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Greece warns it will miss June IMF repayment without a deal - live updates Greece warns it will miss June IMF repayment without a deal - live updates
(35 minutes later)
9.41am BST09:41
Britain’s central bank can’t agree whether wage are going to rise strongly, or not.
This is the key bit of the MPC minutes. Pay growth & inflation might pick up quickly... Or they might not... pic.twitter.com/8FyR96ZeQW
9.39am BST09:39
The Bank of England also believes UK economic growth will accelerate this quarter, after slowing to just 0.3% in the first three months of 2015.
The minutes say:
The Committee judged that GDP growth would pick up in Q2 to close to its historical average rate, supported by the boost to real incomes from the fall in food, energy and other import prices, and would continue to grow at, or just a little below, historical average rates throughout the forecast period.
9.37am BST09:37
Bank of England minutes released
The Bank of England’s monetary policy committee was unanimous in voting to leave interest rates unchanged this month, according to the minutes of the meeting which were just released.
However, the decision of whether to hold or raise Bank Rate was “finely balanced” for two MPC members.
That’s probably Martin Weale and Ian McCafferty, who recently stopped voting for a rate rise once they realised that inflation was falling really quite sharply (to -0.1% last month).
The minutes also show that the MPC is confident that borrowing costs will rise in the medium term, having been pegged at 0.5% since March 2009:
While there was a range of views over the most likely future path for Bank Rate, all members agreed that it was more likely than not that Bank Rate would rise over the three-year forecast period.
The minutes are online here:
Minutes of the MPC Meeting held on 7 and 8 May http://t.co/23rf87VcTR
Updated at 9.37am BST
9.16am BST09:169.16am BST09:16
Europe’s stock markets are rather becalmed this morning, as the Greek crisis continues to worry traders.Europe’s stock markets are rather becalmed this morning, as the Greek crisis continues to worry traders.
Most of the major indices are slightly in the red:Most of the major indices are slightly in the red:
The Athens stock market has also dipped, down 0.2% in early trading.The Athens stock market has also dipped, down 0.2% in early trading.
Stan Shamu of IG says:Stan Shamu of IG says:
Unfortunately Greece remained a thorn with no positive developments and reduced expectations of a swift solution.Unfortunately Greece remained a thorn with no positive developments and reduced expectations of a swift solution.
In London, Burberry’s share have slid 4% after the fashion chain cut its profit forecasts for 2016 and blamed currency fluctuations.In London, Burberry’s share have slid 4% after the fashion chain cut its profit forecasts for 2016 and blamed currency fluctuations.
It was a better day in Japan, where the Nikkei touched a 15-year high. That followed the news that the Japanese economy grew by 0.6% in the last quarter (an annualised rate of 2.4%). That beat expectations, and also outperformed the US, the UK and the eurozone.It was a better day in Japan, where the Nikkei touched a 15-year high. That followed the news that the Japanese economy grew by 0.6% in the last quarter (an annualised rate of 2.4%). That beat expectations, and also outperformed the US, the UK and the eurozone.
9.00am BST09:009.00am BST09:00
Moscovici: Still big gaps to close with GreeceMoscovici: Still big gaps to close with Greece
We’re making progress with Greece, but we’re not there yet.We’re making progress with Greece, but we’re not there yet.
That’s the message from Pierre Moscovici, European commissioner for Economic and Monetary Affairs, this morning.That’s the message from Pierre Moscovici, European commissioner for Economic and Monetary Affairs, this morning.
Speaking in Paris a few moments ago, Moscovici said that negotiations are advancing, but they need to accelerate.Speaking in Paris a few moments ago, Moscovici said that negotiations are advancing, but they need to accelerate.
Worryingly, he also warns that pensions and labour market issues remain unresolved -- those are the red lines which Greece is sticking to.Worryingly, he also warns that pensions and labour market issues remain unresolved -- those are the red lines which Greece is sticking to.
8.41am BST08:418.41am BST08:41
Greece’s governing Syriza party has called a rally in Paris tonight, to show support for Athens in its battle with its creditors.Greece’s governing Syriza party has called a rally in Paris tonight, to show support for Athens in its battle with its creditors.
The event, at 18:30 in Republic Square, will call on Greece’s lenders to respect its “red lines”; the promises on pensions and labour market reforms, ahead of an EU summit tomorrow in Riga, Latvia.The event, at 18:30 in Republic Square, will call on Greece’s lenders to respect its “red lines”; the promises on pensions and labour market reforms, ahead of an EU summit tomorrow in Riga, Latvia.
That summit meeting will be “a decisive meeting in the political confrontation between austerity and social justice, between neo-liberalism and democracy in Europe”, they say. More details here.That summit meeting will be “a decisive meeting in the political confrontation between austerity and social justice, between neo-liberalism and democracy in Europe”, they say. More details here.
