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Greece hands over list of proposed reforms to eurozone creditors - live updates Greece hands over list of proposed reforms to eurozone creditors - live updates
(35 minutes later)
5.11pm GMT17:11
Back with Greece, and it appears the brinkmanship continues:
The Greek Government has raised the stakes: #Greece to stop payments if reforms are rejected, MNI reports citing official.
5.03pm GMT17:03
S&P said:
Although its economic prospects remain uncertain, Cyprus’ budgetary consolidation has proceeded faster than we anticipated, contributing to a substantial decline in the government debt-to-GDP ratio from 2014, by our estimate.
We now forecast average net general government debt over 2015-2017 for Cyprus at 91.8% of GDP, compared with 103.4% of GDP previously.
The positive outlook reflects the possibility that we could raise our ratings.
4.42pm GMT16:42
And here’s something positive:
S&P ups #Cyprus outlook to positive from stable, affirms rating at B+.
4.37pm GMT16:374.37pm GMT16:37
Despite the discussions set to begin over Greek reforms, that has not stopped talk that the country might have to introduce capital controls:Despite the discussions set to begin over Greek reforms, that has not stopped talk that the country might have to introduce capital controls:
Greece Press talking about capital controls in Greece (Liberation) of capital controls either tonight, or April 10thGreece Press talking about capital controls in Greece (Liberation) of capital controls either tonight, or April 10th
Although not the Greek press in fact, it appears: Although not the Greek press as it happens:
The source of the Greece captial control rumour is Jean Quatremer - Brussels correspondent at Liberation.frThe source of the Greece captial control rumour is Jean Quatremer - Brussels correspondent at Liberation.fr
Updated at 4.41pm GMT
4.18pm GMT16:184.18pm GMT16:18
The European Central Bank considers Greek banks to be solvent, according to the head of its supervisory arm Daniele Nouy, Reuters is reporting.The European Central Bank considers Greek banks to be solvent, according to the head of its supervisory arm Daniele Nouy, Reuters is reporting.
4.17pm GMT16:174.17pm GMT16:17
Greek reform list is ready, SYRIZA parliamentary spokesman Nikos Filis tells @dpa. Apparently it includes 18 proposals. #GreeceGreek reform list is ready, SYRIZA parliamentary spokesman Nikos Filis tells @dpa. Apparently it includes 18 proposals. #Greece
3.43pm GMT15:433.43pm GMT15:43
And more details on the reforms themselves from Reuters:And more details on the reforms themselves from Reuters:
Greece’s government has included measures to boost state revenues by €3bn this year as part of a list of reforms it is sending European creditors in the hope of unlocking aid, a government official said on Friday.Greece’s government has included measures to boost state revenues by €3bn this year as part of a list of reforms it is sending European creditors in the hope of unlocking aid, a government official said on Friday.
The official said Athens’s EU and IMF creditors, known as the Brussels group, will start discussing the list of Athens’s proposed reforms on Saturday.The official said Athens’s EU and IMF creditors, known as the Brussels group, will start discussing the list of Athens’s proposed reforms on Saturday.
“The actions proposed through the reforms list foresee revenues of €3bn for 2015 which will under no circumstances will come from wage or pension cuts,” the official said. “The list does not include recessionary measures.”“The actions proposed through the reforms list foresee revenues of €3bn for 2015 which will under no circumstances will come from wage or pension cuts,” the official said. “The list does not include recessionary measures.”
The list estimates a primary budget surplus of 1.5% for 2015 - below the 3% target included in the country’s existing EU/IMF bailout - and growth of 1.4%, the official said.The list estimates a primary budget surplus of 1.5% for 2015 - below the 3% target included in the country’s existing EU/IMF bailout - and growth of 1.4%, the official said.
#Greece's reform list estimates 2015 GDP growth at 1.4% above BBG weighted avg of 0.96%. pic.twitter.com/ftGRPN5oY0#Greece's reform list estimates 2015 GDP growth at 1.4% above BBG weighted avg of 0.96%. pic.twitter.com/ftGRPN5oY0
3.41pm GMT15:413.41pm GMT15:41
Meanwhile here is Reuter’s take on the next steps for Greece now the reform list has been sent:Meanwhile here is Reuter’s take on the next steps for Greece now the reform list has been sent:
Greece and the institutions representing its official creditors will start discussions on a list of economic reforms submitted by Athens on Friday evening, a euro zone official said.Greece and the institutions representing its official creditors will start discussions on a list of economic reforms submitted by Athens on Friday evening, a euro zone official said.
