16.59 European stock markets, boosted by hopes of a further interest
rate cut by the European Central Bank, have managed to carry the
day’s strength into the close. The FTSE 100 has finished up 2pc at
6,406.12, the Cac 40 in France has jumped 3.6pc, Spain’s Ibex
has leapt 3.3pc and the German Dax is up 2.4pc.
Here is William Nicholls, a dealer at spread-betting firm Capital
Spreads, with his final thoughts on the day’s action :
will be a welcome relief to investors. Nervousness and downward sentiment
appears to have been entirely forgotten overnight as the FTSE finds itself
more than 100 points to the good this afternoon.
Speculation that the Eurozone may have to take early measures in order to
stimulate growth after some weak numbers across the board was a boost to the
UK – Europe being such a vital source of trade.
16.42 Portugal has issued a plan for growth in which it will aim to
increase exports to 50pc of GDP from current levels of 29pc, give businesses
more access to credit, and “significantly” reduce the country’s
corporation tax rate.
The government outlined the plans in a statement following a cabinet meeting.
Alvaro Santos Pereira, the country’s economy minister, added:
We want more investment and the main instrument here is the reform of the
company tax that we intend to carry out via a significant decrease in tax
rates to make investment more attractive [...] The tax decrease will have to
be gradual.
16.20 If you have more than €100,000 (£85,000) in the bank and you live
in a country that’s in danger of being rescued by international lenders,
listen up, because your savings probably aren’t safe.
The European Parliament’s lead negotiator on rules for dealing with failing
banks said that parliament would likely back legislation imposing losses on
wealthier depositors.
Gunnar Hokmark, a Swedish conservative, said most deposits would not be
protected under the proposals. But, he added:
Talks are underway to finalise EU rules on crisis-hit banks following the
bailout of Cyprus, in which the savings of all depositors were
originally going to be raided.
The plan was later changed amid a massive public backlash. The European
Parliament’s backing is needed for any proposals to become law.
15.44 The Swiss finance ministry has expressed its willingness
to explore the automatic exchange of banking information to support a
concerted battle against tax evasion, provided a global standard for
doing so is created, according to news agency Agence-France Presse.
A spokesman from the ministry told AFP that such a standard “must
encompass all the large American, European and Asian financial centres”
and insisted that Switzerland already lives up to its international
obligations in terms of combatting money-laundering, “unlike the
financial centres on the American continent and a number of offshore centres.”
Photo: Alamy
15.05 European shares are continuing to rise amid hopes that ECB
policymakers will cut interest rates in a bid to spur growth when they meet
next week following news that eurozone private sector activity continued
its steady decline in April (see 09.20).
The Cac 40 index in France is up 2.91pc, Spain’s Ibex has
climbed 2.94pc and the German Dax has gained 2.07pc.
London’s FTSE 100 has also kicked-on strongly and has risen 1.8pc so
far today.
Borrowing costs are also dipping to record lows on rate-cut speculation. The
10-year bond yield for French gilts fell to an all-time low of 1.074
earlier today. Spanish and Italian 10-year bond yields slid to
their lowest since November 2010.
The Dax has gained 2.07pc as investors bet on an ECB rate cut. Photo:
Reuters
14.55 Sixteen Asia-Pacific countires plan to start talks next
month on a regional free trade agreement that would cover more than
half the world’s population, according to news agency Agence-France Presse.
The so-called regional economic partnership (RCEP) covers the 10 members of
the Association of South-East Asian nations (ASEAN) – Brunei, Cambodia,
Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and
Vietnam – as well as Australia, China, India, Japan, New Zealand and South
Korea.
According to the latest draft of the chairman’s end-of-meeting statement,
obtained by AFP, ASEAN leaders will agree that “negotiations will
commence in May 2013 with a view to completing them by 2015.”
14.44 Stock market trading is underway in the US, with the positive
sentiment in Europe rubbing-off on dealers in the States. The Dow Jones
Industrial Average is up about 100 points, or 0.7pc, mirroring the moves
seen on this side of the pond: The FTSE 100 has jumped 1.8pc,
France’s Cac 40 is 2.9pc better, the Ibex in Spain has climbed
2.6pc and Germany’s Dax has leapt 2pc.
14.27 The Hungarian Central Bank has cut its interest rates
to a record low of 4.75pc in an effort to spur growth in the
recession-gripped country.