SYRIZA calls for a "Avec les Grecs" (together with Greeks) rally today in Paris, #France in place de la République. http://t.co/ts36jIYoOSSYRIZA calls for a "Avec les Grecs" (together with Greeks) rally today in Paris, #France in place de la République. http://t.co/ts36jIYoOS
It seems that SYRIZA is trying to re-ignite people's support across Europe in head of the #eurogroup negotiation #greece #previoustweetIt seems that SYRIZA is trying to re-ignite people's support across Europe in head of the #eurogroup negotiation #greece #previoustweet
8.28am BST08:288.28am BST08:28
Investors are bracing for Greece to miss its €305m repayment to the IMF on June 5, says Mike van Dulken of Accendo Markets.Investors are bracing for Greece to miss its €305m repayment to the IMF on June 5, says Mike van Dulken of Accendo Markets.
In Europe this morning indications are that, while there has been progress in negotiations, Greece will miss its June debt payment to the IMF unless a deal is reached by the end of May.In Europe this morning indications are that, while there has been progress in negotiations, Greece will miss its June debt payment to the IMF unless a deal is reached by the end of May.
Concessions for Greece are highly unlikely - the EU will almost certainly face a second revolt in the form of Portugal’s ascendant socialists if any are afforded to Athens.Concessions for Greece are highly unlikely - the EU will almost certainly face a second revolt in the form of Portugal’s ascendant socialists if any are afforded to Athens.
Portugal holds a general election this autumn, and opinion polls show the opposition Socialists holding a small lead. Their leader, Antonio Costa, has vowed to reverse the austerity measures imposed since its 2011 bailout, suggesting the eurozone crisis could flare again soon.....Portugal holds a general election this autumn, and opinion polls show the opposition Socialists holding a small lead. Their leader, Antonio Costa, has vowed to reverse the austerity measures imposed since its 2011 bailout, suggesting the eurozone crisis could flare again soon.....
8.20am BST08:208.20am BST08:20
The foreign-exchange rigging scandal took another twist this morning.The foreign-exchange rigging scandal took another twist this morning.
Swiss bank UBS revealed it had dodged being prosecuted by the US Department of Justice...because it blew the whistle that traders had been conspiring to fix the rates at which currencies were changing hands.Swiss bank UBS revealed it had dodged being prosecuted by the US Department of Justice...because it blew the whistle that traders had been conspiring to fix the rates at which currencies were changing hands.
Other banks could be hit with big fines today, as City editor Jill Treanor explains:Other banks could be hit with big fines today, as City editor Jill Treanor explains:
The announcement from UBS signals that the US DoJ is preparing to impose punishments on other banks – including Barclays and bailed-out Royal Bank of Scotland – as soon as Wednesday. Barclays is also awaiting punishment from the FCA and has already prepared the ground for penalties of as much as £2bn.The announcement from UBS signals that the US DoJ is preparing to impose punishments on other banks – including Barclays and bailed-out Royal Bank of Scotland – as soon as Wednesday. Barclays is also awaiting punishment from the FCA and has already prepared the ground for penalties of as much as £2bn.
The punishments, also expected on two US banks, could result in total penalties of over £3bn and require the banks to plead guilty to offences relating to manipulating foreign exchange markets – a sanction rarely imposed by the DoJThe punishments, also expected on two US banks, could result in total penalties of over £3bn and require the banks to plead guilty to offences relating to manipulating foreign exchange markets – a sanction rarely imposed by the DoJ
Related: UBS facing £350m in fines as banks hit with fresh sanctions for forex riggingRelated: UBS facing £350m in fines as banks hit with fresh sanctions for forex rigging
8.09am BST08:098.09am BST08:09
The euro fell sharply following the warning that Greece could miss its repayment to the IMF on June 5.The euro fell sharply following the warning that Greece could miss its repayment to the IMF on June 5.
It hit a two week low against the US dollar at $1.107.It hit a two week low against the US dollar at $1.107.
Updated at 8.09am BSTUpdated at 8.09am BST
8.03am BST08:038.03am BST08:03
Greece will prioritise pensions and wages rather than repaying the IMF, if creditors don’t unlock some of the €7.2bn in outstanding bailout funds, added Nikos Filis.Greece will prioritise pensions and wages rather than repaying the IMF, if creditors don’t unlock some of the €7.2bn in outstanding bailout funds, added Nikos Filis.
“There is no money for the foreign (lenders) when they have not given us any funds for a year...We don’t have it to make the payment and this is part of the discussion.”“There is no money for the foreign (lenders) when they have not given us any funds for a year...We don’t have it to make the payment and this is part of the discussion.”
7.54am BST07:547.54am BST07:54
Greece: No IMF repayment without a dealGreece: No IMF repayment without a deal
The Greek government has warned that it will miss its next repayment to the International Monetary Fund unless a deal is reached soon.The Greek government has warned that it will miss its next repayment to the International Monetary Fund unless a deal is reached soon.
Nikos Filis, the government’s parliamentary speaker, raised the stakes in its negotiations with its lenders this morning.Nikos Filis, the government’s parliamentary speaker, raised the stakes in its negotiations with its lenders this morning.