Asked to confirm that Athens had sent a list with reform proposals to representatives of the European Central Bank, the International Monetary Fund, the European Commission and the euro zone bailout fund ESM, the official said:Asked to confirm that Athens had sent a list with reform proposals to representatives of the European Central Bank, the International Monetary Fund, the European Commission and the euro zone bailout fund ESM, the official said:
“Yes, they did. And tonight the talks between the Greek government and the institutions will start.”“Yes, they did. And tonight the talks between the Greek government and the institutions will start.”
Greece Sees 2015 GDP +1.4% Vs +2.5% EU Estimate -Govt OfficialGreece Sees 2015 GDP +1.4% Vs +2.5% EU Estimate -Govt Official
3.33pm GMT15:333.33pm GMT15:33
Varoufakis says resignation talk is "amusing"Varoufakis says resignation talk is "amusing"
And here’s a response to the rumours of Yanis Varoufakis’s resignation as Greek finance minister (see earlier) from the man himself:And here’s a response to the rumours of Yanis Varoufakis’s resignation as Greek finance minister (see earlier) from the man himself:
Every time the negotiations heat up, some new rumour of my resignation, demise etc. springs up. Somewhat amusing...Every time the negotiations heat up, some new rumour of my resignation, demise etc. springs up. Somewhat amusing...
Updated at 3.38pm GMTUpdated at 3.38pm GMT
3.26pm GMT15:263.26pm GMT15:26
Updated at 3.26pm GMTUpdated at 3.26pm GMT
3.25pm GMT15:253.25pm GMT15:25
Greece sends list of reforms to lendersGreece sends list of reforms to lenders
Seems Greece has now sent the list of reforms, and here are some Reuters snaps on the contents:Seems Greece has now sent the list of reforms, and here are some Reuters snaps on the contents:
Updated at 4.15pm GMTUpdated at 4.15pm GMT
3.11pm GMT15:113.11pm GMT15:11
Greece is set to send its long awaited list of reforms to its eurozone and IMF lenders later today.Greece is set to send its long awaited list of reforms to its eurozone and IMF lenders later today.
The list needs to be approved before Athens is given a new tranche of aid to avert a financial crisis. It is expected to include measures to improve investor sentiment, boost tax revenues and judicial reform, according to Reuters, but there is little further detail yet.The list needs to be approved before Athens is given a new tranche of aid to avert a financial crisis. It is expected to include measures to improve investor sentiment, boost tax revenues and judicial reform, according to Reuters, but there is little further detail yet.
And up until now, reforms proposed by the Greek government under Alexis Tsipras, have not been detailed enough to pass muster.And up until now, reforms proposed by the Greek government under Alexis Tsipras, have not been detailed enough to pass muster.
And Euclid Tsakalotos, minister for international economic affairs, said Greece wanted a positive outcome but warned of a clash with its creditors if the list of reforms was not accepted. He said (from Reuters):And Euclid Tsakalotos, minister for international economic affairs, said Greece wanted a positive outcome but warned of a clash with its creditors if the list of reforms was not accepted. He said (from Reuters):
We support the people that have lost a lot as a result of the crisis and we are prepared, if things do not go well, for a clash...We support the people that have lost a lot as a result of the crisis and we are prepared, if things do not go well, for a clash...
They [our partners] must know that we are prepared for a falling out, otherwise you don’t negotiate.They [our partners] must know that we are prepared for a falling out, otherwise you don’t negotiate.
Updated at 3.12pm GMTUpdated at 3.12pm GMT
2.14pm GMT14:142.14pm GMT14:14
The University of Michigan’s consumer sentiment index picked was revised up for March to 93 in March from an earlier 91.2.The University of Michigan’s consumer sentiment index picked was revised up for March to 93 in March from an earlier 91.2.
Economists were forecasting a smaller improvement to 92.Economists were forecasting a smaller improvement to 92.
Despite the upward revision, consumers were less upbeat in March than they were in February, when the index was 95.4.Despite the upward revision, consumers were less upbeat in March than they were in February, when the index was 95.4.
Richard Curtin, an economist working on the survey at the university:Richard Curtin, an economist working on the survey at the university:
The harsh winter weather and the small rebound in gas prices caused some slippage in consumer confidence since the start of the year. Importantly, most of the recent variation was among lower income households, whose budgets are more sensitive to higher utility costs and disruptions in work hours.The harsh winter weather and the small rebound in gas prices caused some slippage in consumer confidence since the start of the year. Importantly, most of the recent variation was among lower income households, whose budgets are more sensitive to higher utility costs and disruptions in work hours.
