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| UK inflation turns negative for first time since 1960 - live updates | UK inflation turns negative for first time since 1960 - live updates |
| (about 1 hour later) | |
| 12.24pm BST12:24 | |
| News is coming through from Berlin that Greek prime minister Alexis Tsipras is likely to meet Angela Merkel on the sidelines of the Riga summit, which starts on Thursday. | |
| A chance to discuss Greece’s ongoing bailout talks, as pressure mounts to reach an agreement. | |
| From Athens, Helena Smith reports: | |
| A spokesman for the chancellor has said no decision will be taken in regards to reforms or debt by the two leaders. Insiders in Athens are saying it is likely they will reconfirm the headway made by technical teams leading negotiations. | |
| Media reports here are suggesting that “a working agreement” has been drawn up and is now the basis of talks which would imply that the two sides are closer to an agreement. | |
| 12.09pm BST12:09 | |
| Let’s turn back to the Greek crisis..... | |
| The European Commission continues to deny that it has drawn up a secret plan to bridge the rift between Athens and its lenders. | |
| Reuters has the story: | |
| Progress in talks between Greece and its creditors on more funding is slow, the European Commission said on Tuesday, denying the existence of a new proposal reported by the Greek press that would give Athens cash on more favourable terms. | |
| Greek newspaper To Vima said on Monday the Commission had prepared a possible compromise, proposing that creditors should accept a lower primary surplus target from Greece in return for tax reform and a hike in sales taxes. | |
| The report lifted the Athens stock market, but the Commission in Brussels and the Greek government both denied any knowledge of such a proposal. | |
| “More time and effort is needed to bridge the gaps on the remaining open issues. We consider that progress is being made albeit at a slow pace,” Commission spokesman Margaritis Schinas told a daily news briefing. | |
| “We cannot confirm any paper of the kind which has been mentioned in the Greek press. We cannot confirm the existence of any such paper and we really don’t know where that story has come from,” he said. | |
| 12.08pm BST12:08 | |
| One last chart.... | |
| #UK inflation since the 1950s, by @ReutersFlasseur pic.twitter.com/oLQ1LhZ55I | |
| 11.56am BST11:56 | |
| Carney: Enjoy low inflation while it lasts.... | |
| Bank of England governor Mark Carney has vowed to get UK inflation back to its 2% target. | |
| He told ITV News: | |
| We expect inflation to be very low for several months. But over the course of the year, towards the end, inflation should start to pick up towards our 2% target. Our job is to ensure that inflation remains low, stable and predictable. | |
| The British people should enjoy this period of very low energy prices, very low food prices....enjoy it while it lasts. We’re going to bring inflation back to that 2% target to keep this economy well functioning, to keep the jobs market growing and to bring income growth up. | |
| Bank of England Governor says Brits should 'enjoy low inflation and low prices while it lasts' http://t.co/dLUjU4D8DT pic.twitter.com/joULR6GbTX | |
| Updated at 11.57am BST | |
| 11.45am BST11:45 | |
| Summary: First negative UK inflation since Macmillan | |
| Time for a recap. | |
| Economists and government ministers have urged Britons not to panic after inflation turned negative for the first time since March 1960. | |
| Cheaper oil and food prices, and a drop in transport costs due to the early Easter, has pushed prices down across the UK. This caused the Consumer Prices Index to drop by 0.1% year-on-year in April. | |
| The Office for National Statistics reported that food prices have fallen by 3.0% over the last year, as supermarket continue to compete hard. The prices of motor fuels fell by 12.3%, as the fall in crude oil prices since last autumn feeds through to consumers. | |
| My colleague Katie Allen has the full story: | |
| Related: UK inflation turns negative | |
| Chancellor George Osborne argued that families should welcome the drop in the cost of living (according to the CPI, anyway). This is not damaging deflation, he insisted. | |
| Instead we should welcome the positive effects that lower food and energy prices bring for households at a time when wages are rising strongly, unemployment is falling and the economy is growing. Of course, we have to remain vigilant to deflationary risks and our system is well equipped to deal with them should they arise. | |
| A raft of City experts have predicted that inflation will soon turn positive again, and squashed talk of a damaging deflationary spiral. Reaction starts here | |
| But union leader Frances O’Grady fears that the data could show trouble ahead; she urged Osborne to resist making new painful cuts to government spending. | |
| Click here for more charts | |
| Updated at 11.45am BST | |
| 11.43am BST11:43 | |
| Deflation, like cholesterol, can apparently come in good and bad flavours. | |
| Ben Southwood, Head of Research at the Adam Smith Institute argues that Britain is enjoying a dose of the good stuff: | |
| “We have deflation—albeit extremely mild deflation of 0.1%—for the first time since the 1960s. But this seems to be ‘good deflation’, coming mainly from cheaper goods – especially from cheaper oil— rather than from a drop in consumer demand. | |
| “Economists worry about deflation, but only the ‘bad’ kind, when prices are sliding at the same time as wages and output. Bad deflation makes debts harder to bear, puts people out of jobs, and can lead to a downward spiral. Good deflation, when wages and output are rising steadily, makes everyone better off. | |
