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Relief for investors as Greece averts fresh crisis - business live Relief for investors as Greece averts fresh crisis - business live
(35 minutes later)
1.51pm BST
13:51
US housing starts fall to eight-month low
New US homebuilding fell for a third month in May, to the lowest level in eight months.
Housing starts fell 5.5% to an annual rate of 1.09 million units, the US Commerce Department said. It was the lowest level since September 2016, and reflected a broad slowdown in construction.
It was weaker than expected, with economists polled by Reuters predicting 1.2 million starts.
1.34pm BST
13:34
Over in Greece, prime minister Alexis Tsipras has called last night’s Eurogroup decision a “decisive step” towards ending the country’s eight-year-long economic crisis.
Helena Smith reports from Athens:
In upbeat mood, Alexis Tsipras described the decision to throw Greece a new credit line as a “clear sign” of confidence towards markets.
Briefing head of state President Prokopis Pavlopoulos on the details, Tsipras said the agreement thrashed out between eurozone member states and the IMF in Luxembourg late Thursday, amounted to “a clear commitment” that Greece would emerge from international stewardship.
A clear sign of confidence was given to markets and a clear commitment [was given] to the Greek people, who have suffered so much.
[A clear commitment] that the programmes will end decisively with the end of the third [bailout] programme in a year from now.
Tsipras’ own poll ratings and that of his two-party coalition have fallen precipitously as the government, under pressure from creditors, has time and again been forced to legislate highly unpopular pension cuts and tax increases.
Now we must step up our efforts to create the conditions for a dynamic recovery which will be felt by citizens in their every day life with a view to … healing the wounds of the crisis.”
Tsipras’ term ends in 2019. In a bid to turn around flagging morale, the government is expected to launch an all-out drive to spin the results of last night’s deal - even if it did not get the debt relief it had been hoping for.
1.23pm BST
13:23
Time for a market update. European indices have held on to earlier gains, with the latest scores as follows:
FTSE 100: +0.5% at 7,458
FTSE 250: +0.9% at 19,721
Germany’s DAX: +0.3% at 12,725
France’s CAC: +0.7% at 5,252
Italy’s FTSE MIB: +0.4% at 20,937
Spain’s IBEX: +0.3% at 10,728
Greece’s ATG: +1.6% at 812.5
Europe’s STOXX 600: +0.6% at 388
1.10pm BST1.10pm BST
13:1013:10
The yen is at a two-week low against the dollar after the Bank of Japan kept interest rates on hold and said it was in no hurry to follow the US Fed and tighten monetary policy.The yen is at a two-week low against the dollar after the Bank of Japan kept interest rates on hold and said it was in no hurry to follow the US Fed and tighten monetary policy.
The yen fell nearly 0.5% to 111.415 per dollar.The yen fell nearly 0.5% to 111.415 per dollar.
Martin Arnold, currency strategist at ETF Securities, said:Martin Arnold, currency strategist at ETF Securities, said:
The theme continues to be the potential for further yen weakness because they are still grappling with the deflationary mindset of the Japanese consumer.The theme continues to be the potential for further yen weakness because they are still grappling with the deflationary mindset of the Japanese consumer.
I think safe haven trade is the only light at the end of the tunnel - there has to be some sort of significant [risk] event to light a spark under the yen.I think safe haven trade is the only light at the end of the tunnel - there has to be some sort of significant [risk] event to light a spark under the yen.
12.24pm BST12.24pm BST
12:2412:24
Weak pound boosts UK tourismWeak pound boosts UK tourism
Foreign tourists came to Britain in bigger numbers in April, taking advantage of the weaker pound.Foreign tourists came to Britain in bigger numbers in April, taking advantage of the weaker pound.
There were 3.7 million visits during the month, up 19% compared with the same April 2016. They spent 20% more too, at £2bn according to the ONS figures.There were 3.7 million visits during the month, up 19% compared with the same April 2016. They spent 20% more too, at £2bn according to the ONS figures.
Numbers were partly boosted by the timing of Easter, which fell in April this year but March the year before.Numbers were partly boosted by the timing of Easter, which fell in April this year but March the year before.
However, the number of Brits travelling abroad is far greater, at 6.1m visits in April, up 2% compared with a year earlier. UK residents spent £3.5bn, down 1%.However, the number of Brits travelling abroad is far greater, at 6.1m visits in April, up 2% compared with a year earlier. UK residents spent £3.5bn, down 1%.
