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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden (until 2.15) and Nick Fletcher

UK inflation rate falls to 0.3%, but US prices jump – as it happened

The cost of flying fell in April, as operators cut prices after the Easter holidays
The cost of flying fell in April, as operators cut prices after the Easter holidays Photograph: Gareth Fuller/PA

Another volatile day for global markets

Further rises in the oil price gave some support to stock markets in early trading, but with crude falling back during the course of the day, and renewed talk of US rate rises after stronger than expected data, the initial gains soon went into reverse.

A late rally in oil - Brent crude is now up 0.98% at $49.45 a barrel having fallen as low as $48.57 - has seen shares come off their worst levels, but it was still another unpredictable day for investors. The final scores showed:

  • The FTSE 100 finished up 16.37 points or 0.27% at 6167.77
  • Germany’s Dax dropped 0.63% to 9890.19
  • France’s Cac closed 0.34% lower at 4297.57
  • Italy’s FTSE MIB fell 1.34% to 17,498.88
  • Spain’s Ibex ended up 0.19% at 8698.7
  • In Greece, the Athens market added 0.95% to 626.37

On Wall Street, the Dow Jones Industrial Average is currently down 89 points or 0.5%.

On that note, it’s time to close for the evening. Thanks for all your comments, and we’ll be back tomorrow.

Fed presidents: June is live meeting, could see 2-3 rate hikes this year

Adding to the renewed expectation of a Federal Reserve interest rate hike next month with further rises to come:

Here’s the Guardian’s Jana Kasperkevic to sum up the comments:

Speaking at a POLITICO event this afternoon, Atlanta Fed president Dennis Lockhart and San Francisco Fed president John Williams would not rule out a June interest rate hike.

June meeting “certainly could be” a meeting where action is taken, said Lockhart. He pointed out that every meeting is live. “I wouldn’t take it off the table,” he said of a June interest rate hike, adding that “markets are more pessimistic than I am”.

Williams echoed that all meetings are live, adding that more data will be released before the June meeting.

Both Williams and Lockhart, who are not voting members of Fed’s policy-setting committee, said there is a possibility of two to three rate hikes this year.

As for the Brexit vote, which takes place about a week after Fed’s next meeting, the Fed will have to determine if it could have an impact on the US economy, said Lockhart. Williams pointed out that if there is too much uncertainty in mid-June, the Fed does meet again six weeks later and could delay raising interest rates until then.

Updated

Dennis Lockhart and John C. Williams from the US Federal Reserve are currently discussing the US economy at a Politico event which you can watch here.

Lockhart and Williams
Lockhart and Williams Photograph: Politico

Updated

Eurogroup head Jeroen Dijsselbloem has said the IMF needs a political deal on Greek debt.

The latest US data suggests a rate rise is likely before long, according to Harm Bandholz, chief US economist at UniCredit Research. He said:

The US economy is rebounding nicely in the second quarter. Most recent numbers for April have even exceeded our above-consensus expectations...

Federal Reserve officials across the board – i.e. hawks and doves – have highlighted repeatedly that every FOMC meeting is a live meeting and that the policy decision is completely data dependent. We understand that one (or even two) swallow(s) don’t make a summer. But the latest round of data was as good as it gets. Second quarter 2016 GDP growth is now tracking at close to 3%, and the first quarter 2016 figure is bound to be revised up to 1% from the initially reported 0.5%. With inflation moving higher and financial markets much calmer, we will soon find out whether the emphasis of the data-dependency is more than a lip service. We continue to expect two to three rate hikes for this year, and are thus at odds with financial markets, which have barely priced in a single hike in 2016.

Back with Greece, and ahead of the latest weekend vote in the country’s parliament on the latest reform proposals and next week’s Eurogroup meeting, the International Monetary Fund reportedly wants its debt to be suspended until 2040.

Debt relief is one of the key issues the country’s creditors have to resolve, and there have been concerns that the IMF would withdraw from the process if there was no satisfactory agreement. But the Wall Street Journal is now reporting:

The International Monetary Fund is pressing the eurozone to let Greece skip paying interest or principal on bailout loans until 2040, say officials familiar with the talks.

The IMF wants the loans to Greece to fall due gradually in the following decades, and as late as 2080, according to the IMF’s proposal—a demand that goes far beyond what Greece’s European creditors, particularly Germany, have said they are willing to do to help Greece regain its financial health.