Hungary, an EU member state, saw its economy shrink 1.7pc last year.
14.15 US manufacturing expanded at its slowest pace since
last October, according to a key index. Markit
Economics’ flash manufacturing PMI for the US gave a reading of 52
in April, down from 54.6 in March. A figure over 50 indicates expansion.
The slower expansion was partly due to the weakest rise in new orders in
six months.
Chris Williamson, chief economist at Markit, said the reading reflected
the squeeze on domestic expenditure as households brace themselves for
tax increases and government spending cuts:
the U.S. manufacturing expansion is losing momentum rapidly as businesses
and households worry about the impact of tax hikes and government spending
cuts. The PMI suggests that output growth has slowed from an annual pace
approaching 8% earlier in the year to only 2% at the start of the second
quarter.
While this week’s first quarter GDP numbers may therefore bring some
brighter news on the economy, the picture looks to have already begun to
darken again, with GDP growth set to weaken in the second quarter.
Exports remain a bright spot, rising at the fastest rate since December,
but a weakening of demand from domestic customers meant overall order books
showed the smallest increase since October. With backlogs of work falling at
one of the fastest rates since the height of the financial crisis, firms
will also look to cut headcounts soon unless demand improves in the coming
months.
From a policy perspective, a marked easing in inflationary pressures is
signalled in manufacturing supply chains, which should take further heat out
of consumer price inflation.
13.50 Irish finance minister Michael Noonan said the nation
should not expect a “spending spree” despite the government being
granted extra breathing space by its lenders this year.
He said Ireland will invest in its economy if it has the capacity to do so
once its troika-imposed targets are met.
In February Ireland
clinched a deal to liquidate Anglo Irish Bank and repay the debt over a
longer period of time to ease the burden on Irish taxpayers.
Speaking to reporters today, Mr Noonan said:
programme and stick to the targets in the programme.
Having done that, if there is spare cash around, we should use that money
for investment purposes to grow the economy and get people back to work. We
shouldn’t, just because we are making progress, go on some sort of spending
spree.
Irish finance minister Michael Noonan. Photo:Getty
13.32 The Bank of England’s Ian McCafferty has admitted that the
UK recovery has been “lethargic” but said he remained hopeful for
a “modest pick-up” this year.
In a speech
at a conference on women in business, in Coventry, he pointed out that if
GDP was adjusted to strip out particularly sharp falls in construction and
North Sea oil output, then the rest of the economy, which accounts for
more than 90pc of GDP, grew by 1.2pc last year.
He argued that credit conditions are improving, partly thanks to the Funding
for Lending Scheme, business sentiment is picking up, and that the
international outlook is improving amid signs that the slowdown in China is
ending and the US recovery is gaining momentum.
Mr McCafferty, who is a member of the Bank’s rate-setting committee,
concluded:
some time. Of course, there remain substantial risks that may still knock us
off course, not least from the challenges facing the euro area, and if
required, the MPC stands ready to respond.
Ian McCafferty, Monetary Policy Committee member at the Bank of
England.
13.11 Rebecca Clancy has the full story on the latest
wave of HSBC job cuts.
13.07 Poor eurozone services and manufacturing data out today is
spurring hopes of an interest rate cut by the European Central Bank next
week. That’s helping stock markets make healthy gains this afternoon, as are
falling sovereign bond yields among Europe’s peripheral nations. The Cac
40 index in France is up 2.3pc, Spain’s Ibex has climbed 1.9pc
and the German Dax has gained 1.3pc. London’s FTSE 100 has
also kicked-on strongly and has risen 1.3pc so far today.
13.00 Meanwhile infrastructure minister and former head of the Olympics
organising committee, Lord Deighton, has warned that pouring
money into building projects is no silver bullet for the UK economy.
Speaking at the City Week conference today, he said sovereign wealth funds
are ‘lining up’ to invest in the UK but the Government has so far failed to
make major projects ‘financeable’.
very very short term, the reality is this is stuff you need to get right
over 5, 10, 15, 20 years.
It has the convenient short-term characteristic of stimulus but you can’t
manage it like that.
Economics editor Philip Aldrick has the full story here.
Lord Deighton received his knighthood following the 2012 Games, for
which he headed up the organising committee. Photo: Rex Features
12.45 HSBC is to axe 1,149 British jobs in another round
of redundancies to save money and slim down the bank.