Households with incomes in the middle and top thirds of the distribution, in contrast, recorded gains in confidence in the March survey. Expanding job opportunities as well as more favorable wage gains have meant that consumer spending will rebound during the balance of the year.Households with incomes in the middle and top thirds of the distribution, in contrast, recorded gains in confidence in the March survey. Expanding job opportunities as well as more favorable wage gains have meant that consumer spending will rebound during the balance of the year.
While there is a widespread expectation that interest rates will begin to rise later in the year, few consumers anticipated that the size of the increases will dampen their credit sensitive purchase plans.While there is a widespread expectation that interest rates will begin to rise later in the year, few consumers anticipated that the size of the increases will dampen their credit sensitive purchase plans.
2.03pm GMT14:032.03pm GMT14:03
Breaking: US consumer sentiment beats expectationsBreaking: US consumer sentiment beats expectations
1.58pm GMT13:581.58pm GMT13:58
Oil prices have fallen further...Oil prices have fallen further...
Brent crude is down more than a cent or 2.5% at $57.72 a barrel.Brent crude is down more than a cent or 2.5% at $57.72 a barrel.
It hasn’t reversed all of Thursday’s decline though, after prices 4% over fears that fighting Saudi air strikes in Yemen would lead to a broader crisis in the Middle East.It hasn’t reversed all of Thursday’s decline though, after prices 4% over fears that fighting Saudi air strikes in Yemen would lead to a broader crisis in the Middle East.
1.49pm GMT13:491.49pm GMT13:49
The Wall Street Journal is reporting that workers at the European Central Bank are suffering from stress because of understaffing.The Wall Street Journal is reporting that workers at the European Central Bank are suffering from stress because of understaffing.
Almost 5% of workers who responded to a staff survey “have reported having suicidal thoughts and/or hurting themselves,” according to a letter sent by the IPSO union to the 19 national central bank governors on the ECB’s governing council, and seen by the WSJ.Almost 5% of workers who responded to a staff survey “have reported having suicidal thoughts and/or hurting themselves,” according to a letter sent by the IPSO union to the 19 national central bank governors on the ECB’s governing council, and seen by the WSJ.
Here is an extract from the story:Here is an extract from the story:
The union that represents workers at the European Central Bank has said that acute understaffing at the institution is leading to employee burnout.The union that represents workers at the European Central Bank has said that acute understaffing at the institution is leading to employee burnout.
In a letter to the 19 national central bank governors on the ECB’s governing council and seen by The Wall Street Journal, the IPSO union claims that nearly one-third of the central bank’s staff is “at risk of burnout.”In a letter to the 19 national central bank governors on the ECB’s governing council and seen by The Wall Street Journal, the IPSO union claims that nearly one-third of the central bank’s staff is “at risk of burnout.”
Nearly 5% of respondents to a staff survey “have reported having suicidal thoughts and/or hurting themselves,” according to the letter. The burnout level is probably about twice the normal level in the general population, the union said.Nearly 5% of respondents to a staff survey “have reported having suicidal thoughts and/or hurting themselves,” according to the letter. The burnout level is probably about twice the normal level in the general population, the union said.
The ECB declined to comment on Friday.The ECB declined to comment on Friday.
The data come from a survey of a little more than 900 staff carried out by a consulting firm on behalf of the workers’ council at the ECB. The ECB employed 2,344 employees on either permanent or fixed-term contracts as of the end of last year.The data come from a survey of a little more than 900 staff carried out by a consulting firm on behalf of the workers’ council at the ECB. The ECB employed 2,344 employees on either permanent or fixed-term contracts as of the end of last year.
The letter said that the ECB hadn’t adequately staffed its new role as the eurozone’s banking supervisor, which is leading to a steady stream of frustration from both bank employees and managers.The letter said that the ECB hadn’t adequately staffed its new role as the eurozone’s banking supervisor, which is leading to a steady stream of frustration from both bank employees and managers.
The union “denounce[s] with the utmost vigour, the situation of serious understaffing and excessive work pressure within the [ECB bank supervisor]; a situation that results in a constant flow of complaints from staff and management alike.”The union “denounce[s] with the utmost vigour, the situation of serious understaffing and excessive work pressure within the [ECB bank supervisor]; a situation that results in a constant flow of complaints from staff and management alike.”