Greece’s interest rate on eurozone loans would be fixed for 30 to 40 years at its current average level of 1.5%, with all interest payments postponed until loans start falling due, under the IMF proposal.

Greece wants to settle the debt issue at Tuesday’s Eurogroup gathering, according to Reuters, with a government spokeswoman quoted as saying the IMF’s views on debt relief were “always in the right direction.”

Reuters also quotes a senior EU official expressing confidence the IMF will be part of the Greek reform review, adding that eurozone ministers are working on a debt deal that would satisfy both the eurozone and the IMF’s requirements.

But that will not be so easy. As the Wall Street Journal reports:

The IMF is also at odds with eurozone authorities and Greece’s government over how to ensure Athens hits its budget targets. But Greece is expected to pass the bulk of the fiscal measures creditors want from it by next week. The crucial fight is now among the creditors. “Greece is basically out of the picture,” says another European official. “This is a dialogue between the IMF and the countries that really want the IMF.”

Christine Lagarde, head of the International Monetary Fund
Christine Lagarde, head of the International Monetary Fund Photograph: Kamran Jebreili/AP

Updated

Wall Street opens lower

The latest US data showing higher inflation and better than expected industrial production has added some impetus to the idea that the Federal Reserve may, after all, decide on a rate hike next month.

And that has been enough to send US markets lower in early trading. The Dow Jones Industrial Average is currently down 74 points or 0.44% after Monday’s gains, while the S&P 500 and Nasdaq are also lower.

The weakness in the US has helped knock European markets lower, with the FTSE 100 now up just 8 points and Germany’s Dax and France’s Cac both around 0.6% lower.

The recent recovery in oil prices comes amid interruptions in supply from Canada, Nigeria and elsewhere, as analysts at Goldman Sachs pointed to a dramatic cut in stockpiles.

But not everyone agrees. Ben Combes at independent economic group Llewellyn Consulting said:

Weekly fluctuations in [US] stocks by 4 or 5 million barrels need to be viewed in perspective. A broader sweep of history reveals that US oil stocks have been rising since 2008, and sharply so over the past year or so. Stocks are at their highest since the 1980s. One week’s data – e.g. last week’s 3 mb draw, perhaps reflecting recent interruptions in Canada and Nigeria – risks missing something of potential strategic significance: the supply glut seems persistent.

There are many potential reasons why stocks are trending upwards: weak final demand; stronger than expected supply; companies building inventories at ‘low’ prices in expectation of rising prices further out. But stocks seem unlikely to remain at such elevated levels indefinitely.

US oil stocks
US oil stocks Photograph: US Energy Information Administration

The main reason for the oil price halving in 2014, and again in 2015, was the basic global imbalance of supply and final demand: supply was, in certain months, running as much as 2m barrels a day in excess of final demand (the gap being global stock building). Such excess supply suggested that a rebalance, through the price mechanism, was inevitable. Many posit, not least given recent interruptions, that rebalancing has now run its course, and that prices stand to rise, perhaps markedly, hereafter. US stock levels, however, might well suggest otherwise. The process could be far from over.

If the market is yet to rebalance fully, the implications for the price of oil seem clear: the market may not have yet reached its low. Moreover, any rise in price might encourage further stock building, delaying rebalancing, and resulting eventually in a larger price correction.

To the extent that oil stocks continue to rise, the more the oil price stands eventually to fall.

More US data, showing better than expected industrial production in April.

Industrial output rose by 0.7% compared to forecasts of a 0.3% rise, with output from utilities bouncing back after a warmer than expected March.

US factory output climbed 0.3%, in line with expectations, with good gains in machinery and car manufacturing.

Is June rate hike back on the agenda?

The Federal Reserve building in Washington.
The Federal Reserve building in Washington. Photograph: Kevin Lamarque/Reuters

Could the US Federal Reserve take the plunge and raise interest rates at next month’s meeting?

Rob Carnell of Dutch bank ING reckons the odds of a June hike are growing, following today’s jump in inflation.

Such a hike would surprise the markets, though, as Carnell explains:

Comments from Fed speakers over recent months have reiterated that June is a “live” month, and that two rate hikes look a reasonable prospect for 2016. But financial markets have been pricing in a far flatter curve for the Fed over the coming year. Today’s inflation data is a clarion call for a market rethink on the Fed.

