was unclear if they had narrowed differences on economic reforms Athens must implement to win urgently to get fresh aid from its creditors. | Greek Prime Minister Alexis Tsipras met with German Chancellor Angela Merkel in Berlin on Monday but it was unclear if they had narrowed differences on economic reforms Athens must implement to win urgently to get fresh aid from its creditors. |
| Sakellaridis said the package of reforms Athens will propose will not contain recessionary measures but structural changes. | Sakellaridis said the package of reforms Athens will propose will not contain recessionary measures but structural changes. |
| He said Tsipras and Merkel on Monday discussed the outline of the reforms but did not go into depth. | He said Tsipras and Merkel on Monday discussed the outline of the reforms but did not go into depth. |
| “I believe points of convergence were found,” Sakellaridis said. | “I believe points of convergence were found,” Sakellaridis said. |
| Time is short; on April 9th , Greece must repay €467m to the International Monetary Fund. | Time is short; on April 9th , Greece must repay €467m to the International Monetary Fund. |
| If it does convince its creditors next week, then they could unlock some of the €7.2bn bailout tranche which is being withheld. | If it does convince its creditors next week, then they could unlock some of the €7.2bn bailout tranche which is being withheld. |
| This could call for another crunch meeting in Brussels..... | This could call for another crunch meeting in Brussels..... |
| Greece plans present its proposed package of reforms to the eurogroup on Monday. So, see everyone in Brussels for a late night Tuesday? Mon? | Greece plans present its proposed package of reforms to the eurogroup on Monday. So, see everyone in Brussels for a late night Tuesday? Mon? |
| 7.37am GMT07:37 | 7.37am GMT07:37 |
| The Agenda: Greek developments and UK falling inflation | The Agenda: Greek developments and UK falling inflation |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Today we’ll be assessing the situation in Greece after yesterday’s visit by Alexis Tsipras to meet Angela Merkel. | Today we’ll be assessing the situation in Greece after yesterday’s visit by Alexis Tsipras to meet Angela Merkel. |
| The two leaders struck a fairly conciliatory tone during last night’s press conference [even though Tsipras mentioned the war reparations], but there’s no sign yet of a breakthrough deal to unlock fresh funds for Greece. | The two leaders struck a fairly conciliatory tone during last night’s press conference [even though Tsipras mentioned the war reparations], but there’s no sign yet of a breakthrough deal to unlock fresh funds for Greece. |
| In the UK, we get the latest inflation data at 9.30am – and economists reckon it could fall to just 0.1% as low energy costs ripple through the economy. | In the UK, we get the latest inflation data at 9.30am – and economists reckon it could fall to just 0.1% as low energy costs ripple through the economy. |
| On the economic side, the latest PMI surveys are being released this morning (from 8am to 9am GMT) They are expected to show the eurozone’s manufacturing and service sectors continuing to expand this month as the slow recovery continues. | On the economic side, the latest PMI surveys are being released this morning (from 8am to 9am GMT) They are expected to show the eurozone’s manufacturing and service sectors continuing to expand this month as the slow recovery continues. |
| We’ve already had downbeat news from China -- its factory activity has fallen to an 11-month low, suggesting its economy is slowing down. More stimulus could be needed.... | We’ve already had downbeat news from China -- its factory activity has fallen to an 11-month low, suggesting its economy is slowing down. More stimulus could be needed.... |
| China HSBC PMI 49.2 adds to jan/feb soft data. Suggests gdp below 7pct. Ditto Q2, and of course, rate and RRR cuts soon, infra sp later | China HSBC PMI 49.2 adds to jan/feb soft data. Suggests gdp below 7pct. Ditto Q2, and of course, rate and RRR cuts soon, infra sp later |
| European stock markets are expected to dip this morning. | European stock markets are expected to dip this morning. |
| Our European opening calls: $FTSE 7021 down 16 $DAX 11863 down 33 $CAC 5042 down 12 $IBEX 11446 down 7 $MIB 23049 down 8 | Our European opening calls: $FTSE 7021 down 16 $DAX 11863 down 33 $CAC 5042 down 12 $IBEX 11446 down 7 $MIB 23049 down 8 |
| I’ll be tracking all the main events through the day.... | I’ll be tracking all the main events through the day.... |
| Updated at 7.43am GMT | Updated at 7.43am GMT |