It said 3,166 UK jobs would be affected by the latest wave of cuts, but that
it expects to re-employ just over 2,000 of the staff.
The cuts will mostly come from wealth management, as the bank trims down this
side of operations to focus on retail banking.
12.30 Energy giant EDF has announced it is cutting jobs at
its Hinkley Point C site in Somerset.
The company is in the throes of negotiations with the government over its proposal
to build the first new British nuclear plant in a generation, with EDF
seeking a guaranteed minimum price per unit of electricity to ensure
profitability of the project.
It said it was axing jobs to “control costs”, adding that “much
activity including further detailed pre-construction engineering work will
continue ahead of the later construction phase.”
But the move has raised questions over whether EDF is piling pressure on the
government to bow to demands over the figure to be put on the minimum price
guarantee.
12.20 In an investor vote of confidence for the French economy,
ten-year borrowing costs have dropped to a record low. French 10-year
bond yield is currently 1.074pc.
Photo: PA
12.16 As expected, company earnings are having a big impact on
individual stocks today, with both ARM and Associated British Foods
receiving a boost from their well-received numbers. With the deluge of
results only going to get heavier as the week progresses, equity strategists
at UBS have taken a look at what the earnings season may hold for
companies across Europe:
companies reporting. Q4 was actually the worst reporting season for six
quarters in terms of net positive surprises. We suspect Q1 will also be
relatively weak: global PMI’s were higher in Q1, but for the first time in
18 months the euro is no longer a tailwind. The recent sharp fall in
commodity prices has happened too late to impact the Q1 numbers, but will
obviously be in the guidance for commodity producers.
12.06 Another boost to George Osborne, in addition to news that
public borrowing fell this year, came this morning as Lloyd
Blankfein, the chief executive of investment bank Goldman Sachs, encouraged
the Chancellor to “stay the course” on austerity.
Mr Blankfein told Radio 4′s Today programme that Britain had invested a lot in
austerity and should “stay the course a little longer”.
He said “it was very tough” for the Chancellor, and he could see why
at this point in the cycle there were calls to “relax the throttle”
and extend austerity for longer.
Martin Strydom has the full story here.
Chief executive of Goldman Sachs Lloyd Blankfein, who urged Osborne to “stay
the course” on austerity. Photo: AP
11.55 Spain’s economic contraction slowed down in the first
three months of this year, according to the latest bulletin from the
country’s central bank.
Spanish GDP fell 0.5pc in the first quarter, after dropping
0.8pc, the steepest fall in three years, between October and December last
year.
Spain’s economy shrank at a slower pace in the first quarter of 2013.
Photo:AP
11.46 In Italy, borrowing costs have fallen to their lowest in
nearly two and a half years amid hopes of political stability following the
re-election of Georgio Napolitano as president. Ten-year bond yields fell as
low as 3.969pc on Tuesday, falling below 4pc for the first time since
November 2010
Giorgio Napolitano, who was given an unprecedented second term as
president after being re-elected last week. Photo: AFP/Getty Images
11.40 Economist Howard Archer of IHS Global Insight does
not see UK factory orders picking up any time soon. Reacting to the surprise
fall in factory orders according to the CBI index, he said:
survey broadly reinforces the view that the sector still faces tough
domestic and international conditions that are likely to constrain activity
in the near term at least.
Domestic demand for manufactured goods is handicapped by current muted
investment intentions and tightening public spending. Furthermore,
consumers’ purchasing power has come under renewed pressure from a move back
up in inflation to a 2.8% in March (from 2.2% last September) and muted
earnings growth.
On top of this, a still uncertain and difficult economic environment is
likely still causing some orders to be delayed or even cancelled. Meanwhile,
relatively muted global economic growth, and Eurozone economic weakness in
particular, is currently still a constraint for foreign demand for UK
manufactured goods.
11.30 With the FTSE 100 continuing to strengthen this morning –
the benchmark index is now up 51 points, or 0.8pc, at 6,332 – David Madden,
market analyst at spread-betting company IG, is looking ahead to the factors
that are likely to influence trading in the US. Disappointing company
results are expected to weigh on investor sentiment across the pond:
fall in earnings from heavy machinery manufacturer Caterpillar continues to
weigh on investors’ minds. Tech giant Apple reports its earnings after the
close tonight, with investors already gearing themselves up for a drop in
profit for the first time in over a decade.