In our view, the Fed has been waiting for the perfect mix of benign financial conditions, inflation heading in the right direction, and some evidence that real activity is picking up after a very soft first quarter. And although the latter condition is still debatable, decent retail sales data released last week certainly puts 2Q16 on a firmer footing as far as activity is concerned. This better run of activity data now needs to be maintained through to the June FOMC meeting, which is not by any means a given, But a June rate hike cannot be ruled out, and we will be looking at our house forecast for a 3Q16 hike as data continues to come in, to see if we need to bring this forward to June.

David Morrison of City firm SpreadCo reckons the Fed will sit tight while the battle for the White House rages:

According to the Fed funds futures there’s just around a 4 percent chance of an increase in June. Nevertheless, there remains a view that the Fed could still raise rates twice this year. However, that would suggest a move in September which is dangerously close to the Presidential Election.

It seems reasonable to assume that the Fed wouldn’t want to shift rates in either direction before the election. If it did, then it runs the considerable danger of being labelled partisan – particularly as this is shaping up to be a particularly vicious contest.

US average hourly earnings drop

Today’s inflation figures also include bad news for American workers.

Real average hourly earnings actually shrank by 0.1%, once you adjust for the rising cost of living.

That’s because average earnings rose by 0.3% in April, which was more than wiped out by the 0.4% jump in the Consumer Price Index.

Real weekly earnings rose by 0.2%, though -- because employees actually worked more hours than in March.

This jump in US inflation is going to reignite talk about another hike in US interest rates....

US inflation rate jumps

The US flag.

Breaking: Prices in America have risen at their fastest rate in three years.

The latest US inflation data, just released, show that consumer prices rose by 0.4% during April alone - the biggest one-month gain since February 2013.

That pushed the annual inflation rate up to 1.1%, from 0.9% – much faster than the UK’s lacklustre 0.3%.

Importantly, core inflation (excluding energy and food) rose by 0.2% month-on-month, and was 2.1% higher on an annual basis. That’s slightly higher than the Fed’s target for headline inflation.

Updated

Larry Elliott: Expect more sluggish inflation

Our economics editor, Larry Elliott, reckons the cost of living in the UK will remain subdued through this year:

The assumption among many City economists is that inflation will rise steadily in the second half of the year, putting interest rate increases from the Bank of England back on the agenda. They expect an unwinding of the sharp fall in energy prices in late 2015 coupled with a rebound in activity once the threat of Brexit is out of the way to nudge the monetary policy committee into action.

These forecasts should be taken with a pinch of salt. Inflation is low and the economy was weakening even before the government announced the date of the referendum in late February. There will probably be a bit of a bounce in the third quarter if, as seems likely, the decision on 23 June is to stay in the EU. But there is more chance of the economy stalling than there is of a boom. That will keep inflationary pressure in check and should make the Bank cautious about raising rates.

Here’s his analysis of today’s figures:

Oil rally falters

The pressure of smashing through the $50 per barrel mark for the first time this year has proved too much for the oil price.

This morning’s rally has fizzled out, and Brent crude is now trading at just $48.74 per barrel.

Carsten Fritsch, analyst at Commerzbank, reckons oil will have another charge higher soon, though:

“I expect prices to take a shot at $50. The outages in Canada and Nigeria alone are probably enough to leave the global oil market undersupplied at present.”

Nigeria’s oil production network has been hit by a series of militant attacks recently. Unions have called a general strike for Wednesday, in protest at gasoline price hikes, which could also hurt output.

A piggy bank.

Falling inflation isn’t good news for savers, who continue to press their noses against the windows of the Bank of England in the vain hope of seeing a rate rise.

Calum Bennie, savings expert at Scottish Friendly, reckons there’s little change of deposit rates rising anytime soon:

With the run-up to the EU referendum contributing to increasing fears about the state of the global economy, the last thing we want is to be flirting with the term ‘noflation’ again. Indeed, this news reinforces the view that a rise in interest rates is not going to happen this year.

Even though we have witnessed a rising oil price in recent months, the Bank of England’s 2% inflation target seems a long way off just now and this will only make Mark Carney sit tight and make us wait yet again on interest rates.

For those who want to grow their money over the long-term they should be considering stocks and shares ISAs as an alternative to the derisory saving rates on offer from the banks, although risk is attached.

Updated

Here’s our news story about the 9% jump in house prices in March:

Inflation takes wind out of the pound

The pound has been hit by the news that Britain’s inflation rate had fallen from 0.5% to just 0.3%.