Did you know the ECB had a trade union? It's getting upset about worker burnout. Read more here, by yours truly: http://t.co/TCyni5VvtKDid you know the ECB had a trade union? It's getting upset about worker burnout. Read more here, by yours truly: http://t.co/TCyni5VvtK
Updated at 1.50pm GMTUpdated at 1.50pm GMT
1.38pm GMT13:381.38pm GMT13:38
Wall Street inches higherWall Street inches higher
US stock markets have opened roughly flat.US stock markets have opened roughly flat.
1.24pm GMT13:241.24pm GMT13:24
Wolfgang Schäuble, Germany’s finance minister, has been speaking at the Bundesbank conference in Frankfurt.Wolfgang Schäuble, Germany’s finance minister, has been speaking at the Bundesbank conference in Frankfurt.
In my view, expansionary monetary policy and high leverage are not the solution but the main causes of the financial and debt crises of recent years.In my view, expansionary monetary policy and high leverage are not the solution but the main causes of the financial and debt crises of recent years.
Probably not a fan of the European Central Bank’s €1.1 trillion quantitative easing programme then...Probably not a fan of the European Central Bank’s €1.1 trillion quantitative easing programme then...
12.53pm GMT12:5312.53pm GMT12:53
US Commerce Department figures showing annual growth of 2.2% in the fourth quarter of 2014 confirm a slowdown compared with the third quarter, when GDP increased by 5%.US Commerce Department figures showing annual growth of 2.2% in the fourth quarter of 2014 confirm a slowdown compared with the third quarter, when GDP increased by 5%.
The department said in a statement:The department said in a statement:
The deceleration in real GDP growth in the fourth quarter primarily reflected an upturn in imports, a downturn in federal government spending, a deceleration in nonresidential fixed investment, and a larger decrease in private inventory investment that were partly offset by accelerations in PCE [personal consumption expenditures] and in state and local government spending.The deceleration in real GDP growth in the fourth quarter primarily reflected an upturn in imports, a downturn in federal government spending, a deceleration in nonresidential fixed investment, and a larger decrease in private inventory investment that were partly offset by accelerations in PCE [personal consumption expenditures] and in state and local government spending.
$USDJPY drops to 119.00 on weak US GDP http://t.co/EEIM4wj8x5$USDJPY drops to 119.00 on weak US GDP http://t.co/EEIM4wj8x5
12.31pm GMT12:3112.31pm GMT12:31
US Q4 growth is unrevised at 2.2%US Q4 growth is unrevised at 2.2%
Breaking: US annual growth for the fourth quarter has been left unrevised at 2.2%, disappointing expectations of an upward revision to 2.4%.Breaking: US annual growth for the fourth quarter has been left unrevised at 2.2%, disappointing expectations of an upward revision to 2.4%.
Updated at 12.42pm GMTUpdated at 12.42pm GMT
12.20pm GMT12:2012.20pm GMT12:20
Revised figures for US fourth-quarter growth will be published at 12.30 UK time.Revised figures for US fourth-quarter growth will be published at 12.30 UK time.
Economists polled by Reuters expect annual growth to be revised up to 2.4% from a previous estimate, driven higher by consumer spending.Economists polled by Reuters expect annual growth to be revised up to 2.4% from a previous estimate, driven higher by consumer spending.
11.53am GMT11:5311.53am GMT11:53
Germany has no details yet about the latest plans for Greek reforms, a spokeswoman for the German finance ministry said.Germany has no details yet about the latest plans for Greek reforms, a spokeswoman for the German finance ministry said.
Marianne Kothe:Marianne Kothe:
We have had no concrete information presented to us.We have had no concrete information presented to us.
She added eurozone finance ministers would only meet once documents had been presented to them.She added eurozone finance ministers would only meet once documents had been presented to them.
11.26am GMT11:2611.26am GMT11:26
Reuters has filed a fuller report on the earlier speculation that Yanis Varoufakis is planning to quit the Greek government (which has been denied by officials)Reuters has filed a fuller report on the earlier speculation that Yanis Varoufakis is planning to quit the Greek government (which has been denied by officials)
Greece’s outspoken Finance Minister Yanis Varoufakis is not planning to resign, two Greek government officials said on Friday, denying a report in Germany’s Bild newspaper.Greece’s outspoken Finance Minister Yanis Varoufakis is not planning to resign, two Greek government officials said on Friday, denying a report in Germany’s Bild newspaper.
“None of this is true, it’s far from reality,” one of the officials told Reuters.“None of this is true, it’s far from reality,” one of the officials told Reuters.
Bild’s online version on Friday cited a Greek government source as saying it was only a matter of time before Varoufakis resigned, adding that such a decision had already been made.Bild’s online version on Friday cited a Greek government source as saying it was only a matter of time before Varoufakis resigned, adding that such a decision had already been made.