Caterpillar, the maker of heavyweight earthmovers and a bellwether of
the global economy, reported a sharp drop in quarterly profits on Monday,
hit by the slowdown in mining.
11.20 Falling demand has led to a surprise fall in UK factory orders
for March, according to the latest data from the Confederation of
British Industry (CBI).
The CBI’s index of new factory orders fell to a two-and-a-half year low of
minus 25, from minus 15.
Stephen Gifford, the CBI’s director of economics, said:
This quarter was a mixed bag for manufacturers, with new orders disappointing
because of a decline in domestic demand, but output did increase.
Although weaker sterling has eased concerns about international
competitiveness, manufacturers highlight the potentially chilling effect of
political and economic instability abroad on export orders, such as the
Cyprus crisis.
11.15 For the full story on the shock
contraction in the German private sector from our Berlin
correspondent Jeevan Vasagar, read here.
The contraction in Germany was attributed by Markit economist Tim
Moore to clients cutting spending amid concern about the outlook for
southern Europe.
11.07 More from the Cypriot finance minister, who also told
Reuters that a sell-off of the island’s gold reserves was “not a
priority”, and could even be averted if alternative sources of
fundraising are found.
Cyprus must find €13bn itself, with only €10bn provided by the EU and IMF.
We shall do whatever it takes, we shall meet all fiscal targets. I am sure we
shall succeed in gathering the amounts which remain our responsibility in
order to avoid any need to come back with a new (adjustment) programme.
So long as we are able to meet the financial element of our commitments I
think all possibilities should be explored and they will be explored.
The same applies not only for that particular issue but the whole framework
of our commitments. What I feel it is necessary to repeat is our commitment
for fulfilling everything without hesitation.
Harris Georgiades replaced Michalis Sarris last month after the former
finance minister resigned just a few weeks into office. Photo: AP
10.41 Cypriot finance minister Harris Georgiades has said he
believes the island’s divided parliament will approve the bail-out deal,
having already approved most of the bail-out terms, such as increasing
corporate tax, spending cuts and tax increases in separate votes.
In a shock announcement last week, the
island’s government declared that the rescue package will be put to the vote
by its 56 member parliament, nearly half of whom are considered
likely to oppose the deal, a rejection of which would plunge the island into
a fresh crisis.
Speaking to Reuters, Mr Georgiades said:
I think parliament will acknowledge there is no alternative at this point.
10.30 Shares in the Greek gambling monopoly OPAP fell
this morning after the government rejected the only valid bid to seek a
higher offer.
Emma Delta, a Greek-Czech investment fund, made a €622m bid,
undervaluing OPAP by around 16pc based on its closing price on Monday.
The sale forms part of a mass sell-off of Greece’s state assets, which
have a troika-imposed target of raising €2.6bn this year. OPAP is
supposed to account for a large part of that target and any shortfall
would mean that the EU and the IMF would need to stump up more money to
cover Greece’s funding needs.
Shares in OPAP fell as much as 5.37pc on the Athens Stock Exchange
this morning.
10.18 Back in the London stock market, analysts at heavyweight broker Goldman
Sachs have brought pressure to bear on cash-and-carry wholesaler Booker
by cutting their rating on the FTSE 250 group to “neutral” from “buy”. The
Goldman experts reduced their stock recommendation on the company, which
last year bought Metro’s cash and carry business Makro for £140m, on
valuation grounds after Booker shares made significant gains over the past
year:
it as a well positioned company within UK food retail, the shares now trade
at a 65pc premium to the European food retail sector (ex-Ocado). We feel
this fairly captures the growth opportunity from the ongoing integration of
the Makro business over the next three to four years.
The cautious appraisal from Goldman has sent Booker shares sliding 2.1pc,
among the heaviest fallers on the mid-cap index.
10.07 Revisiting the public finance figures, it’s worth noting
that even stripping out cash transfers from the Bank of England,
borrowing still fell, albeit only slightly.
After removing the effects of the transfer of the Royal Mail Pension Plan and
the transfers from the Bank of England Asset Purchase Facility the first
2012/13 estimate of public sector net borrowing is £300m lower than
last year’s borrowing at £120.6bn.