| 11.29am BST11:29 | |
| And here’s Chris Leslie MP, Labour’s Shadow Chancellor, on today’s inflation figures: | |
| “Any relief for households is welcome, but this month’s figures reflect global trends and doesn’t change the reality that many are still struggling to pay the bills. | |
| “The Government must clearly guard against the risk that business investment might be deferred. We need stronger action now to raise productivity to deliver sustainable growth and rising living standards.” | |
| 11.13am BST11:13 | 11.13am BST11:13 |
| Britain isn’t the only country experiencing disinflationary pressures. | Britain isn’t the only country experiencing disinflationary pressures. |
| America’s annual inflation rate fell by 0.1% in March (we get April’s data on Friday). | America’s annual inflation rate fell by 0.1% in March (we get April’s data on Friday). |
| And data this morning showed prices across the eurozone were flat in April, having fallen earlier this year. | And data this morning showed prices across the eurozone were flat in April, having fallen earlier this year. |
| Alastair Winter, chief economist at investment bank Daniel Stewart, fears that global growth is slowing, pushing prices down: | Alastair Winter, chief economist at investment bank Daniel Stewart, fears that global growth is slowing, pushing prices down: |
| There is no doubt the US economy is no longer the world’s locomotive while China is struggling to replace it and Japan and Germany have long since given up. | There is no doubt the US economy is no longer the world’s locomotive while China is struggling to replace it and Japan and Germany have long since given up. |
| Central banks seem to be running out of ideas and there is an increasing disconnect between economic fundamentals and asset prices. There are potentially very dark clouds gathering that could prolong this deflation and make it malign. | Central banks seem to be running out of ideas and there is an increasing disconnect between economic fundamentals and asset prices. There are potentially very dark clouds gathering that could prolong this deflation and make it malign. |
| 11.01am BST11:01 | 11.01am BST11:01 |
| Britain’s inflation rate will soon spring back into positive territory, predicts Martin Beck, senior economic advisor to the EY ITEM Club: | Britain’s inflation rate will soon spring back into positive territory, predicts Martin Beck, senior economic advisor to the EY ITEM Club: |
| “CPI inflation in April recorded its first negative reading since 1960, but this looks likely to be a one-off. | “CPI inflation in April recorded its first negative reading since 1960, but this looks likely to be a one-off. |
| Overall today’s reading may be an interesting piece of trivia, but it will have no tangible impact on the economic outlook beyond offering further evidence that UK consumers are enjoying a substantial boost to their spending power.” | Overall today’s reading may be an interesting piece of trivia, but it will have no tangible impact on the economic outlook beyond offering further evidence that UK consumers are enjoying a substantial boost to their spending power.” |
| 10.52am BST10:52 | 10.52am BST10:52 |
| TUC General Secretary Frances O’Grady does not share George Osborne’s optimism - she urges the chancellor to hold back from fierce cuts in his Budget in July: | TUC General Secretary Frances O’Grady does not share George Osborne’s optimism - she urges the chancellor to hold back from fierce cuts in his Budget in July: |
| “The first period of negative inflation in over half a century could turn out to be the canary in the mine, signalling that there’s something very wrong with the recovery. And with the threat of deflation set to continue, the Chancellor’s plans for extreme cuts risk putting the economy into more serious trouble. | “The first period of negative inflation in over half a century could turn out to be the canary in the mine, signalling that there’s something very wrong with the recovery. And with the threat of deflation set to continue, the Chancellor’s plans for extreme cuts risk putting the economy into more serious trouble. |
| “We need a better plan for growth if we are going to have a recovery built to last with a firm foundation for improving living standards. Stagnating prices are not a sound foundation for the strong and sustained pay rises that workers have been waiting years for.” | “We need a better plan for growth if we are going to have a recovery built to last with a firm foundation for improving living standards. Stagnating prices are not a sound foundation for the strong and sustained pay rises that workers have been waiting years for.” |
| 10.45am BST10:45 | 10.45am BST10:45 |
| Andrew Sentance, senior economic adviser at the accountancy firm PwC, reckons that inflation could be pushed up as British workers gets a long-awaited pay rise. | Andrew Sentance, senior economic adviser at the accountancy firm PwC, reckons that inflation could be pushed up as British workers gets a long-awaited pay rise. |
| “Though prices are slightly down on a year ago according to the CPI, sustained deflation is not on the cards. Once the impact of the big drop in oil prices drops out of the annual inflation rate, it will move back up to 1-2% over the next year or so. With wage inflation picking up we may soon be considering the prospect of above target inflation. | “Though prices are slightly down on a year ago according to the CPI, sustained deflation is not on the cards. Once the impact of the big drop in oil prices drops out of the annual inflation rate, it will move back up to 1-2% over the next year or so. With wage inflation picking up we may soon be considering the prospect of above target inflation. |