He told the ANT1 TV station that the IMF won’t get the €305m due in a fortnight’s time, unless creditors have unlocked some bailout funds.He told the ANT1 TV station that the IMF won’t get the €305m due in a fortnight’s time, unless creditors have unlocked some bailout funds.
“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5.“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5.
“If there is no deal by then that will address the current funding problem, they won’t get any money.”“If there is no deal by then that will address the current funding problem, they won’t get any money.”
(thanks to Reuters for the quotes)(thanks to Reuters for the quotes)
Filis’s comments could reverberate around the European Central Bank’s HQ in Frankfurt, as the governing council meets to discuss the crisis.Filis’s comments could reverberate around the European Central Bank’s HQ in Frankfurt, as the governing council meets to discuss the crisis.
GREECE WILL NOT MAKE JUNE 5 IMF LOAN REPAYMENT IF NO DEAL WITH LENDERS IS REACHED BY THEN- GOVT PARLIAMENTARY SPEAKER - RTRSGREECE WILL NOT MAKE JUNE 5 IMF LOAN REPAYMENT IF NO DEAL WITH LENDERS IS REACHED BY THEN- GOVT PARLIAMENTARY SPEAKER - RTRS
This echo a warning from Greece’s Labour minister Panos Skourletis. As we covered in Tuesday’s liveblog, Skourletis warned that “things will be difficult” if Greece hits June without a deal.This echo a warning from Greece’s Labour minister Panos Skourletis. As we covered in Tuesday’s liveblog, Skourletis warned that “things will be difficult” if Greece hits June without a deal.
A glance at Greece’s repayment schedule confirms that June will be very sticky unless the two sides have reached agreement....A glance at Greece’s repayment schedule confirms that June will be very sticky unless the two sides have reached agreement....
7.52am BST07:527.52am BST07:52
The Agenda: ECB to discuss Greek support todayThe Agenda: ECB to discuss Greek support today
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.
The European Central Bank will hold the fate of Greece’s banking system in its hands today.The European Central Bank will hold the fate of Greece’s banking system in its hands today.
The 25 members of the ECB’s governing council will discuss whether to keep pumping emergency liquidity into Greek banks to keep them afloat. They might decide to impose a higher haircut on the assets provided by the Bank of Greece in return for this support.The 25 members of the ECB’s governing council will discuss whether to keep pumping emergency liquidity into Greek banks to keep them afloat. They might decide to impose a higher haircut on the assets provided by the Bank of Greece in return for this support.
According to the Financial Times, this is a serious possibility:According to the Financial Times, this is a serious possibility:
It is possible that two thirds of the council will support the move as soon as the Wednesday vote.It is possible that two thirds of the council will support the move as soon as the Wednesday vote.
The haircuts were lowered last year after Greece returned to capital markets. The council is considering returning to the levels applied before the reduction, according to two people familiar with the matter.The haircuts were lowered last year after Greece returned to capital markets. The council is considering returning to the levels applied before the reduction, according to two people familiar with the matter.
This would lower the level of collateral held by Greek banks eligible for emergency loans from €95bn to €88bn and is viewed by insiders as a relatively incremental shift.This would lower the level of collateral held by Greek banks eligible for emergency loans from €95bn to €88bn and is viewed by insiders as a relatively incremental shift.
At the moment, Greek banks can access €80bn of liquidity.At the moment, Greek banks can access €80bn of liquidity.
The ECB could even cut the emergency liquidity scheme off altogether, if it reckons Greece simply poses too much risk to the rest of the eurosystem.The ECB could even cut the emergency liquidity scheme off altogether, if it reckons Greece simply poses too much risk to the rest of the eurosystem.
That would be the nuclear option, though, and take the central bank even further into political considerations. Does it really want to be responsible for the break-up of the single currency?That would be the nuclear option, though, and take the central bank even further into political considerations. Does it really want to be responsible for the break-up of the single currency?
The decision is expected this afternoon.The decision is expected this afternoon.
ECB ensnared in politics as it faces vote on Bank of Greece loans: http://t.co/PH8k3ORqmS #FTECB ensnared in politics as it faces vote on Bank of Greece loans: http://t.co/PH8k3ORqmS #FT
Also coming up today...Also coming up today...
Some of the world’s biggest banks are expected to be fined billions of dollars, and face criminal charges, over the foreign-exchange rate rigging scandal.Some of the world’s biggest banks are expected to be fined billions of dollars, and face criminal charges, over the foreign-exchange rate rigging scandal.
In the City, investors will be digesting results from high street stalwart Marks & Spencer, fashion chain Burberry and travel firm Thomas Cook.In the City, investors will be digesting results from high street stalwart Marks & Spencer, fashion chain Burberry and travel firm Thomas Cook.
And we get minutes of the last meeting of the Bank of England at 9.30am BST, and then the Federal Reserve tonight (7pm BST).And we get minutes of the last meeting of the Bank of England at 9.30am BST, and then the Federal Reserve tonight (7pm BST).