A prominent figure in the Greek government who made a habit of being interviewed frequently and making a media splash with sharp-tongued attacks against austerity, Varoufakis has kept a markedly lower profile in recent days.A prominent figure in the Greek government who made a habit of being interviewed frequently and making a media splash with sharp-tongued attacks against austerity, Varoufakis has kept a markedly lower profile in recent days.
After a celebrity photo shoot with his wife for Paris Match magazine angered officials from the ruling Syriza party, Varoufakis has appeared on fewer television shows and reduced the number of interviews he gives.After a celebrity photo shoot with his wife for Paris Match magazine angered officials from the ruling Syriza party, Varoufakis has appeared on fewer television shows and reduced the number of interviews he gives.
He also cancelled an appearance at a London conference last week and was notably absent when Prime Minister Alexis Tsipras travelled to Brussels and then Berlin for crucial talks on Greece’s efforts to secure financial aid to keep afloat.He also cancelled an appearance at a London conference last week and was notably absent when Prime Minister Alexis Tsipras travelled to Brussels and then Berlin for crucial talks on Greece’s efforts to secure financial aid to keep afloat.
The 53-year-old academic economist had never held a political position until Tsipras tapped him to become finance minister in January. His unabashed criticism of a hated bailout programme and his casual, untucked shirt and tie-less style has since given him rock star status in Greece.The 53-year-old academic economist had never held a political position until Tsipras tapped him to become finance minister in January. His unabashed criticism of a hated bailout programme and his casual, untucked shirt and tie-less style has since given him rock star status in Greece.
But he has also alienated many of his euro zone peers and has been involved in a public war of words with his powerful German counterpart, Wolfgang Schaeuble, raising concerns about whether he was hampering rather than helping talks to secure aid.But he has also alienated many of his euro zone peers and has been involved in a public war of words with his powerful German counterpart, Wolfgang Schaeuble, raising concerns about whether he was hampering rather than helping talks to secure aid.
11.15am GMT11:1511.15am GMT11:15
Austria: crisis of confidence in GreeceAustria: crisis of confidence in Greece
Austrian Finance Minister Hans Joerg Schelling has said eurozone finances ministers are struggling to have faith in Greece amid chaotic decision-making.Austrian Finance Minister Hans Joerg Schelling has said eurozone finances ministers are struggling to have faith in Greece amid chaotic decision-making.
He told reporters in Vienna:He told reporters in Vienna:
We have a crisis of confidence with Greece. Something is decided every day and on the next day it doesn’t apply any more.We have a crisis of confidence with Greece. Something is decided every day and on the next day it doesn’t apply any more.
Commenting on the possibility of a debt haircut for Greece, he added:Commenting on the possibility of a debt haircut for Greece, he added:
You can easily calculate this: it brings nothing. [The Greek problem] will occupy us for some time. I don’t know what will emerge.You can easily calculate this: it brings nothing. [The Greek problem] will occupy us for some time. I don’t know what will emerge.
He said a haircut would not ease Greece’s budget problems and was no solution to its fiscal woes.He said a haircut would not ease Greece’s budget problems and was no solution to its fiscal woes.
The Greek government is expected to produce detailed economic reform proposals on Monday. The challenge is to convince its lenders that it is acting responsibly, and therefore deserves another tranche of funding before the money really does run out.The Greek government is expected to produce detailed economic reform proposals on Monday. The challenge is to convince its lenders that it is acting responsibly, and therefore deserves another tranche of funding before the money really does run out.
Updated at 11.15am GMTUpdated at 11.15am GMT
10.39am GMT10:3910.39am GMT10:39
Greek government official: Varoufakis is NOT resigningGreek government official: Varoufakis is NOT resigning
A Greek government official has denied reports that finance minister Yanis Varoufakis is planning to resign.A Greek government official has denied reports that finance minister Yanis Varoufakis is planning to resign.
An official told Reuters:An official told Reuters:
None of this is true, it’s far from reality.None of this is true, it’s far from reality.
Greek govt denies speculation on #Varoufakis' resignationGreek govt denies speculation on #Varoufakis' resignation
Updated at 10.41am GMTUpdated at 10.41am GMT
10.28am GMT10:2810.28am GMT10:28
Twitter rumour: Greece’s finance minister Yanis Varoufakis is considering resignation.Twitter rumour: Greece’s finance minister Yanis Varoufakis is considering resignation.