After a strong start to the day, sterling fell back to $1.448 when the unexpectedly weak consumer price data arrived.

Pound vs US dollar today
Pound vs US dollar today Photograph: Thomson Reuters

Nawaz Ali, UK currency strategist at Western Union Business Solutions, says the pound is suffering because

UK inflation is stagnating with a disappointingly low report causing an immediate drop in the value of the Pound. Forecasts ahead of ‘CPI Tuesday’ ranged from about 0.7% down to 0.3%, so today’s 0.3% UK inflation release is right at the bottom of this range. Whilst not a game-changer, this data will be a real blow for the hawkish members of the Bank of England favouring future interest rate hikes.

That still leaves the pound up around one cent today, partly driven by a phone poll which showed the Remain campaign holding a 15 point lead.

Updated

Core inflation, which strips out volatile measures such as energy and food, has also fallen - from 1.5% to 1.2%.

That suggests that underlying price pressures are still subdued – which is frankly excellent news for consumers.

This graph, from Berenberg bank, shows how the price of physical goods began falling back in 2014 (partly due to cheaper energy costs)

UK inflation, in detail

Berenberg’s Kallum Pickering explains:

The large falls in the headline rate since 2014 are largely due to cheaper goods, which account for 52% of the weight in the headline index. Low inflation has helped boost real incomes during a time when nominal wage gains have been unusually soft relative to the level of unemployment in the economy. And given that household consumption has been growing faster than overall GDP, there is little evidence that low inflation has led households to postpone spending amid expectations of lower prices in the future.

Whilst low inflation might give the inflation targeting Bank of England a headache, it is mostly a welcome boost for UK households and the economy overall.

The Federation of Small Businesses and the British Chambers of Commerce have both issued statements urging the Bank of England to resist raising interest rates.

BCC chief economist David Kern says:

While the Bank of England’s current monetary policy is conducive to maintaining stability, boosting business confidence will require much greater efforts on the part of the government to support growth at a time when the economy faces many headwinds.

Updated

The TUC, which represents Britain’s unionised workers, doesn’t share the Treasury’s happiness about the drop in inflation.

TUC General Secretary Frances O’Grady argues:

The UK’s continuing low inflation is a sign that the economy still lacks the demand needed to get back to full strength. Wage growth remains too weak and we do not have the level of public investment needed to secure stronger growth.

With the UK economy slowing down, the government cannot continue to stand by. We need investment in skills, infrastructure and public services to promote growth for the long term.

Figures released last month showed that wage growth, including bonuses, fell back to +1.8% in February, down from 2.1%.

Updated

Treasury: Low inflation good, Brexit BAD!

The Treasury, in Central London.
The Treasury, in Central London. Photograph: Alamy

The Office for National Statistics doesn’t suggest that the drop in inflation is due to uncertainty over next month’s EU referendum.

But that hasn’t stopped the Treasury shoe-horning a Brexit warning into its official comment on today’s data, which reads:

Today’s inflation figure continues the trend we’ve seen over the past year. Pay is growing faster than prices, boosting families’ spending power.

Last week the Bank of England’s Monetary Policy Committee warned that a vote to leave the EU would put this all at risk by hitting GDP and increasing inflation. As the Chancellor has said this would create a lose-lose situation for our economy.

So it is clear Britain would be poorer outside the EU. To avoid putting our economic progress at risk we must continue with the plan that is building resilience and delivering rising living standards across Britain.

Updated

Rob Weaver, director of investments at property crowdfunding platform Property Partner, blames George Osborne’s tax rises for the 9% surge in house prices in March.

With prospective private landlords firmly in the Chancellor’s cross hairs, the rush by buy-to-let investors turned into an unavoidable stampede in the final month before the stamp duty increase.

The hefty 3% hike in upfront tax bills from April this year ramped up activity to beat the deadline and in turn pushed house prices up, temporarily at least.

Updated

UK house prices jump by 9%

A row of Sold and For Sale signs.

There’s no sign of deflation in the UK housing sector, where new data shows prices surging again.

Britain’s house prices jumped by 9% annually in March, the ONS says, as buyers rushed to beat higher stamp duty rates on buy-to-let properties.

London house prices leapt by 13%, helping to drive the English house price index to a new record high.

However, house prices actually dropped by over 6% in Scotland:

UK house prices

Updated

So, is Britain heading back to deflation?