Patricia Yates, director of Visit Britain (the UK’s tourist authority) commented on the figures:Patricia Yates, director of Visit Britain (the UK’s tourist authority) commented on the figures:
Tourism is one of Britain’s most valuable export industries and it is very encouraging to see this continued growth as we head into the peak summer season and beyond.Tourism is one of Britain’s most valuable export industries and it is very encouraging to see this continued growth as we head into the peak summer season and beyond.
We continue to drive home the message of value and welcome globally, particularly in our high spending markets China and the US and the valuable European market.We continue to drive home the message of value and welcome globally, particularly in our high spending markets China and the US and the valuable European market.
11.24am BST11.24am BST
11:2411:24
The pound is roughly flat against the dollar, after receiving a boost on Thursday from the shock news that three Bank of England policymakers voted to raise interest rates at their June meeting.The pound is roughly flat against the dollar, after receiving a boost on Thursday from the shock news that three Bank of England policymakers voted to raise interest rates at their June meeting.
They were outvoted 5-3 but it signalled a deeper-than-expected split among the Monetary Policy Committee and edged the Bank closer to a rate hike.They were outvoted 5-3 but it signalled a deeper-than-expected split among the Monetary Policy Committee and edged the Bank closer to a rate hike.
Sterling is up 0.1% at $1.2765, but down 0.1% against the euro at €1.1423.Sterling is up 0.1% at $1.2765, but down 0.1% against the euro at €1.1423.
David Madden, market analyst at CMC Markets:David Madden, market analyst at CMC Markets:
The GBP/USD has been trading within a tight range, the pound hasn’t made any more gains versus the US dollar in the wake of the surprisingly hawkish BoE vote yesterday, but neither has it given up much ground.The GBP/USD has been trading within a tight range, the pound hasn’t made any more gains versus the US dollar in the wake of the surprisingly hawkish BoE vote yesterday, but neither has it given up much ground.
11.03am BST11.03am BST
11:0311:03
Hammond: UK must focus on jobs in Brexit talksHammond: UK must focus on jobs in Brexit talks
Philip Hammond has been speaking to reporters in Luxembourg, where finance ministers are gathered for today’s Ecofin meeting.Philip Hammond has been speaking to reporters in Luxembourg, where finance ministers are gathered for today’s Ecofin meeting.
He said Britain must prioritise jobs and future prosperity when Brexit negotiations kick-off next week.He said Britain must prioritise jobs and future prosperity when Brexit negotiations kick-off next week.
As we enter negotiations next week we will do so in a spirit of sincere co-operation taking a pragmatic approach to trying to find a solution that works both for the UK and for the European Union 27.As we enter negotiations next week we will do so in a spirit of sincere co-operation taking a pragmatic approach to trying to find a solution that works both for the UK and for the European Union 27.
My clear view, and I believe the view of the majority of people in Britain, is that we should prioritise protecting jobs, protecting economic growth, protecting prosperity as we enter those negotiations and take them forward.My clear view, and I believe the view of the majority of people in Britain, is that we should prioritise protecting jobs, protecting economic growth, protecting prosperity as we enter those negotiations and take them forward.
UpdatedUpdated
at 11.04am BSTat 11.04am BST
10.39am BST10.39am BST
10:3910:39
The poll below suggests other EU countries have no appetite to follow the UK out of the union:The poll below suggests other EU countries have no appetite to follow the UK out of the union:
After #Brexit, no desire amongst Europeans to follow Britain out the door. pic.twitter.com/NZ2NCHbgUTAfter #Brexit, no desire amongst Europeans to follow Britain out the door. pic.twitter.com/NZ2NCHbgUT
10.35am BST10.35am BST
10:3510:35
Former finance minister Yanis Varoufakis is not the only one sceptical about the Greek deal struck in Luxembourg last night.Former finance minister Yanis Varoufakis is not the only one sceptical about the Greek deal struck in Luxembourg last night.