| “In the meantime, flat or slightly falling consumer prices are good for growth, boosting real consumer spending power. So a temporary period of slightly negative inflation can be good for the UK economy.” | “In the meantime, flat or slightly falling consumer prices are good for growth, boosting real consumer spending power. So a temporary period of slightly negative inflation can be good for the UK economy.” |
| 10.33am BST10:33 | 10.33am BST10:33 |
| Falling prices means there’s no reason for the Bank of England to raise interest rates soon. | Falling prices means there’s no reason for the Bank of England to raise interest rates soon. |
| Rain Newton-Smith, CBI Director of Economics, reckons borrowing costs will remain at their current record low until 2016: | Rain Newton-Smith, CBI Director of Economics, reckons borrowing costs will remain at their current record low until 2016: |
| “With inflation set to remain below 1 per cent this year, a rise in interest rates anytime soon seems off the cards. Rates are likely to remain low into next year and beyond, continuing to help the domestic recovery.” | “With inflation set to remain below 1 per cent this year, a rise in interest rates anytime soon seems off the cards. Rates are likely to remain low into next year and beyond, continuing to help the domestic recovery.” |
| 10.30am BST10:30 | 10.30am BST10:30 |
| James Sproule, Chief Economist at the Institute of Directors, agrees with George Osborne that Britain hasn’t lurched into a harmful period of deflation: | James Sproule, Chief Economist at the Institute of Directors, agrees with George Osborne that Britain hasn’t lurched into a harmful period of deflation: |
| Falling prices in necessities, such as food and transport, along with a period of sustained job creation and wage growth mean demand and consumption will remain buoyant. | Falling prices in necessities, such as food and transport, along with a period of sustained job creation and wage growth mean demand and consumption will remain buoyant. |
| “Deflation can be a chronic problem where it represents a lack of consumer confidence and an unwillingness to spend. This danger is very real in some parts of southern Europe, but is not even a distant threat in the UK. While deflation does cause the cost of debt to rise in real terms, the benefits to the wider economy of a period of falling prices far outweigh any downsides.” | “Deflation can be a chronic problem where it represents a lack of consumer confidence and an unwillingness to spend. This danger is very real in some parts of southern Europe, but is not even a distant threat in the UK. While deflation does cause the cost of debt to rise in real terms, the benefits to the wider economy of a period of falling prices far outweigh any downsides.” |
| 10.27am BST10:27 | 10.27am BST10:27 |
| For the worst housing inflation, look at Scotland -- where prices are up almost 15% since March 2014. | For the worst housing inflation, look at Scotland -- where prices are up almost 15% since March 2014. |
| Annual house price inflation rises for first time in 7 months. 9.6% across UK. But no longer just driven by London: pic.twitter.com/qs2P7EfIgm | Annual house price inflation rises for first time in 7 months. 9.6% across UK. But no longer just driven by London: pic.twitter.com/qs2P7EfIgm |
| 10.25am BST10:25 | 10.25am BST10:25 |
| There’s not much sign of negative inflation in the UK housing market. | There’s not much sign of negative inflation in the UK housing market. |
| New data this morning shows that UK house prices increased by 9.6% in the year to March 2015, up from 7.4% a month earlier. | New data this morning shows that UK house prices increased by 9.6% in the year to March 2015, up from 7.4% a month earlier. |
| In England, the market was driven by an 11.4% surge in house prices in the East, and 11.2% in London and in the South East. | In England, the market was driven by an 11.4% surge in house prices in the East, and 11.2% in London and in the South East. |
| Updated at 10.26am BST | Updated at 10.26am BST |
| 10.21am BST10:21 | 10.21am BST10:21 |
| The recent strength of the pound has also driven prices down over the last year, by making imports cheaper | The recent strength of the pound has also driven prices down over the last year, by making imports cheaper |
| Jeremy Cook, chief economist at the international payments company, World First, explains: | Jeremy Cook, chief economist at the international payments company, World First, explains: |
| Sterling is around 5.8% stronger than this time last year and the past 12 months have obviously been a significant decline in oil and food prices. The subsequent effect on imports into the UK means that disinflation is piggybacking on every product that we bring in from abroad.” | Sterling is around 5.8% stronger than this time last year and the past 12 months have obviously been a significant decline in oil and food prices. The subsequent effect on imports into the UK means that disinflation is piggybacking on every product that we bring in from abroad.” |
| “As oil prices recover and last year’s declines fall out of the inflationary basket then this will become less of an issue. | “As oil prices recover and last year’s declines fall out of the inflationary basket then this will become less of an issue. |
| 10.18am BST10:18 | 10.18am BST10:18 |