We stress this is a rumour, which appears to have originated in Germany paper Bild.We stress this is a rumour, which appears to have originated in Germany paper Bild.
Bild reports #varoufakis pondering resignation - feels like Oskar "champagne socialist" Lafontaine all over again http://t.co/9fFDW00VWUBild reports #varoufakis pondering resignation - feels like Oskar "champagne socialist" Lafontaine all over again http://t.co/9fFDW00VWU
Not clear how credible rumours of #Varoufakis resigning are, Bild quotes unnamed Greek govt insider saying "matter of time" & "done deal"Not clear how credible rumours of #Varoufakis resigning are, Bild quotes unnamed Greek govt insider saying "matter of time" & "done deal"
9.56am GMT09:569.56am GMT09:56
Pound rises on Carney rate commentPound rises on Carney rate comment
The briefest of comments from Mark Carney on interest rates has pushed the pound up against the dollar.The briefest of comments from Mark Carney on interest rates has pushed the pound up against the dollar.
The pound rose to $1.4860 from around $1.4818 after the Bank of England’s governor said the next move in rates would be up.The pound rose to $1.4860 from around $1.4818 after the Bank of England’s governor said the next move in rates would be up.
$GBPUSD moving up & further away from $1.48 on those Carney comments.$GBPUSD moving up & further away from $1.48 on those Carney comments.
#Carney says next move in rates is likely up. > Saying the obvious but pours cold water on MPC attempts to convince rate cut possible #GBP#Carney says next move in rates is likely up. > Saying the obvious but pours cold water on MPC attempts to convince rate cut possible #GBP
Carney reiterates next interest rate move is upCarney reiterates next interest rate move is up
Updated at 9.59am GMTUpdated at 9.59am GMT
9.47am GMT09:479.47am GMT09:47
It seems BoE's Haldane hasn't convinced Broadbent of the argument for cutting either. No support from any of the 5 MPC spkrs this week.It seems BoE's Haldane hasn't convinced Broadbent of the argument for cutting either. No support from any of the 5 MPC spkrs this week.
For full write-up of Broadbent's speech on low deflation risk to UK, see here http://t.co/nE2CWpdIYd @ReutersFor full write-up of Broadbent's speech on low deflation risk to UK, see here http://t.co/nE2CWpdIYd @Reuters
9.45am GMT09:459.45am GMT09:45
Back in Frankfurt, the Bank of England’s governor Mark Carney, is reinforcing the point that UK households should prepare for a rise in interest rates (despite Andy Haldane’s comments).Back in Frankfurt, the Bank of England’s governor Mark Carney, is reinforcing the point that UK households should prepare for a rise in interest rates (despite Andy Haldane’s comments).
The next move in interest rates is likely up.The next move in interest rates is likely up.
9.41am GMT09:419.41am GMT09:41
Bank of England's Broadbent: little risk of UK deflationBank of England's Broadbent: little risk of UK deflation
Ben Broadbent, deputy governor of the Bank of England and a member of its interest-rate setting Monetary Policy Committee, has waded into the UK deflation debate.Ben Broadbent, deputy governor of the Bank of England and a member of its interest-rate setting Monetary Policy Committee, has waded into the UK deflation debate.
Broadbent has become the latest in a string of MPC members to argue that the risk of a dangerous, protracted spell of UK deflation is low. Instead - the argument goes - UK inflation will begin to pick up again and the next move in rates will be up, not down.Broadbent has become the latest in a string of MPC members to argue that the risk of a dangerous, protracted spell of UK deflation is low. Instead - the argument goes - UK inflation will begin to pick up again and the next move in rates will be up, not down.
UK inflation is at a record low of zero, and expected to turn negative in the coming months as falling food and petrol prices, as well as lower energy bills, feed through.UK inflation is at a record low of zero, and expected to turn negative in the coming months as falling food and petrol prices, as well as lower energy bills, feed through.
Divisions have emerged at the very top of the Bank over what this might mean in the coming months. MPC members Mark Carney, Minouche Shafik, Kristin Forbes, David Miles and now Broadbent have played down the prospect of another rate cut.Divisions have emerged at the very top of the Bank over what this might mean in the coming months. MPC members Mark Carney, Minouche Shafik, Kristin Forbes, David Miles and now Broadbent have played down the prospect of another rate cut.