Kit Juckes at Societe Generale also suggests it was an elaborate exercise in kicking the can down the road:Kit Juckes at Societe Generale also suggests it was an elaborate exercise in kicking the can down the road:
The politics of debt relief are too toxic to cope with so [Eurogroup president] Jeroen Dijsselbloem called for the tee, put the debt can on top of it, lined it up and kicked it straight between the posts and down the road behind. Then he declared it a ‘major step forward’ that would help put the Greek economy on a sounder footing. Job done.The politics of debt relief are too toxic to cope with so [Eurogroup president] Jeroen Dijsselbloem called for the tee, put the debt can on top of it, lined it up and kicked it straight between the posts and down the road behind. Then he declared it a ‘major step forward’ that would help put the Greek economy on a sounder footing. Job done.
I expect this to be greeted with muted applause by European bond investors, by which I mean peripheral debt should do fine and the currency won’t care.I expect this to be greeted with muted applause by European bond investors, by which I mean peripheral debt should do fine and the currency won’t care.
10.23am BST10.23am BST
10:2310:23
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10.09am BST10.09am BST
10:0910:09
Eurozone inflation slows to 1.4% in MayEurozone inflation slows to 1.4% in May
The eurozone’s headline rate of inflation in May has been confirmed at 1.4% by statistics office Eurostat, down from 1.9% in April.The eurozone’s headline rate of inflation in May has been confirmed at 1.4% by statistics office Eurostat, down from 1.9% in April.
Petrol prices and hotel stays were more expensive than a year earlier, while phone costs and clothing prices fell.Petrol prices and hotel stays were more expensive than a year earlier, while phone costs and clothing prices fell.
At 1.4%, eurozone is well below UK inflation of 2.9%. The sharp fall in the value of the pound since the Brexit vote has pushed up the cost of goods imported from abroad and is feeding through to higher shop prices.At 1.4%, eurozone is well below UK inflation of 2.9%. The sharp fall in the value of the pound since the Brexit vote has pushed up the cost of goods imported from abroad and is feeding through to higher shop prices.
UpdatedUpdated
at 10.12am BSTat 10.12am BST
9.58am BST
09:58
Greece has long hoped that a deal with creditors will pave the way to inclusion in the European Central Bank’s stimulus programme, in turn enabling a return the capital markets.
However, Athens will probably have to wait a while longer:
#ECB needs 'more clarity' on debt relief to buy Greek bonds https://t.co/VqlNhrYNJW
9.46am BST
09:46
Helena Smith
A spokesman for the Greek government has commented this morning on the deal struck between Athens and its eurozone lenders.
“Yesterday’s Eurogroup decision is a very positive decision which gives the Greek side what it wanted and the possibility to proceed with security until it completes the programme,” Dimitiris Tzanakopoulos told the radio station Real FM.
The agreement had laid out clear commitments regarding the country’s staggering debt pile and clear commitments regarding its growth, he said, commitments that would put it on the path to successfully exiting its third bailout programme in August 2018.
“We have before us a clear two-year period, in which we can change the image of Greece … We have a concrete goal. This goal is to complete the programme, for Greece to stand on its own feet,” he continued, adding that the government’s overriding aim was to free the country from the “harsh oversight” of international lenders keeping it afloat.
Despite the air of triumphalism in Athens this morning, prime minister Alexis Tsipras leftist-led coalition has come under heavy fire for wasting precious time haggling with creditors to get to this point. In the uncertainty wrought by nine months of stalled negotiations, the real economy has suffered tremendously as investors have stayed away.
9.32am BST
09:32
Varoufakis gives damning critique of Greek deal
Varoufakis has also updated his blog with an annotated version of last night’s Eurogroup statement on Greece.
Sceptical could probably sum up his view.
For example, his response to the Eurogroup’s statement that an end to the bailout programme in 2018 could pave the way for a Greek return to the capital markets, he writes:
A little like promising pigs that they will be offered flying lessons!
On Greece’s commitment to maintain a primary surplus of 3.5% until 2022, and about 2% from 2023 to 2060, he notes:
Put a little more clearly: the Eurogroup remains committed to an insane level of austerity (for this is what 3.5% of GDP means) until 2022.
After those further four years of mind and soul numbing recession, for those Greeks that remain in the country (and who have not migrated as a result of the utter misery the Eurogroup has spread all over the land), the austerity will be a little lessened until… 2060. (We are really experiencing levels of cynicism that have never been observed in Europe, or indeed anywhere else, before!)