| Another sign that Britain isn’t in “damaging deflation” - the Retail Prices Index, a broader measure of inflation that also includes housing costs, rose by 0.9% over the last year. | Another sign that Britain isn’t in “damaging deflation” - the Retail Prices Index, a broader measure of inflation that also includes housing costs, rose by 0.9% over the last year. |
| Updated at 10.19am BST | Updated at 10.19am BST |
| 10.11am BST10:11 | 10.11am BST10:11 |
| Kevin Doran, Chief Investment Officer at Brown Shipley, a private bank, says we shouldn’t read too much into the CPI index: | Kevin Doran, Chief Investment Officer at Brown Shipley, a private bank, says we shouldn’t read too much into the CPI index: |
| “Despite today’s inflation numbers showing a fall into negative territory, investors shouldn’t be fooled into thinking this is an accurate representation of the state of inflation in the UK. | “Despite today’s inflation numbers showing a fall into negative territory, investors shouldn’t be fooled into thinking this is an accurate representation of the state of inflation in the UK. |
| You don’t have to look far to see that there is an abundance of inflation in asset prices, largely in bond and equity markets, with people rightly talking about bubbles in each of these respective asset classes, particularly tech stocks. | You don’t have to look far to see that there is an abundance of inflation in asset prices, largely in bond and equity markets, with people rightly talking about bubbles in each of these respective asset classes, particularly tech stocks. |
| 10.06am BST10:06 | 10.06am BST10:06 |
| Over the last year, food prices have fallen by 3.0% and prices of motor fuels fell by 12.3%, according to today’s inflation report. | Over the last year, food prices have fallen by 3.0% and prices of motor fuels fell by 12.3%, according to today’s inflation report. |
| This chart gives a better picture of price changes over the last 12 months and their impact on the inflation date: | This chart gives a better picture of price changes over the last 12 months and their impact on the inflation date: |
| Updated at 10.06am BST | Updated at 10.06am BST |
| 9.58am BST09:58 | 9.58am BST09:58 |
| What to call -0.1% CPI: negative inflation or deflation? My take: if you’re calling it deflation make sure you emphasise it’s not ‘30s style | What to call -0.1% CPI: negative inflation or deflation? My take: if you’re calling it deflation make sure you emphasise it’s not ‘30s style |
| 9.56am BST09:56 | 9.56am BST09:56 |
| Here’s another chart, showing how UK prices have risen (or very occasionally fallen) since the end of WW2 rationing: | Here’s another chart, showing how UK prices have risen (or very occasionally fallen) since the end of WW2 rationing: |
| CPI inflation since 1950. Last time it was in negative territory was 55 years ago pic.twitter.com/o6atO2fOZV | CPI inflation since 1950. Last time it was in negative territory was 55 years ago pic.twitter.com/o6atO2fOZV |
| There is a caveat, though -- CPI didn’t exist until 1996, so this is based on historical data.... | There is a caveat, though -- CPI didn’t exist until 1996, so this is based on historical data.... |
| 9.50am BST09:50 | 9.50am BST09:50 |
| George Osborne: It's good news (and it's not damaging deflation) | George Osborne: It's good news (and it's not damaging deflation) |
| A brief bout of negative inflation is NOT the same as full-blown deflation (defined as a protracted period of falling prices, where consumers expect things to keep getting cheaper). | A brief bout of negative inflation is NOT the same as full-blown deflation (defined as a protracted period of falling prices, where consumers expect things to keep getting cheaper). |
| As Chancellor of the Exchequer, George Osborne explains: | As Chancellor of the Exchequer, George Osborne explains: |
| “Today we see good news for family budgets with prices lower than they were a year ago. As the Governor of the Bank of England said only last week, we should not mistake this for damaging deflation. | “Today we see good news for family budgets with prices lower than they were a year ago. As the Governor of the Bank of England said only last week, we should not mistake this for damaging deflation. |
| Instead we should welcome the positive effects that lower food and energy prices bring for households at a time when wages are rising strongly, unemployment is falling and the economy is growing. Of course, we have to remain vigilant to deflationary risks and our system is well equipped to deal with them should they arise.” | Instead we should welcome the positive effects that lower food and energy prices bring for households at a time when wages are rising strongly, unemployment is falling and the economy is growing. Of course, we have to remain vigilant to deflationary risks and our system is well equipped to deal with them should they arise.” |
| 9.42am BST09:42 | 9.42am BST09:42 |
| We should enjoy falling prices while we can, says Tom Stevenson of Fidelity. | We should enjoy falling prices while we can, says Tom Stevenson of Fidelity. |
| Speaking on Sky News, he explains that Britain isn’t turning into Japan [which suffered actual deflation for many years], and this isn’t a return to the depression of the 1930. | Speaking on Sky News, he explains that Britain isn’t turning into Japan [which suffered actual deflation for many years], and this isn’t a return to the depression of the 1930. |
| Updated at 9.43am BST | Updated at 9.43am BST |
| 9.40am BST09:40 | 9.40am BST09:40 |
| CPI at -0.1% year on year, first dip into deflation since 1960. Timing of Easter this year an issue slightly depressing prices. | CPI at -0.1% year on year, first dip into deflation since 1960. Timing of Easter this year an issue slightly depressing prices. |