Nick Dixon, investment director at Aegon UK, argues not:

While inflation was weak in April, we may be closer than forecasts indicate to the inflection point when inflation starts to accelerate. A combination of rising energy costs, higher US rates, and lower £ sterling could bring inflation forward and trigger rising interest rates before the end of 2016.

Updated

Inflation: The Key Charts

This chart confirms that transport costs and clothing pegged back the cost of living last month:

Inflation, the details

The ONS says that air transport prices fell by 14.2% in April, having surged in March to take advantage of holidaymakers travelling for Easter.

However, prices for both petrol and diesel did rise by more than they did a year ago.

And clothing and footwear prices fell by 0.4% between March and April this year compared with a rise of 0.9% between the same 2 months a year ago. Much of the downward contribution came from women’s outerwear, the ONS says.

And that has pulled inflation back down, erasing recent gains:

The UK inflation rate over the last decade
The UK inflation rate over the last decade Photograph: ONS

Falling air fares drag inflation down

Falls in air fares and prices for clothing, vehicles and social housing rent were the main contributors to the drop in the inflation rate, the Office for National Statistics says.

Air fares had risen sharply last month, because Easter was particularly early this year.

The ONS adds:

These downward pressures were partially offset by rising prices for motor fuels and for certain recreational goods and cultural services, and by food prices, which were unchanged between March and April 2016, having fallen between the same two months a year ago.

UK inflation rate falls back to 0.3%

Breaking: The UK inflation rate has fallen, for the first time since last September.

Confounding our expectations, the Consumer Prices Index only rose by 0.3% year-on-year in April -- dashing expectations of a 0.5% reading.

More to follow....

IMF pushing for Greek debt relief until 2040

There’s a significant development in the ongoing Greek drama.

The IMF wants the eurozone to grant Athens almost 25 years of debt relief, in return for continuing to support the Greek bailout programme.

That’s according to the Wall Street Journal, which writes:

The International Monetary Fund is pressing the eurozone to let Greece skip paying interest or principal on bailout loans until 2040, say officials familiar with the talks.

The IMF wants the loans to Greece to fall due gradually in the following decades, and as late as 2080, according to the IMF’s proposal.

Greece’s interest rate on eurozone loans would be fixed for 30 to 40 years at its current average level of 1.5%, with all interest payments postponed until loans start falling due, under the IMF proposal.

The IMF’s proposal, presented to eurozone governments late last week, would keep Greece’s annual debt-service needs below 15% of its gross domestic product, under the IMF’s relatively pessimistic forecast for Greece’s long-term economic trajectory.

More here: IMF Wants Eurozone Debt Relief for Greece Until 2040

Greek bonds are strengthening, following this news:

This comes as Greece’s prime minister prepares to brief his cabinet about the package of austerity measures which MPs will consider on Sunday night.

They include a new privatization fund, measures for tackling bad loans, and tax increases on alcohol, coffee and heating oil (among other items).

As one Greek analyst pointed out,

The only thing that is not being taxed is the air we breathe.

(don’t give them any ideas....)

Updated

Mike Ashley agrees to meet MPs – home and away

The Telegraph’s Ashley Armstrong has a couple of corking stories this morning.

She’s learned that Sports Direct boss Mike Ashley, already reeling from Newcastle’s relegation, has finally agreed to appear before a parliamentary committee to discuss working conditions at his company.

However, he also wants MPs to visit his warehouse first!

As a football chairman, Ashley (Mike, not Ms Armstrong) clearly fancies a battle on home territory before a daunting away trip to Westminster, surrounded by a hostile crowd.

The Telegraph also has good news for workers at BHS; John Hargreaves, who founded the Matalan retail chain, has been working on a rescue bid for the company.

Administrators at Duff & Phelps are understood to be “bullish” about selling BHS as a going concern by the end of the week and have told suitors they must pump in cash, take on all the shops and also the chain’s debt liabilities.

Updated

Britain’s competition authority is under fire this morning, after announcing its new proposals to shake up the banking sector.

Although the CMA is proposing overdraft caps, and new measures to help customers switch, campaigners are unhappy that it isn’t challenging the dominance of the big four banks.

Here’s the story.

European stock markets rally

European stock markets are rising in early trading.

The FTSE 100 has jumped by 46 points to 0.7% to 6198, the highest level since 3 May.

Housebuilder Taylor Wimpey is leading the top risers, after announcing a new special dividend for investors.

The rising oil price is also boosting confidence in the City, as it eases fears of an oversupply glut pushing advanced economies into deflation.