The Annotated 15th June 2017 Eurogroup statement on Greece https://t.co/1xNT3RjmRn
9.09am BST
09:09
Yanis Varoufakis, Greece’s former finance minister, has given his reaction to the news that Athens has secured another €8.5bn in emergency funds.
Yesterday's Eurogroup statement reminded me of how nothing has changed, or will change, until Athens learns to say NO (and mean it) pic.twitter.com/YRfgAUAp9Y
8.53am BST
08:53
Greek stock market highest in two years
Greece’s ATG index has opened up 1.2% at the highest level since mid-June 2015.
Meanwhile the yield on Greece’s 10-year government bonds has fallen to 5.78% - the lowest level in almost a month - in another sign that investors are breathing a huge sigh of relief at the long-awaited and much-needed bailout deal.
Finally good news for Greece. It was well deserved.
Here is how events unfolded last night.
8.38am BST
08:38
European markets rise in early trading
Investors have a spring in their step this morning, boosted by the news that Greece clinched a bailout deal last night, averting a fresh crisis.
Here are the scores so far in Europe’s main markets:
FTSE 100: + at 0.3% at 7,445
Germany’s DAX: +0.4% at 12,739
France’s CAC: +0.8% at 5,259
Italy’s FTSE MIB: +0.5% at 20,959
Spain’s IBEX: +0.2% at 10,722
Europe’s STOXX 600: +0.5% at 388
The FTSE 250 - which includes companies focused more on the UK market than those in the FTSE 100 - is up 0.7% at 19,698 after the index suffered its biggest daily fall since last summer on Thursday.
8.24am BST
08:24
Tesco reports strong sales as it protects customers from full impact of inflation
Britain’s biggest supermarket chain says it has protected customers from the full impact of inflation.
Inflation is currently running at 2.9%, but Tesco has raised its food prices by just 1.4%. The sharp drop in the value of the pound since the Brexit vote a year ago has driven up the cost of goods and raw materials imported from abroad.
Consumers are increasingly feeling the pinch as inflation is higher than wage growth, currently running at 1.7% according to the latest official stats.
Tesco said that its decision to limit price rises was helping to drive sales, which rose 2.3% in the UK on a like-for-like basis in the first quarter, comfortably beating analysts’ expectations for a 1.9% rise. It was Tesco’s best quarterly UK growth for seven years.
Here is what Dave Lewis, Tesco’s chief executive, had to say:
In tough market conditions, we have stayed true to our commitment to helping customers - working closely with our supplier partners to keep prices low.
Customers have responded by doing more of their shopping with us and as a result we continue to grow volumes, particularly in fresh food.
This is a good start to the year, with our sixth consecutive quarter of positive like-for-like sales growth across the group. We are confident in our plans to create long-term, sustainable value for our key stakeholders and to deliver on the ambitions we have set out.
Tesco’s annual meeting will be held at 2pm today at London’s Excel centre.
Updated
at 8.25am BST
8.00am BST
08:00
Google faces €1bn fine from EU, FT says
The FT is reporting that Google could be fined more than €1bn as Brussels prepares to announce the first of its trio of antitrust decisions involving the global search engine giant.
EU officials are expected to say in the coming weeks that Google exploited its dominant market position to promote its other services - such as shopping and travel – in a way that was detrimental to the its rivals, the FT said. Google and the European Commission declined to comment.
Watch this space.
7.48am BST
07:48
Traders at spread-betting firm IG are expecting Europe’s main markets to open higher this morning:
Our European opening calls:$FTSE 7433 +0.19%$DAX 12718 +0.21%$CAC 5229 +0.23%$IBEX 10720 +0.19%$MIB 20941 +0.45%
7.44am BST
07:44
The agenda: Greece averts fresh crisis; eurozone inflation
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Investors will be relieved this morning as Greece finally managed to agree a deal with its eurozone creditors last night to unlock €8.5bn of urgently needed bailout funds.
The deal was clinched at the Eurogroup meeting of finance minsters, which is followed today by Ecofin, attended by ministers from the wider EU.
We will bring reaction to the Greek deal and any developments a Ecofin.
Here is our full story on Greece:
The economic data calendar is fairly thin, but with a couple of highlights:
At 10am we get final eurozone inflation figures for May. Economists are expecting a headline annual rate of 1.4%.
At 13.30 we get the latest snapshot of the US property market with housing starts figures for May.
Updated
at 7.45am BST