| 9.39am BST09:39 | 9.39am BST09:39 |
| The key charts: UK in negative inflation | The key charts: UK in negative inflation |
| This chart confirms that transport costs were the biggest drag on inflation last month. | This chart confirms that transport costs were the biggest drag on inflation last month. |
| That’s because Easter fell in March in 2015, but in April in 2014 -- so transport firms didn’t put their prices up this year. | That’s because Easter fell in March in 2015, but in April in 2014 -- so transport firms didn’t put their prices up this year. |
| Updated at 10.01am BST | Updated at 10.01am BST |
| 9.33am BST09:33 | 9.33am BST09:33 |
| 9.30am BST09:30 | 9.30am BST09:30 |
| UK inflation falls by 0.1% | UK inflation falls by 0.1% |
| Breaking: Britain is experiencing negative inflation for the first time in over half a century. | Breaking: Britain is experiencing negative inflation for the first time in over half a century. |
| The Office for National Statistics just reported that the consumer prices index fell by 0.1% in April. That’s the first negative reading since March 1960. | The Office for National Statistics just reported that the consumer prices index fell by 0.1% in April. That’s the first negative reading since March 1960. |
| More to follow! | More to follow! |
| 9.24am BST09:24 | 9.24am BST09:24 |
| This chart, from ING, shows how inflation, as measured by the Consumer Prices Index, hit a record low of zero this year. | This chart, from ING, shows how inflation, as measured by the Consumer Prices Index, hit a record low of zero this year. |
| Incidentally, CPI was created in the mid-1990s, but has been calculated back to 1989 using historical data. | Incidentally, CPI was created in the mid-1990s, but has been calculated back to 1989 using historical data. |
| More experimental data shows that it briefly turned negative in 1960, when Harold Macmillan was prime minister. | More experimental data shows that it briefly turned negative in 1960, when Harold Macmillan was prime minister. |
| 9.09am BST09:09 | 9.09am BST09:09 |
| Just 20 minute to go until we get the UK inflation data for April. | Just 20 minute to go until we get the UK inflation data for April. |
| Jeremy Cook, chief economist at World First, predicts that the consumer prices index will have turned negative, after being unchanged in February and March. | Jeremy Cook, chief economist at World First, predicts that the consumer prices index will have turned negative, after being unchanged in February and March. |
| Expecting UK CPI to see a YoY decline in April. Nothing catastrophic, but strong GBP, lower oil and food should see a print of -0.1% | Expecting UK CPI to see a YoY decline in April. Nothing catastrophic, but strong GBP, lower oil and food should see a print of -0.1% |
| ING’s economics team reckon inflation will soon start rising again: | ING’s economics team reckon inflation will soon start rising again: |
| UK consumer price inflation could fall into negative territory for the first time in the series’ history. This won’t last long though with the BoE expecting inflation to be at 2% in 2 years’ time..... | UK consumer price inflation could fall into negative territory for the first time in the series’ history. This won’t last long though with the BoE expecting inflation to be at 2% in 2 years’ time..... |
| Motor fuel prices are starting to move higher given the pick-up in oil prices. Furthermore, we are doubtful that much more food price deflation can be squeezed out of the supermarket fight for market share. | Motor fuel prices are starting to move higher given the pick-up in oil prices. Furthermore, we are doubtful that much more food price deflation can be squeezed out of the supermarket fight for market share. |
| And a small dose of negative inflation is no reason to panic, argues Newsnight’s Duncan Weldon: | And a small dose of negative inflation is no reason to panic, argues Newsnight’s Duncan Weldon: |
| Preemptive tweet: if CPI goes negative today that is not "bad deflation" & no reason to panic. As long as wages are growing, it's benign. | Preemptive tweet: if CPI goes negative today that is not "bad deflation" & no reason to panic. As long as wages are growing, it's benign. |
| Updated at 9.14am BST | Updated at 9.14am BST |
| 9.06am BST09:06 | 9.06am BST09:06 |
| European stock markets have jumped, following the news that the ECB will accelerate its bond-buying programme in May and June (before heading to the beaches for the summer). | European stock markets have jumped, following the news that the ECB will accelerate its bond-buying programme in May and June (before heading to the beaches for the summer). |
| Traders are deducing that a weaker euro and an extra dose of stimulus is good news for European firms, pushing up shares in Paris, Frankfurt, Milan and Madrid: | Traders are deducing that a weaker euro and an extra dose of stimulus is good news for European firms, pushing up shares in Paris, Frankfurt, Milan and Madrid: |
| Updated at 9.07am BST | Updated at 9.07am BST |
| 8.55am BST08:55 | 8.55am BST08:55 |
| Juncker denies drawing up Greek compromise plan | Juncker denies drawing up Greek compromise plan |
| Newsflashes are coming in that Jean-Claude Juncker, EC president, has denied that he’s drawn up a compromise plan to break the Greek deadlock. | Newsflashes are coming in that Jean-Claude Juncker, EC president, has denied that he’s drawn up a compromise plan to break the Greek deadlock. |