George Osborne is already two years behind schedule on wiping out the
budget deficit. Photo: PA
09.52 On the FTSE 250, exploration group Premier Oil is
in demand and has risen 3.3pc on news of an two discoveries: an oil find
at the Bonneville exploration well and its side-track in the North Sea, and
a gas discovery at the Matang-1 well in Indonesia. The company also
pleased investors by confirming that testing at its Luno II well in Norway
has started, with results due before the end of April. This is what chief
executive Simon Lockett had to say this morning:
programme with the previously announced discovery at Luno II and now the
discoveries at Bonneville and Matang. We look forward to the outcome of the
test programmes at Luno II and Matang while the Bonneville discoveries will
be tied back to our important Catcher area development, which is targeted
for project sanction by year-end.
Looking at the broader picture, the benchmark FTSE 100 remains in
positive territory and is now up 25 points.
09.50The news will come as a huge relief for the embattled Chancellor,
who this week faced calls from IMF chief economist Oliveir Blanchard to
rethink his austerity programme.
Also last week IMF chief Christine Lagarde admitted that UK growth was “not
good”, hinting that Osborne could be pressed to abandon ‘Plan A’
following the Fund’s annual ‘Article IV’ review of the economy.
Osborne is already at least two years behind schedule on his deficit
reduction plan. When he became Chancellor in 2010 he pledged to wipe out
Britain’s budget deficit by 2014/15, but by his latest reckoning this
will not happen until 2016/17.
09.34 The latest UK
public finance data from the ONS shows that Britain’s budget
deficit fell slightly last year. Public borrowing, excluding some of the
effects of bank bail-outs and a boost from Royal Mail pension assets, was £114.2bn
in 2012/13.
09.27 Chris Williamson, chief economist at Markit, warned that
April’s reading could point to a hastening decline in GDP in the
second quarter of the year. He said:
worrying weakness in the economy at the start of the second quarter, with
signs that the downturn is more likely to intensify further in coming months
rather than ease.
Thanks to an upturn in the survey at the start of the year, the PMI
suggests that euro area GDP fell by around 0.2-0.3pc in the first quarter
after a 0.6pc drop at the end of last year. However, the April reading
points to a 0.4pc rate of decline, with downside risks. Worryingly, the rate
of loss of new business gathered further momentum, suggesting that activity
and employment could fall at steeper rates in May.
The renewed decline in Germany will also raise fears that the region’s
largest growth engine has moved into reverse, thereby acting as a drag on
the region at the same time as particularly steep downturns persist in
France, Italy and Spain.
Policymakers will at least be relieved to see inflationary pressures
cooling, which could further open the door to renewed policy stimulus.
09.20 Eurozone private sector activity continued its steady
decline in April, according to preliminary data from Markit. The composite
PMIfor the 17-nation bloc held steady at 46.5 in
April, indicating that activity is falling but at the same rate as in
March.
The reading is the 19th sub-50 figure – which signals contraction – in 20
months, the exception being a marginal increase in January 2012.
09.10 Power systems company Rolls Royce has announced the sale of its
50pc stake in the RTM322 helicopter engine programme, which powers
the Apache, EH101 Merlin and NH90 choppers, to Safran-owned Turbomeca
for €293m.
The Apache helicopter, powered by the RTM322 engine.
09.00 Chief business correspondent Louise Armitstead previews
the day ahead in business in her city briefing (sign up for the morning
email here).
The National Statistics office is due to release the latest figures on
public sector finances, including crucial Government net borrowing and
debt. The CBI is releasing its quarterly industrial trends survey.
Mark Carney, who becomes Governor of the Bank of England in July, is
being grilled by Canada’s parliamentary standing committee on finance.
Later in America, Apple is releasing its results for the second
quarter. The tech giant is under pressure to perform after its shares
dipped below $400 last week for the first time since 2011 amid concerns that
the shine is coming off the stockmarket darling. Wells Fargo is due
to report its full year results.
The City Week financial services forum continues in London. Yesterday
the European Union was charged with over-regulation amid criticism of its
plans for a Financial Transactions Tax (FTT) and half-formed banking union.
Today there’s a focus on infrastructure and trade with
speakers including Lord Green, the Trade Minister, Jim O’Neill,
the chairman of Goldman Sachs Asset Management, and Xavier Rolet, the
boss of the London Stock Exchange.
