Greece fails to win debt deal, as UK budget deficit widens - as it happened

• US economy edges higher
• UK borrowed more than expected in April
• Deficit rises over 10bn last month
• Eurozone company growth is strongest since 2011
• Introduction: Disappointment over Greek talks
  
• Greek finance minister hopes for deal soon
• Greek bonds have weakened

5.43pm BST

Most traders had their minds on other things than the markets after the horrific events in Manchester. So business was rather subdued throughout the day, with the FTSE 100 managing to stay in positive territory for most of the day, only to slip back after a late bounce in the pound. Meanwhile the FTSE 250 edged to a new closing high, while European markets also ended higher. The final scores showed:

5.12pm BST

Here are some new figures from the ONS showing a regional breakdown of the UK's public finances. Larry Elliott writes:

London's thriving economy generates a 26.5bn surplus that is recycled by the government to provide financial help to Britain's less well-off regions, according to an official breakdown of the public finances.

The first attempt by the Office for National Statistics to break down the UK's budget deficit by region has demonstrated the importance of the capital and highlighted how taxes and public spending are used to narrow the north-south divide.

Related: London economy subsidises rest of UK, ONS figures show

3.28pm BST

The markets are looking a little lacklustre at the moment. Connor Campbell, financial analyst at Spreadex, said:

The market became more subdued as Tuesday went on, with little to engender any significant movement.

As it was earlier in the day, the afternoon's main data-focus was on the latest set of PMIs, this time from the US. They ended up cancelling each other out, however; the manufacturing reading unexpectedly dropped from 53.2 to 52.5 month-on-month, but with the services figure jumping to a higher than forecast 54.0. This did little for the Dow Jones, which started the session up 10 or so points, roughly a quarter of what was promised by the futures.

3.18pm BST

Still with the US, and a poor set of housing figures, albeit after a strong performance in the previous month.

New single family home sales dropped 11.4% in April to a seasonally adjusted rate of 569,000 units, down from a nine and a half year high in March. Analysts had been expecting a much smaller decline of 1.5%.

3.02pm BST

And away again from the levity, and some data from the US showing the country's economy continues to head in the right direction, helped by the service sector.

Markit's initial composite purchasing manager's index climbed from 53.2 in April to 53.9 in May. (A reading above 50 indicates expansion).

Growth of US business activity gained a little momentum for a second successive month in May, but the upturn still looks somewhat underwhelming.

Historical comparisons of the PMI against GDP indicates that the PMI is running at a level broadly consistent with the economy growing at a 0.4% quarterly rate (1.5% annualized). Actual second quarter GDP numbers are likely to be considerably stronger, in part reflecting seasonality in the official data and the weak first quarter.

May saw an encouraging upturn in service sector growth to the fastest so far this year, buoyed by rising domestic demand. Manufacturers, on the other hand, reported the smallest rise in production since last September amid lacklustre export sales.

There were mixed signals for the outlook. Optimism about the year ahead fell slightly, but hiring remained reassuringly solid, thanks to a step- up in service sector recruitment. The survey is indicative of non-farm payroll growth of approximately 160,000.

2.49pm BST

It really isn't a good day for levity, but Mark Carney, governor of the Bank of England, has fallen for an email prankster.

Bank of England Governor, Mark Carney. Apparently is not up for the type of party I like to throw. pic.twitter.com/6Iam49A5rA

2.36pm BST

Following in the steps of Europe, US markets have moved higher in early trading, ahead of President Trump's first full budget plan.

The Dow Jones Industrial Average is currently up 29 points or 0.14%, while both the S&P 500 and Nasdaq Composite opened around 0.2% higher.

1.52pm BST

Over in Athens the government spokesman has challenged the German finance minister's view, and suggested Berlin is responsible for the failure to reach a comprehensive deal that would also include debt relief.

"The solution presented yesterday corresponded neither to the targets that had recently been set nor the sacrifices of the Greek people."

"The main difference between the IMF and the German finance ministry has to do with the growth projections and primary surpluses after 2023."

12.54pm BST

Germany's finance minister, Wolfgang Schiuble, has just told reporters in Brussels that the IMF 'proved to be difficult' during last night's Eurogroup meeting.

12.42pm BST

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12.05pm BST

Greek finance minister Euclid Tsakolotos has tried to put a positive spin on Monday's abortive attempt to find a solution to the country's seemingly unstoppable debt saga.

"I'm quite confident that if all sides are in a mood of compromise, it should not be beyond the wit of man to find that compromise within three weeks. It does mean that all sides will need to compromise a bit."