Their interventions followed a warning last week by Andy Haldane, the Bank’s chief economist and fellow MPC member, who suggested the risk of a deflationary spiral was being underestimated by the Bank. As such, he said, the next move in rates could be down. Rates are already at an all-time low of 0.5%.Their interventions followed a warning last week by Andy Haldane, the Bank’s chief economist and fellow MPC member, who suggested the risk of a deflationary spiral was being underestimated by the Bank. As such, he said, the next move in rates could be down. Rates are already at an all-time low of 0.5%.
Speaking at Imperial College Business School in London on Friday, Broadbent said low inflation in the UK at the moment was the “good” kind, not the dangerous kind.Speaking at Imperial College Business School in London on Friday, Broadbent said low inflation in the UK at the moment was the “good” kind, not the dangerous kind.
Real interest rates still need to be low. Our inflation target is 2% not zero: what makes the current position “good” is not low inflation per se but the fact that, in this particular instance, it’s been caused by something (a drop in oil prices) that improves real incomes.Real interest rates still need to be low. Our inflation target is 2% not zero: what makes the current position “good” is not low inflation per se but the fact that, in this particular instance, it’s been caused by something (a drop in oil prices) that improves real incomes.
Even though the direct effect of that decline will drop out of the annual comparison later this year and in early 2016, there’s a risk that, by depressing wage growth, sub-target inflation could persist for longer than we expect.Even though the direct effect of that decline will drop out of the annual comparison later this year and in early 2016, there’s a risk that, by depressing wage growth, sub-target inflation could persist for longer than we expect.
My own view, however, is that the likelihood of a broad and protracted deflation, afflicting wages as well as prices, is pretty low.My own view, however, is that the likelihood of a broad and protracted deflation, afflicting wages as well as prices, is pretty low.
My guess is that, with the financial system improving, and signs that the worst fears about the global economy may be subsiding, the neutral real interest rate is more likely to rise than fall over the next couple of years.My guess is that, with the financial system improving, and signs that the worst fears about the global economy may be subsiding, the neutral real interest rate is more likely to rise than fall over the next couple of years.
Over that period, headline inflation will get a sizeable kick upwards, once the falls in food and energy prices drop out of the annual comparison.Over that period, headline inflation will get a sizeable kick upwards, once the falls in food and energy prices drop out of the annual comparison.
In the meantime, the UK labour market continues to tighten – low inflation won’t be the only influence on pay growth this year – and the boost imparted by lower commodity prices to real incomes is already apparent in higher consumer spending, here and in other countries too.In the meantime, the UK labour market continues to tighten – low inflation won’t be the only influence on pay growth this year – and the boost imparted by lower commodity prices to real incomes is already apparent in higher consumer spending, here and in other countries too.
Finally, history tells us these episodes are rare – rare, in the case of developed countries with floating exchange rates, almost to the point of uniqueness.Finally, history tells us these episodes are rare – rare, in the case of developed countries with floating exchange rates, almost to the point of uniqueness.
Updated at 9.41am GMTUpdated at 9.41am GMT
9.18am GMT09:189.18am GMT09:18
With his international hat on, as chairman of the Financial Stability Board, Carney is speaking about the quest to end “too big to fail” among global banks. Progress is being made.With his international hat on, as chairman of the Financial Stability Board, Carney is speaking about the quest to end “too big to fail” among global banks. Progress is being made.
It’s imperative that we finish this off this year.It’s imperative that we finish this off this year.
9.13am GMT09:139.13am GMT09:13
Mark Carney’s panel has started.Mark Carney’s panel has started.
He is introduced by the moderator as “a top figure in the financial world”.He is introduced by the moderator as “a top figure in the financial world”.
Carney is asked how concerned he is about high levels of global debt. Using the UK as an an example, he says that the concern is not about households defaulting - “UK households pay their debts” - but about households having to pay out so much to service their debt.Carney is asked how concerned he is about high levels of global debt. Using the UK as an an example, he says that the concern is not about households defaulting - “UK households pay their debts” - but about households having to pay out so much to service their debt.
That’s why we have used macro prudential tools as an insurance policy to limit that.That’s why we have used macro prudential tools as an insurance policy to limit that.
Updated at 9.14am GMTUpdated at 9.14am GMT
8.59am GMT08:598.59am GMT08:59
UK house price growth slowsUK house price growth slows
While we’re waiting for Mark Carney’s panel to start in Frankfurt, an update from the UK’s housing market.While we’re waiting for Mark Carney’s panel to start in Frankfurt, an update from the UK’s housing market.
The annual rate of house price growth slowed for a seventh month in March, to 5.1%. That - according to the Nationwide index - compares with a recent peak of 11.8% in June 2014.The annual rate of house price growth slowed for a seventh month in March, to 5.1%. That - according to the Nationwide index - compares with a recent peak of 11.8% in June 2014.