| He’s also ruled out a breakthrough at this week’s meeting of EU leaders in Latvia, but still hopes for a deal by early June. | He’s also ruled out a breakthrough at this week’s meeting of EU leaders in Latvia, but still hopes for a deal by early June. |
| *JUNCKER DISMISSES REPORTS OF GREECE COMPROMISE PLAN BY HIM | *JUNCKER DISMISSES REPORTS OF GREECE COMPROMISE PLAN BY HIM |
| [As we covered in Monday’s liveblog, the To Vima newspaper had reported that Juncker had proposed more achievable Greek budget surplus targets and a cut-down list of economic reforms.] | [As we covered in Monday’s liveblog, the To Vima newspaper had reported that Juncker had proposed more achievable Greek budget surplus targets and a cut-down list of economic reforms.] |
| *JUNCKER RULES OUT POSSIBILITY OF GREECE AID DEAL IN RIGA | *JUNCKER RULES OUT POSSIBILITY OF GREECE AID DEAL IN RIGA |
| *JUNCKER FORESEES AID DEAL ON GREECE AT END-MAY OR IN EARLY JUNE | *JUNCKER FORESEES AID DEAL ON GREECE AT END-MAY OR IN EARLY JUNE |
| EU Commission Pres Jean-Claude Juncker tells Bloomberg he expects end-of-May/early-June Greek deal & that he's personally involved in talks. | EU Commission Pres Jean-Claude Juncker tells Bloomberg he expects end-of-May/early-June Greek deal & that he's personally involved in talks. |
| 8.40am BST08:40 | 8.40am BST08:40 |
| Greek car sales may be up 43% this year, but they’re still way, way below their pre-crisis peak: | Greek car sales may be up 43% this year, but they’re still way, way below their pre-crisis peak: |
| About that 43.3% y/y rise in Greek car regs. Impressive, but also about base effects, trend still below 1990 levels! pic.twitter.com/vtymqhi8UX | About that 43.3% y/y rise in Greek car regs. Impressive, but also about base effects, trend still below 1990 levels! pic.twitter.com/vtymqhi8UX |
| 8.32am BST08:32 | 8.32am BST08:32 |
| Euro tumbles as ECB vows to speed up QE | Euro tumbles as ECB vows to speed up QE |
| The European Central Bank is planning to speed up the pace of its bond-buying stimulus programme before the summer lull, according to senior policymaker Benoit Coeure. | The European Central Bank is planning to speed up the pace of its bond-buying stimulus programme before the summer lull, according to senior policymaker Benoit Coeure. |
| In remarks that just send the euro tumbling, Coeure explained that the ECB wants to buy more bonds than average over the next six weeks, to avoid the “notably lower market liquidity” in late July and August. | In remarks that just send the euro tumbling, Coeure explained that the ECB wants to buy more bonds than average over the next six weeks, to avoid the “notably lower market liquidity” in late July and August. |
| The Eurosystem is taking this into account in the implementation of its expanded asset purchase programme by moderately frontloading its purchase activity in May and June, which will allow us to maintain our monthly average of €60 billion, while having to buy less in the holiday period. If need be, the frontloading may be complemented by some backloading in September when market liquidity is expected to improve again. | The Eurosystem is taking this into account in the implementation of its expanded asset purchase programme by moderately frontloading its purchase activity in May and June, which will allow us to maintain our monthly average of €60 billion, while having to buy less in the holiday period. If need be, the frontloading may be complemented by some backloading in September when market liquidity is expected to improve again. |
| Coeure denied that the ECB is putting its foot on the accelerator to calm the bond markets, after seeing wild swings in the price of bunds in recent weeks. | Coeure denied that the ECB is putting its foot on the accelerator to calm the bond markets, after seeing wild swings in the price of bunds in recent weeks. |
| The slightly higher purchase volume that market analysts may observe in the coming weeks is therefore unrelated to the recent episode of market volatility. | The slightly higher purchase volume that market analysts may observe in the coming weeks is therefore unrelated to the recent episode of market volatility. |
| The speech was given in London yesterday, but appears to have just been made public. The ECB is even tweeting the key points now, to make sure everyone gets the message: | The speech was given in London yesterday, but appears to have just been made public. The ECB is even tweeting the key points now, to make sure everyone gets the message: |
| Cœuré: we frontload purchases in May and June to maintain monthly average of 60bn while buying less in holiday season http://t.co/do7tWq3fln | Cœuré: we frontload purchases in May and June to maintain monthly average of 60bn while buying less in holiday season http://t.co/do7tWq3fln |
| Cœuré: slightly higher purchases in coming weeks are therefore unrelated to the recent episode of market volatility http://t.co/do7tWq3fln | Cœuré: slightly higher purchases in coming weeks are therefore unrelated to the recent episode of market volatility http://t.co/do7tWq3fln |
| The prospect of the ECB buying even more government bonds in May and June has sent the euro tumbling by more than one cent against the US dollar, to $1.1195: | The prospect of the ECB buying even more government bonds in May and June has sent the euro tumbling by more than one cent against the US dollar, to $1.1195: |
| 8.17am BST08:17 | 8.17am BST08:17 |
| Car sales numbers from Greece suggest Greeks are storing cash in cars. Whether that is in the boot or not remains to be seen | Car sales numbers from Greece suggest Greeks are storing cash in cars. Whether that is in the boot or not remains to be seen |