The Treasury Select Committee is taking evidence on the impact of Quantitative
Easing; the House of Lords Economic Affairs Committee has a
hearing on corporate taxation, including evasion; and Andrea
Leadsom MP is leading a Hansard Society debate on the “EU and
democratic deficit”.
Mark Carney, incoming governor of the Bank of England, will appear
before Canada’s parliamentary standing committee on finance.
08.57 Among the movers and shakers on the FTSE 100 are shares in Associated
British Foods, the sugar-to-clothing conglomerate, which have put on
1.2pc after the group reported impressive first-half numbers. ABF posted a
25pc jump in first-half adjusted pre-tax profits, helped by the performance
its popular Primark chain which saw a 24pc rise in overall sales and
a 7pc rise in like-for-like sales. Here is what Panmure Gordon
analyst Graham Jones thought of the results:
tax rising by 25pc to £452m and earnings per share up 22pc to 39.9p, 7pc and
5pc ahead of our forecasts respectively. Primark was the undoubted star of
the show, with sales rising 24pc and profits rising by 55pc.
[...]The shares have been the best performer in our coverage universe over
the past 12 months, outperforming the UK market by 37pc. That said, we think
the attractions of the stock remain and we nudge up our price target from
1750p to 1800p.
08.55 Markit economist Tim Moore, on the lower-than-expected
German PMI figures, said:
The latest figures suggest any rebound in GDP over the first quarter could be
rather short-lived, not least as the manufacturing and service sectors both
recorded faster declines in new orders than one month earlier.
Weaker demand was attributed to subdued business confidence across the euro
area, with clients cutting spending amid concerns about the economic outlook
for southern Europe. In the manufacturing sector, there were also reports
that destocking efforts had led to reduced production requirements.
Meanwhile, lower purchasing activity and softer global demand for raw
materials helped alleviate strains on supplier delivery times and this
contributed to another sharp drop in input costs across the manufacturing
sector.
Germany’s manufacturing PMI fell in April to 47.9 from 49
08.50 And in Germany, April’s composite private sector PMI
– comprising services and manufacturing – gave a reading
under 50, indicating contraction, for the first time since November.
Composite PMI fell to 48.8 from 50.6 in March, reflecting
a fall in both manufacturing PMI, which fell to 47.9 from 49,
and services PMI, which dropped to 49.2 from 50.9.
The decrease in manufacturing production was the first so far in 2013,
while the drop in service sector activity was the first in five
months and the most marked since October.
08.42 This morning a raft of flash PMIs from across the world will
be released.
The French figures are out and show that the downturn in the country’s
private sector eased off in April, though it is still shrinking. Its
composite PMI rose to a four-month high of 44.2 from 41.2 in March. Any
figure under 50 signals contraction.
08.15 Share trading is underway in London and it’s been a slow start,
with the FTSE 100 edging up just 10 points to 6,290.89. Nevertheless,
shares in chip designer ARM Holdings are standing out from the crowd
with an impressive 7pc gain. Traders have been enthused by the blue-chip’s
first-quarter numbers, which showed a 44pc jump in adjusted pre-tax profits
to £89.4m. The number of chips shipped climbed 35pc to 2.6bn.
08.05 In corporate news, Primark-owner Associated British Foods
has posted a strong set of first half results, largely driven by the
clothing retailer, but warned that it expects slower growth in the second
half.
Profit before tax rose 26pc to £415m in the 24 weeks to
March 2.
In his half year results statement, AB Foods’ chairman Charles Sinclair
said:
The Primark success story continues. Trading in the period was very strong,
the profit margin was much improved, customers in continental Europe have
taken enthusiastically to the Primark brand and there is very real momentum
in the addition of selling space. Encouraged by this success, capital
investment will continue.
07.50 The Organisation for Economic Co-operation and Development
(OECD) said on Tuesday that it supported Japan’s efforts to fight deflation,
but urged Tokyo to address its massive debt pile.
Randall Jones, a senior economist at the OECD, also said it was too difficult
to predict when the Bank of Japan will meet its 2pc inflation goal, a target
which the new governor Haruhiko Kuroda is determined to hit within
two years. Mr Jones said a three-year timeframe would be acceptable.
In its annual report on the Japanese economy, it said:
Ending 15 years of deflation is a priority. The new government’s resolve to
revitalise the economy through a three-pronged strategy combining bold
monetary policy, flexible fiscal policy and a growth strategy, is most
encouraging
[But] stopping and reversing the rise in the debt-to-GDP ratio is crucial.