The German stock market (the DAX) has jumped 1%, while the French exchange is 0.7% higher.

Bloomberg: Oil at a six-month high

Tony Cross of Trustnet Direct says:

A positive finish both the US and Asia, plus the fact that oil prices continue to march higher, have combined to ensure London’s FTSE-100 kicks off Tuesday’s session by extending yesterday’s late gains

A Delta Airlines jet.

Sam Hill of Royal Bank of Canada reckons the UK inflation rate will remain at 0.5% in April, matching the previous month’s reading.

He points out that March’s inflation rate was driven up by higher travel costs, as airlines hiked prices over Easter:

Although we look for some reversal in airfares after the surge last month, offsetting this there is also the higher petrol price and a number of other duty and government policy changes taking effect at the start of the new financial year, such as higher dental and prescription charges.

Hill also reckons UK inflation will still be below 1% at the end of 2016 ... “but this is dependent on the outcome of the EU referendum.”

Oil on brink of $50 per barrel

A flame from a Saudi Aramco oil installion known as “Pump 3” is seen in the desert near the oil-rich area of Khouris, 160 kms east of the Saudi capital Riyadh, on June 23, 2008.

Oil is continuing its charge towards the giddy heights of $50 per barrel this morning.

Oil prices are now at their highest level in seven months, in a sign that inflationary pressures may be building.

  • Brent crude, from the North Sea, has gained 1% to $49.44 per barrel, a level last seen in November 2015.
  • And US crude has jumped by 1.4%, and now changing hands at $48.39 per barrel.

Oil continues to be pushed higher by recent production cuts, and supply disruption from Canada to Nigeria.

As we covered yesterday, Goldman Sachs has argued that the oil market is now in deficit – meaning the world is consuming more crude than is currently being produced.

Goldman Sachs' oil report
Goldman Sachs argues that the oil market fell into deficit in the current quarter (below the line) Photograph: Goldman Sachs

Mike van Dulken of Accendo Markets says oil is:

....benefitting from a bullish outlook upgrade from Goldman Sachs as well as more supply disruptions stemming from equipment failure and political squabbles in places like Nigeria and Venezuela - both major producing nations.

The agenda: UK and US inflation reports

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

A few months ago, many commentators were fretting about the threat of deflation. But with energy prices picking up, those fears look increasingly ill-founded.

At 9.30am BST, we get the latest measure of UK inflation, for April. Having fallen to minus 0.1% last October, the consumer prices index scrambled back to +0.5% in March. Economists expect it remained at 0.5% in April, but aren’t ruling out a higher number.

A high reading might reopen the debate about when the Bank of England could finally start raising interest rates - once the thorny issue of Britain’s EU referendum has been resolved, anyway.

And then at 1.30pm BST, the American inflation report for April is released. Wall Street expects the annual CPI rate to rise to 1.1%, from 0.9%.

America’s central bank has already entered the rate-hike cycle, of course, following last December’s quarter-point rise. So the Federal Reserve is now looking for signs that it made the right decision.

Back on Friday, the latest US retail sales and consumer confidence reports smashed expectations, but analysts still expect the Fed to remain cautious:

Alastair Winter, Daniel Stewart’s chief economist, explains:

Many investors seem to hope this ‘Goldilocks’ economy will persist, whereby there is enough growth and inflation to keep things moving but not enough to persuade the FOMC to hike interest rates.

US consumer spending surged in April
US consumer spending surged in April Photograph: Daniel Stewart

But as CMC’s Michael Hewson points out, some Fed policy makers are making rumbling noises....

Yesterday we heard from the Richmond Fed’s Jeffrey Lacker who stated that there remained a strong case for a June rate rise, however he is not on the voting committee this year, unlike the Boston Fed’s Eric Rosengren who is, and who has a history of leaning to the dovish side.

His comments last week about the markets potentially mispricing the timing of a Fed move on rates appear to suggest he is leaning towards a rate rise in the next few months.

Also coming up today:

Britain’s competition authorities are announcing the results of a review of British banking. The top news is that they’re proposing a cap on unauthorised mortgage charges:

Vodafone, Premier Foods, Land Securities and Enterprise Inns are reporting financial results, so we’ll pick over the bones at some point.

And in Greece, the government is trying to rally support for another dose of austerity measures and reforms which will go to the vote on Sunday night. More on that shortly too.

We’ll track all the main events through the day...

Updated

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