Eurozone break-up fears hit two-year high - as it happened

Rolling economic and financial news, as a new survey finds that investors are more concerned about Greece leaving the eurozone

• Summary: More investors expect Greece to leave eurozone
• Bank of England's Carney and Habgood at TSC
• Greek reform bills could be delayed
• Stunning German retail sales figures

6.21pm GMT

And finally (probably), the Syriza party has released an 8-page statement saying draft legislation regarding the re-opening of the state TV channel ERT will be put to parliament on March 5th. No dates were given for other reforms.

As we reported this morning, sources reckon some bills will be held back until after Monday night's eurogroup....

6.19pm GMT

Greece's Mega TV on its flagship evening news programme is now reporting that euro group officials have suggested the money needed to cover the looming IMF loan (a1.5bn) could be forthcoming if Greece comes up with "convincing reforms" at next Monday's meeting.

Ie, reforms that could take immediate effect such as a privatization of some kind or the announcement of new taxes (Helena adds)

6.17pm GMT

Over in Athens Greece's Labour Minister has announced that the a751 minimum wage will be re-instated in installments, with the first being delivered this year.

Previously, Skourletis had said the minimum wage would be re-introduced sometime in 2016 - so the news is likely to be well greeted, says Helena Smith, our correspondent, who adds:

The former Syriza party spokesman told BHMA FM radio station that collective work agreements - a major demand of unions - would also be brought back. Both were central to the radical left party's pre-election campaign program.

5.35pm GMT

Meanwhile.....

#Greece playing up its geopolitical status: "we could have a bridge role between Europe and Russia," says Greek foreign min

5.33pm GMT

The Greek public, on balance, back the stance taken by their government in the bailout talks -- particularly finance minister Yanis Varoufakis.

That's according to a poll for Star TV tonight:

#MRB poll: 70.4 pct have positive view of handling by FinMin #Varoufakis #Greece

MRB poll for Star TV Would you have liked govt to take tougher stance in talks even if it led to euro exit? No 59.8 Yes 38.4 #Greece

#MRB poll: 52.2 pct against gov't taking a tougher stance if it were to lead to capital controls #Greece

4.21pm GMT

The blue-chip FTSE 100 index is down 40-odd points, or 0.7%, in late trading:

FTSE soggy -46 @ 6894 - Barclays -3.25%, Direct Line -0.7%, Travis Perkins -4%, Moneysupermarket -10%, Pace +8%, Ashtead -1%, Glencore -3%

4.12pm GMT

Barclays may also have to put banking scandals behind it before trying to persuade customers to pay for current accounts.

As Japer Lawler of CMC Markets reminds us, this morning's results were tainted by mistakes of the past:

Shares in Barclays dropped after the bank reported an annual net loss having put aside an extra 750m for FX rigging fines and 200m for insurance mis-selling.

Excluding exceptional costs Barclays turned a profit but the underlying business cannot come to the fore with no end in sight for litigation.

4.03pm GMT

Successful prosecution of former Morrison Treasurer Paul Coyle by FCA for insider dealing is first time for a former FTSE100 exec

4.01pm GMT

Chief executive of @Barclays tells @itvnews he wants end to "free" current accounts in interests of transparency. http://t.co/PKGD326BFw

3.59pm GMT

Legal news. The former Group Treasurer and Head of Tax at Wm Morrison Supermarkets plc, has been jailed for 12 months for insider dealing.

Paul Coyle, who today pleaded guilty to 2 counts of insider dealing, was also ordered to pay 15,000 towards prosecution costs and a Confiscation Order in the sum of 203,234.

Between 24 January and 17 May 2013 Coyle, through his role at Morrisons, was regularly privy to confidential price sensitive information about Morrison's ongoing talks regarding a proposed joint venture with Ocado Group plc.

Coyle took advantage of this information by trading in Ocado shares between 12 February and 17 May 2013 using two online accounts which were in the name of his partner.

3.56pm GMT

Back in the UK, the boss of Barclays has suggested that the era of free current accounts should end.

Antony Jenkins made the comments in an interview with ITV News's business editor Joel Hills, after Barclays reported its result this morning.

Well as you know there is going to be a big investigation into the current account market. I have always believed, since this was first introduced in the 80's, that not having a price point, if you like, around the current account, was probably not helpful for consumers because it's very hard to make a judgement about something when there's no price attached to it. So broadly speaking, I think having a bank account that there is a price point for is a positive. Now there already are bank accounts that have that quality to them, but it's not across the whole system and I think...

I do think that that would be a step forward, yes. It's difficult to achieve of course because the banks can't do that, it would probably have to be regulated or legislated.

Well because we're not allowed to work together on matters like this, for good reason.