07.30 Asian markets fell overnight following news that manufacturing
activity in the world’s second biggest economy slowed in April as
exports were hit by sluggish overseas demand, according to a key index.
Markit’s preliminary manufacturing purchasing manager’s index gave a
preliminary reading of 50.5 in April, down from 51.6 in April, showing that
while the sector is still growing, that the pace has slowed. Any reading
over 50 indicates expansion.
The figures will exacerbate concerns about the strength of the Chinese
economy, coming just a week after China revealed weaker-than-expected GDP
growth figures showing that expansion slowed in the first three quarters of
the year.
Hong Kong’s Hang Seng has fallen 1.14pc and the Shanghai
Shenzhen CSI 300 index is down 2.79pc. The Shanghai Composite
has dropped 2.17pc. The Nikkei dropped 0.29pc, breaking
a rally which saw it climb just shy of a five-year high on Monday morning.
Commodities prices also edged down following the news. Brent crude
slid back below $100 per barrel, while copper extended its
decline to hit an 18 month low. Copper for three-month delivery on
the London Metal Exchange fell as low as $6,845 a metric tonne.
07.10 Our business pages lead with news that German Chancellor Angela
Merkel has stressed that “Europe must have the last word” on
some policy issues as she declared that eurozone nations should be prepared
to cede sovereignty in some policy areas if the continent is to avoid
decline.
Louise Armitstead and Louisa Peacock report that the
newly enthroned Archbishop of Canterbury, Justin Welby, has called for
Britain to “break up” one of its biggest banks to create a series
of regional lenders. He said the high concentration of financial
institutions in London was one of the “great dangers of the current mess”.
Alistair Osborne reports on news that the government
has finally put its one-third stake of uranium enrichment firm Urenco on the
block with a price tag of up to £3bn.
And Roland Gribben writes that Rupert
Murdoch has settled his long-running dispute with News Corp shareholders
over the phone-hacking scandal and the acquisition of Shine studios
for $139m (£91m).
Plaintiffs first sued in March 2011 over News Corp’s acquisition of
Shine Group, a company owned by chairman Rupert Murdoch’s daughter. Photo:
Getty Images
07.05 And over in the business pages…
The Financial Times reports that the
EU has clashed with the Federal Reserve over rules requiring US subsidiaries
of European banks hold more capital against their liabilites. Michel
Barnier, The EU Commissioner for financial services, warned Ben Bernanke,
Federal Reserve chairman, that the plans could risk “a protectionist
reaction”.
Its Companies and Markets section leads with news that Gary
Gensler, head of the Commodity Futures Trading Commission in the US, has
demanded that Libor borrowing rates be replaced as soon as possible “to
restore market integrity and promote financial stability”.
The Independent leads with news that Vince
Cable is on a mission to save British pubs. The Business Secretary
is planning to unleash a new code of practice, backed by a “powerful”
watchdog to protect tenant landlords from being “overcharged” for
beer and rent.
The Times also leads on the business
secretary’s plans to stamp out the “unfair practices” of the big
pub companies, noting that the moves could save independent
publicans up to £100m a year.
The Guardian reports that trade unions will fight the government’s
privatisation of Royal Mail. Frances O’Grady, the general secretary of the
Trades Union Congress, which represents 53 trade unions and nearly 6 million
union members, told the Guardian that the British public are “overwhelmingly
against privatisation”.
07.00 A quick look at today’s front pages…
We lead with news that the government is weighing up proposals for hotels to
provide hospital accommodation in a bid to tackle ‘bed blocking’. An idea
borrowed from Scandinavia, the beds would be used by patients who do not
need specialist equipment but are not well enough to return home.
The Guardian reports that teenage Boston bombing suspect Dzhokhar Tsaranev
could face the death sentence if found guilty.
The Independent leads with news that MPs have called for Google boss
Eric Schmidt to be stripped of his role as government adviser after he
suggested that his company’s contribution to the British economy was more
important than how much tax it paid.
The Times reports that MI5 and MI6 chiefs have warned the government
that public safety will be put at risk if their departmental budgets are cut
any further.
06.55 Good morning and welcome to our new daily business and markets
live blog, your one stop shop for all the breaking business stories of the
day.
Business news and markets: as it happened April 23, 2013
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