The average price of a UK home is now 2% above its pre-crisis peak, at £189,454.The average price of a UK home is now 2% above its pre-crisis peak, at £189,454.
Over the month of March, prices rose by 0.1%. The Guardian’s full story is here.Over the month of March, prices rose by 0.1%. The Guardian’s full story is here.
8.50am GMT08:508.50am GMT08:50
European markets riseEuropean markets rise
Following a sell-off in European markets on Thursday, and a 0.95% fall in the Nikkei overnight, investors are a little more upbeat this morning.Following a sell-off in European markets on Thursday, and a 0.95% fall in the Nikkei overnight, investors are a little more upbeat this morning.
The FTSE 100 is down slightly, 0.1% lower at 6,888.62, but markets are up elsewhere.The FTSE 100 is down slightly, 0.1% lower at 6,888.62, but markets are up elsewhere.
8.38am GMT08:388.38am GMT08:38
Mark Carney, Bank of England governor, will be speaking on a panel at the Bundesbank conference from around 8.45am (UK time).Mark Carney, Bank of England governor, will be speaking on a panel at the Bundesbank conference from around 8.45am (UK time).
The live feed is here and we will be following it.The live feed is here and we will be following it.
Wolfgang Schäuble, German finance minister will also be speaking at the conference this afternoon.Wolfgang Schäuble, German finance minister will also be speaking at the conference this afternoon.
8.26am GMT08:268.26am GMT08:26
Germany's Weidmann: eurozone debt in 'danger zone'Germany's Weidmann: eurozone debt in 'danger zone'
Over in Frankfurt, the head of Germany’s central bank and a member of the European Central Bank’s governing council, has been warning on unsustainable debt levels in the eurozone.Over in Frankfurt, the head of Germany’s central bank and a member of the European Central Bank’s governing council, has been warning on unsustainable debt levels in the eurozone.
Speaking at a Bundesbank conference, Jens Weidmann said:Speaking at a Bundesbank conference, Jens Weidmann said:
In the euro area we are already in the danger zone - at least with regard to public debt standing at 91% and corporate debt at 105%. Household debt currently stands at 62%.In the euro area we are already in the danger zone - at least with regard to public debt standing at 91% and corporate debt at 105%. Household debt currently stands at 62%.
Sovereign debt needs to be backed by capital, and exposure to a single sovereign must be capped, just as is the case for any private debtor.Sovereign debt needs to be backed by capital, and exposure to a single sovereign must be capped, just as is the case for any private debtor.
You can read the full speech here.You can read the full speech here.
8.00am GMT08:008.00am GMT08:00
Oil prices fall 1.7%Oil prices fall 1.7%
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.
Oil prices are falling again after the absence of fresh developments in Yemen eased fears of a broader conflict in the Middle East.Oil prices are falling again after the absence of fresh developments in Yemen eased fears of a broader conflict in the Middle East.
Brent crude is down 1.7% at $58.17 this morning, following a 4% jump in Thursday trading.Brent crude is down 1.7% at $58.17 this morning, following a 4% jump in Thursday trading.
Michael Hewson, chief market analyst at CMC Markets UK, says Tuesday’s spike followed patterns we’ve seen before.Michael Hewson, chief market analyst at CMC Markets UK, says Tuesday’s spike followed patterns we’ve seen before.
The spike in oil prices caused by the Saudi military incursions into Yemen, has all the hallmarks of a classic knee jerk market reaction to a new flashpoint.The spike in oil prices caused by the Saudi military incursions into Yemen, has all the hallmarks of a classic knee jerk market reaction to a new flashpoint.
We saw similar spikes last year with Ukraine, Libya and ISIS pushing into Iraq before markets settled back down again, and it is likely that these concerns about Yemen could follow a similar pattern, as long as there is no significant disruption through the straits between the Gulf of Aden and the Red Sea.We saw similar spikes last year with Ukraine, Libya and ISIS pushing into Iraq before markets settled back down again, and it is likely that these concerns about Yemen could follow a similar pattern, as long as there is no significant disruption through the straits between the Gulf of Aden and the Red Sea.
Read our full story on how Saudi-led air strikes on the Yemeni capital, Sana’a, and the southern port city of Aden , affected markets on Thursday.Read our full story on how Saudi-led air strikes on the Yemeni capital, Sana’a, and the southern port city of Aden , affected markets on Thursday.
Updated at 8.07am GMTUpdated at 8.07am GMT