That's the other problem, if one of us moved to a charging model it would be likely that we'd lose a lot of business because people would go to the free model.

2.21pm GMT

Stephen Lewis, chief economist at ADM Investor Services, isn't surprised that more investors now believe Greece could leave the eurozone over the next year.

He cites two reasons.

The budget numbers Athens reported for January were seriously off target, leaving ground to be made up if the primary budget surplus is to meet the level specified in Greece's second bailout agreement. However, there is every reason to suppose that the budget numbers for February were just as bad as January's, seeing that the political and financial uncertainty that dampened business activity in the first month of the year continued after Syriza's 25 January election victory.

Trust between the Greek government and its creditors was damaged when Mr Varoufakis was reported to have described his agreement with the Euro Group on 20 February as a clever form of words. To his fellow finance ministers, his remark did not appear to signify the serious intent to take reforming measures that they had expected. More damaging still was Mr Tsipras's claim last week that Spain and Portugal had formed a hostile axis against Greece. Both right-wing governments in those countries were, he said, fearful that, if Greece were granted concessions, their own voters would switch their allegiance to political parties ready to fight for similar treatment. While what Mr Tsipras said may very well be true, the breach of EU protocol will not be easily forgotten.

Mr de Guindos, Spain's finance minister, spoke out of turn yesterday, claiming that the euro zone finance ministers were considering a a30bn-50bn third bailout package for Greece. Mr Dijsselbloem's office has been unwilling to provide any confirmation that talks are under way on this matter; he wants to avoid complicating matters.

"Come on #Tsipras" : brilliant #cartoon by @georgopalis #Greece #Spain #Syriza #Podemos #Rajoy pic.twitter.com/SroajMtsEg

1.55pm GMT

Greek financial news site Capital.GR reports that Yanis Varoufakis held a conference call with officials from Greece's creditors today:

A teleconference btwn #Greece FinMin and Costello, Mazuh, Goyal (troika), took place earlier today via @capitalgr http://t.co/QfsbEpaTj1

We should keep "troika" for tweeting purposes. #Greece

1.09pm GMT

Time for a recap.

It's been another day largely dominated by Greece, after a new report found that almost 40% of investors expect at least one member of the eurozone to break away this year.

The development is driven by a clearly worsening assessment of investors concerning Greece....

Despite the solution which was found last week for Greece ever more investors expect the Mediterranean country to leave the euro soon.

As Greek rumblings continues ever more investors expect #Greece to leave Euro. #Grexit risk at 37%, highest since '12 pic.twitter.com/hlrDNMDaQT

"So far there is an agreement in principle, but have they really made substantial progress? I'm not so sure.... What we need is implementation, and for both sides to live up to expectations, and then we can become a bit more relax."

12.43pm GMT

Syriza MP Costas Lapavitsas' observation that Greece's best hope, now, is to leave the euro [see 8.11am post] has not gone without comment in Athens.

"Lapavitsas has built an entire career on the return of the drachma,"

"Yanis Varoufakis has found himself in a position of pressure that no Greek fiannce minister has found himself in for five years...

He is a good economist with a strong pedigree and wide experience of the world economy."

@Hugodixon Only I never said that Hugo.... Your Greek needs some brushing up (or better sources)

12.11pm GMT

Greek bonds have rallied this morning, pushing down the yield (or interest rates) on the debt.

The yield on Greek 10-year bonds has dipped to 9.76%, from 9.9% last night, meaning its value has risen.

Greek bonds rally after talk of third bailout http://t.co/UjBnCIqLLl

12.07pm GMT

More from the Treasury committee.....

Carney admits the Bank's rep has "taken a knock" as a result of the forex rigging scandal. "It hasn't been a pleasant experience".

Carney tells MPs the Bank has made "fairly radical changes" to the way it deals with market intelligence in light of forex rigging scandal

11.50am GMT

Factoid of the day: the number of takeovers involving UK companies has hit its lowest level since records began in 1987.

That's mainly due to a steady decline in the number of acquisitions of British companies by other UK firms in recent years. More here.

Total M&A activity involving UK companies fell in 2014 to lowest numbers since records began http://t.co/hnwgv24ib1 pic.twitter.com/iJx710QfHk

11.33am GMT

Mark Carney has conceded that the Bank's chief currency dealer, Martin Mallett, would probably have been fired over the FX scandal, if the BoE hadn't found other reasons to dismiss him (the day before its report was published....)

Carney asked by MP Jesse Norman whether he would have fired Mallett on Grabiner findings alone. His answer (in short) was yes.

Carney says that if Mallett hadnt been fired for other violations, in his opinion, Mallett should've gone for not escalating forex issues

Mallett's 20 failings took place over an 8 year period according to Carney #bbcnews

11.24am GMT

The European Union has reiterated that they're not working on a third bailout for Greece (as Spain's finance minister suggested yesterday).