| 8.12am BST08:12 | 8.12am BST08:12 |
| European car sales rise again | European car sales rise again |
| Car sales across Europe have risen for the 20th month running, helped by a remarkable boom in demand in Greece. | Car sales across Europe have risen for the 20th month running, helped by a remarkable boom in demand in Greece. |
| Industry body ACEA has reported that new passenger registrations in the EU rose by 6.9% year-on-year in April, as the pick-up in consumer spending continues. | Industry body ACEA has reported that new passenger registrations in the EU rose by 6.9% year-on-year in April, as the pick-up in consumer spending continues. |
| The recovery looks broad-based. ACEA says: | The recovery looks broad-based. ACEA says: |
| All major markets contributed positively to the overall expansion, especially Italy (+24.2%), which posted double‐digit growth, followed by Germany (+6.3%), the UK (+5.1%), Spain (+3.2%) and France (+2.3%) that also performed better than in April 2014. | All major markets contributed positively to the overall expansion, especially Italy (+24.2%), which posted double‐digit growth, followed by Germany (+6.3%), the UK (+5.1%), Spain (+3.2%) and France (+2.3%) that also performed better than in April 2014. |
| European car sales rose a 20th consecutive month in April, bolstered by reviving economy and new models from Renault, BMW and Fiat Chrysler | European car sales rose a 20th consecutive month in April, bolstered by reviving economy and new models from Renault, BMW and Fiat Chrysler |
| The data also shows that 7,801 new cars were bought in Greece last month, a 43% jump on the 5,444 sold in April 2014. | The data also shows that 7,801 new cars were bought in Greece last month, a 43% jump on the 5,444 sold in April 2014. |
| Analysts have suggested some nervous Greeks are taking money out of the banks, and buying cars, in case the country should plunge out of the eurozone or implement capital controls. | Analysts have suggested some nervous Greeks are taking money out of the banks, and buying cars, in case the country should plunge out of the eurozone or implement capital controls. |
| As Mehreen Khan wrote in the Telegraph last week: | As Mehreen Khan wrote in the Telegraph last week: |
| Despite depreciating in value quite quickly, cars are still a handy asset to own because they can be put to productive use - especially if the alternative is just stashing your money under a mattress. | Despite depreciating in value quite quickly, cars are still a handy asset to own because they can be put to productive use - especially if the alternative is just stashing your money under a mattress. |
| In a strange irony of Greece’s woes, German industry is perversely one of the main beneficiaries of the country’s banking collapse. Greek consumers, like many of their fellow Europeans, buy German cars more than any other brand. | In a strange irony of Greece’s woes, German industry is perversely one of the main beneficiaries of the country’s banking collapse. Greek consumers, like many of their fellow Europeans, buy German cars more than any other brand. |
| Cars sales: decent proxy for Greek capital flight http://t.co/zILnpZQVM3 | Cars sales: decent proxy for Greek capital flight http://t.co/zILnpZQVM3 |
| 7.52am BST07:52 | 7.52am BST07:52 |
| Germany’s Deutsche Bank has made a dramatic intervention into the debate over Britain’s membership of the European Union, revealing it might quit the City if the UK left the EU. | Germany’s Deutsche Bank has made a dramatic intervention into the debate over Britain’s membership of the European Union, revealing it might quit the City if the UK left the EU. |
| This makes Deutsche, which employs 8,000 people in the UK, the first financial company to formally say it could shift its operations overseas in the event of Brexit. | This makes Deutsche, which employs 8,000 people in the UK, the first financial company to formally say it could shift its operations overseas in the event of Brexit. |
| Related: Deutsche Bank may leave Britain in event of 'Brexit' – reports | Related: Deutsche Bank may leave Britain in event of 'Brexit' – reports |
| 7.44am BST07:44 | 7.44am BST07:44 |
| Varoufakis: Deal could come in a week | Varoufakis: Deal could come in a week |
| Last night, Greek finance minister Yanis Varoufakis was grilled about the country’s bailout negotiations in a live TV interview on Star TV. | Last night, Greek finance minister Yanis Varoufakis was grilled about the country’s bailout negotiations in a live TV interview on Star TV. |
| Here are the key points, in case you missed it: | Here are the key points, in case you missed it: |
| On the timing of any deal with creditors: | On the timing of any deal with creditors: |
| “I think we are very close....Let’s say (it’s a matter) of about a week.” | “I think we are very close....Let’s say (it’s a matter) of about a week.” |
| What would happen if Greece couldn’t repay both the IMF and its pensions? | What would happen if Greece couldn’t repay both the IMF and its pensions? |
| “I assure you that if we face a dilemma between paying a creditor who refuses to sign an agreement with us and a pensioner, we will pay the pensioner.....I hope we will be able to pay both.” | “I assure you that if we face a dilemma between paying a creditor who refuses to sign an agreement with us and a pensioner, we will pay the pensioner.....I hope we will be able to pay both.” |
| Who is to blame for Greece’s liquidity squeeze? | Who is to blame for Greece’s liquidity squeeze? |
| “The lack of liquidity is neither the choice nor the responsibility of the Greek government. | “The lack of liquidity is neither the choice nor the responsibility of the Greek government. |