"How many fairytales will Greeks be subjected to? Six Eurogroups have elapsed and Mr Tsipras keeps telling us that the second review and agreement has been concluded.

"Instead of getting the loan disbursement and closing the deal, he has got nothing and burdened Greeks with measures worth a14bn. Neither has the review closed, neither has he got the loan disbursement and of course there is not a word about the debt."

11.47am BST

The Athens stock market has fallen amid disappointment that the eurogroup didn't unlock Greece's next bailout payment last night.

The benchmark ATG index is down 1% at 780 points, with bank shares leading the selloff.

Another barbaric terrorist attack UK will cast a very long shadow over the UK general election (for which campaigning has been understandably suspended), the public and financial markets, and renders all else rather moot.

11.07am BST

Britain's retailers became more anxious about trading conditions this month.

That's according to the CBI's monthly report on the sector, which found that sentiment fell at the fastest rate since 2012.

*U.K. CBI SAYS RETAIL SECTOR SENTIMENT AT LOWEST SINCE 2012

10.43am BST

John Hawksworth, PwC chief economist, says today's UK public finances paint a mixed picture:

On the positive side, the estimate budget deficit for 2016/17 as a whole was revised down by more than 3 billion due to higher tax receipts and lower spending than initially estimated last month. The deficit last year was only around 2.5% of GDP, similar to pre-crisis levels and moving closer to levels that would be sustainable in the long run.

"On the other hand, public borrowing in April 2017 was 10.4 billion, around 1.2 billion higher than the same month last year. We should not read too much into a preliminary estimate for a single month, but it is consistent with the broader picture painted by the OBR in March when they predicted that the budget deficit could widen again this financial year as some favourable timing effects on both tax and spending in 2016/17 were reversed in 2017/18.

Whoever forms the next government will still need to make some tough choices on tax and spending in the longer term, as the recent debate on social care shows."

10.30am BST

Today's public finance report also shows how Britain's national debt has swelled since the financial crisis struck, both in cash terms (in blue) and as a share of national output (the red line)

10.12am BST

Sam Tombs of Pantheon Economics has tweeted an interesting chart from today's UK public finances.

It shows how growth in UK tax receipts has slowed in the last couple of months (one reason the deficit went up in April).

Growth in tax receipts slowed to 3.9%y/y in Apr from 6.2% Mar. Early days, but seems bus. surveys could be too upbeat on Q2 GDP growth again pic.twitter.com/bljksSOPKZ

10.09am BST

The jump in Britain's budget deficit last month highlights the challenge facing the next government.

So warns Ross Campbell, public sector director at ICAEW (which represents chartered accountants), who calls April's net borrowing "precariously high".

The amount of interest Government pays because of its growing debt, projected to be 46 billion annually in 2017/2018, is 7 billion more than in the previous financial year.

Instead of loading up the UK's credit card with no comprehensive strategy to pay off these financial obligations, this money could be used to tackle key issues across all party manifestos, such as social care, education, and intelligent infrastructure plans."

9.55am BST

PUBLIC FINANCES: Britain borrowed more than expected to balance the nation's books last month.

The UK budget deficit jumped to 10.4bn in April, new figures from the Office for National Statistics show, some 1.2bn more than a year ago.

9.38am BST

Alex Lydall, head of dealing at Foenix Partners, says this morning's strong PMI report shows that Europe's economy continues to impress.

Momentum for the single currency has been obvious with the euro peaking at 8-month highs against the US dollar at a time where political threats are quickly diminishing. Populist voting has been quashed in both the Netherlands and France, with the main conundrum for [ECB president] Mario Draghi, low inflation, seemingly also disappearing as levels are very close to the 2% target. At a time where Trump is continually sending shockwaves across US markets, and the UK in the midst of an election, things in the eurozone appear somewhat settled.

The Eurozone's growth trajectory remains very supportive, fuelling expectations that the European Central Bank will have to adjust its stance soon, maybe as early as June. However, despite some green shoots, inflation dynamics remain relatively subdued and the recent appreciation of the Euro was cited by some survey respondents as a drag on new business.

A tightening of monetary policy would only reinforce that trend and as such, the ECB may have to wait before signalling that the end of its extremely accommodative policy is in sight.

9.19am BST

It's official: Europe's economy continues to rattle along at its fastest rate since the debt crisis began.

Business activity is expanding at its fastest rate for six years so far in the second quarter, consistent with 0.6- 0.7% GDP growth. The consensus forecast of 0.4% second quarter growth could well prove overly pessimistic if the PMI holds its elevated level in June.