| It is a tough negotiating tactic of our partners, and I do not know whether everybody in Europe feels proud of it.” | It is a tough negotiating tactic of our partners, and I do not know whether everybody in Europe feels proud of it.” |
| Should Greece hold a referendum? | Should Greece hold a referendum? |
| “It would be unfair for Greek citizens to have to take a position on such a matter, answering with either a yes or a no.” | “It would be unfair for Greek citizens to have to take a position on such a matter, answering with either a yes or a no.” |
| Enikos, which broadcast a live translation, tweeted some key points: | Enikos, which broadcast a live translation, tweeted some key points: |
| Varoufakis: I am a soldier, never considered resigning - http://t.co/pj2NGKwYfW pic.twitter.com/zy6fvUBFId | Varoufakis: I am a soldier, never considered resigning - http://t.co/pj2NGKwYfW pic.twitter.com/zy6fvUBFId |
| Varoufakis: We are NOT considering a different currency -http://t.co/ggxdwIAyEK | Varoufakis: We are NOT considering a different currency -http://t.co/ggxdwIAyEK |
| Updated at 7.47am BST | Updated at 7.47am BST |
| 7.24am BST07:24 | 7.24am BST07:24 |
| The Agenda: UK inflation and Greek developments | The Agenda: UK inflation and Greek developments |
| 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. |
| Britain’s headline inflation rate may turn negative for the first time in half a century. The cost of living has been unchanged for the last two months, but economists reckon it could actually have fallen in April, thanks to the cheaper oil and fuel. | Britain’s headline inflation rate may turn negative for the first time in half a century. The cost of living has been unchanged for the last two months, but economists reckon it could actually have fallen in April, thanks to the cheaper oil and fuel. |
| We find out at 9.30am BST, when the Office for National Statistics publishes the latest Consumer Prices Index data. | We find out at 9.30am BST, when the Office for National Statistics publishes the latest Consumer Prices Index data. |
| Here’s our preview: | Here’s our preview: |
| Related: UK inflation picked to turn negative for the first time in more than 50 years | Related: UK inflation picked to turn negative for the first time in more than 50 years |
| Greece is also dominating the attention again, on hopes that it could yet find a compromise with its lenders before running out of cash reserves. | Greece is also dominating the attention again, on hopes that it could yet find a compromise with its lenders before running out of cash reserves. |
| Last night, prime minister Alexis Tsipras claimed that a breakthrough was close, sentiments echoed by his finance minister in a late night TV interview (more on that shortly): | Last night, prime minister Alexis Tsipras claimed that a breakthrough was close, sentiments echoed by his finance minister in a late night TV interview (more on that shortly): |
| Related: Alexis Tsipras claims Greece is close to securing deal with Brussels and the IMF | Related: Alexis Tsipras claims Greece is close to securing deal with Brussels and the IMF |
| And although reports that EC president Jean-Claude Juncker was working on a compromise deal were denied (although not very robustly) yesterday, they did raise hopes that the two sides could make enough progress to unlock some bailout funds. | And although reports that EC president Jean-Claude Juncker was working on a compromise deal were denied (although not very robustly) yesterday, they did raise hopes that the two sides could make enough progress to unlock some bailout funds. |
| But tensions are rising in Athens. Later today, a group of prominent left-wing politicians from Tsipras’s Syriza party will hold a meeting to argue that Greece must ‘rupture’ with its lenders, and possibly leave the euro. | But tensions are rising in Athens. Later today, a group of prominent left-wing politicians from Tsipras’s Syriza party will hold a meeting to argue that Greece must ‘rupture’ with its lenders, and possibly leave the euro. |
| In a statement released yesterday, they declare said: | In a statement released yesterday, they declare said: |
| With a suspension of repayments [of the debt], measures that restrict the “freedom” of capital flight, governmental control over the banks, taxation of capital and of the rich for the financing of pro-people measures, support of this policy with any and all possible means, and with the possible break from the EMU. | With a suspension of repayments [of the debt], measures that restrict the “freedom” of capital flight, governmental control over the banks, taxation of capital and of the rich for the financing of pro-people measures, support of this policy with any and all possible means, and with the possible break from the EMU. |
| Call for "rupture now" by the Political Secretariat & Central Committee of #Syriza http://t.co/cGcxZlGExD #Greece | Call for "rupture now" by the Political Secretariat & Central Committee of #Syriza http://t.co/cGcxZlGExD #Greece |
| We also find out if the Greek crisis is hitting German economic sentiment, when the ZEW index is released at 11am. | We also find out if the Greek crisis is hitting German economic sentiment, when the ZEW index is released at 11am. |
| Europe’s stock markets are expected to inch higher. Here’s IG’s opening calls: | Europe’s stock markets are expected to inch higher. Here’s IG’s opening calls: |
| We’ll be tracking all the main developments through the day.... | We’ll be tracking all the main developments through the day.... |