Capacity is being strained by the strength of demand, with backlogs of work showing one of the largest increases in the past six years. Job creation has surged to the second-highest rate in nearly a decade as firms seek to expand capacity and meet rising demand.

9.04am BST

The German PMI figures have also impressed economists.

Here's ING's Carsten Brzeski....

German PMI at six-year-high. Get out these Superman capes again...

Germany PMI Services disappoints, deteriorating; Manufacturing impresses, improving. Opposite of France

#Euroboom2017 moving into ridiculous territory, Germany composite PMI at 6-year high in May, job creation continuing at rapid pace pic.twitter.com/w5eGLXP8Py

8.51am BST

Germany's private sector is also powering ahead, in another encouraging sign for the eurozone.

The German manufacturing PMI has jumped to 59.4 this month, up from 58.2 in April.

"The flash PMI data for May signalled no let-up in German economic growth, with the headline output index reaching its highest level in over six years. The index has trended at 57.0 over April-May, pointing to the strongest quarterly expansion since Q2 2011. Manufacturing continued its impressive performance with output, new orders and backlogs all growing at the sharpest rates in over six years, and export expansion hitting a seven-year record. Cost pressures at manufacturers also eased noticeably in May, but remained strong overall.

"The only blot on Germany's copybook in May was a further solid but unspectacular rise in service sector new business, reflected in another decline in the volume of outstanding work in the sector.

8.41am BST

Economists are impressed by France's strong private sector growth this month.

Bloomberg's Maxime Sbaihi says it shows the economy strengthened this quarter (after growing by only 0.3% in Q1).

Aux armes #PMI! French survey confirms acceleration in Q2, though probably exaggerating the momentum a bit. My take: https://t.co/Bza8lCUscB pic.twitter.com/VgDhJ2ONb9

En Marche to ~2.5% annualised GDP growth in Q2. Whether it can be sustained is less clear at this stage. https://t.co/VfQzqYAXAy

8.32am BST

We have encouraging news from France this morning.

French companies are growing at their fastest pace in six years right now, according to the latest healthcheck from data firm Markit.

"The acceleration was driven by the dominant service sector, buoyed by strong client demand and the sharpest round of job creation since August 2011. Meanwhile, the rate of output growth in the manufacturing sector remained marked but eased from April amid a weaker rise in new business, linked, in part, to a strengthened euro.

"The numbers continue to paint a positive picture of the French private sector economy. Furthermore, with May's conclusion to the presidential elections, the road looks set fair for future growth. However, eyes will now turn to June's legislative elections as a next potential stumbling block."

#France's economy is enjoying a post-election bounce & strong Q2: PMI at 6-year high of 57.6 in May (56.6 in Apr) https://t.co/e7u3s4VSCL pic.twitter.com/facYG37YRh

8.25am BST

Last night's talks failed partly because the eurogroup and the IMF can't agree how large a budget surplus Greece should run.

From Brussels, my colleague Jennifer Rankin explains:

At the heart of the dispute is a demand that Greece run a budget surplus equivalent to 3.5% of GDP. The European side thinks Greece can hit this target in 2018, but the IMF has long argued that any country with high unemployment, (currently 23% in Greece) would struggle to meet such demanding fiscal targets.

In a sign of a possible concession from both sides, Dijsselbloem said there had been "full agreement that the 3.5% primary surplus should remain for five years" and eventually fall, although he did not specify a figure.

Related: No bailout funds for Greece as eurozone finance chiefs fail to agree deal

8.20am BST

Greek bonds are weakening in early trading as the City react to the lack of progress at yesterday's eurogroup meeting.

The yield, or interest rate, on Greece's benchmark 10-year bonds has jumped to 5.73%, up from 5.6% last night. That means traders are demanding an extra premium to hold the debt.

Greek yields spike higher as Greece's creditors failed to reach an agreement on Greek debt measures

8.08am BST

Welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

"I'm sure we can be successful if we take a little more time."

Eurogroup presser: IMF welcomed progress on policy, impressed with Greece, still its intention to go to the board when more clarity on debt

It will be difficult to make inferences about the state of the public finances from the first month of data in the new fiscal year. In the context of a full year target for the deficit of 58.3bn in 2017-18, we would expect the April borrowing requirement to have been around 10bn.

The general election is scheduled for 8 June, so this of course presents scope for subsequent changes to existing plans, even if they are modest ones in the event of a Conservative victory, as we explored in a recent publication. In any case, it will be more appropriate to make a more thorough assessment of the fiscal situation once the election is out of the way and we know the extent of any changes in economic strategy.