EU SPOKESWOMAN SAYS WORK HAS NOT STARTED ON THIRD GREEK BAILOUT

11.17am GMT

Governor Mark Carney is adamant that the Bank of England has seriously beefed up its market intelligence operations since it learned that foreign exchange traders had been manipulating the FX market:

Carney says BoE has improved professionalisation now e.g. Bank staff have 'escalated' 50 concerns, 40 of which have been referred to the FCA

Carney says Bank has improved market intelligence gathering approach. Separating the "gossip" from strategic issues.

Carney: Bank is expanding its market intelligence team from 10 full-time staff to 15.

11.10am GMT

After an early rally, the London stock market has subsided with the FTSE 100 up just 5 points.

Barclays is now the biggest faller, down 3% after investors digest its drop in statutory pre-tax profits and new provisions for banking scandals.

Foreign exchange rigging fines weigh on Barclays results http://t.co/XqNIFyTP1t

There is a sense of di(C)ji vu in London after the market got off to a strong start only to be brought back down to Earth by the commodity stocks. Taylor Wimpey shares hit a new seven-year high after the homebuilder more than doubled its dividend. The company kept up with its competitors by posting a steady increase in annual profits and a solid start to the spring selling season. The Help to Buy scheme and a more regulated mortgage market will keep the housebuilder happy.

Barclays registered a 12% increase in underlying pre-tax profits, but when you consider the provisions set aside for PPI and FX manipulation it swings to a 21% drop in profits. The bank may be at its strongest 'since the financial crisis' but the fines and provisions have detracted from the company's balance sheet. Barclays' capital structure isn't under question, and as long as legal costs loom over the bank the share price will remain restricted.

10.48am GMT

MPs now asking whether the terms of reference for Grabiner's review went far enough. Carney says he wasn't involved with striking terms.

10.46am GMT

Back in parliament, Bank of England governor Mark Carney has defended the official inquiry into its role in the foreign exchange-rigging scandal, led by Lord Grabiner.

My colleague Angela Monaghan is tweeting the key points from the Treasury committee:

Carney defiant, insisting Grabiner review got to the "heart of the matter" on Bank's role in the forex scandal (not guilty of impropriety)

Carney defends the timing of the firing of its chief currency dealer Martin Mallett, a day before Grabiner report was published. 1/2

Carney says a review of e-mails and phone calls revealed a "series of misjudgments" by Mallett that could not be ignored. 2/2

Carney: Mallett's misjudgments incl sharing BoE docs externally, violation of IT policy, venturing personal opinions, inappropriate language

10.41am GMT

Greece's finance minister appeared to be in good spirits this morning, as he headed off to work:

#Varoufakis blows kiss to passer by on his way to work - VIDEO - #Greece - http://t.co/bT1Rg3qICi pic.twitter.com/WBeSACvE9n

10.39am GMT

Greece's credit rating will be cut unless it agrees a long-lasting agreement with its partners over its funding needs, rating agency Fitch warned this morning.

Greece needs to secure a "durable" aid agreement with the rest of the euro zone to avoid a further downgrade of its already sub-investment grade sovereign rating, one of Fitch's top analysts said on Tuesday.

"We believe that an agreement will ultimately be reached between Greece and its European partners as Grexit would be costly for both parties. Failure to reach a durable agreement would lead to a rating downgrade," Fitch's head of EMEA sovereigns, Ed Parker, said in a question and answer session In the Reuters Global Markets Forum chatroom.

10.24am GMT

European factory gate prices have fallen for the fourth month in a row, Eurostat reports.

The amount that firms were paid for their goods fell by 0.9% month-on-month in January, and were 3.4% lower than a year ago.

CHART: Luxembourg was only euro-area member with positive PPI reading in January. Energy prices continued to decline. pic.twitter.com/51HD8iH4u8

Underlying price pressures across the Eurozone look set to be limited for some considerable time to come because of the constraining effects of large output gaps in many countries following prolonged weak economic activity and still high unemployment.

10.06am GMT

Over in Athens, sources are telling our correspondent Helena Smith that "there is a good chance" the government will delay sending some draft laws aimed at alleviating Greece's "humanitarian crisis" to parliament.

The laws were due to be gradually presented this week. On Monday, the government unveiled the first of the reforms - providing food stamps, reconnection of disconnected electricity supplies and shelter - for 300,000 families mostly in the poorer suburbs of Athens.

Other bills, however, including the introduction of a new scheme for repayment of overdue taxes and security contributions and the re-opening of the public broadcaster, ERT - shut down by former prime minister Antonis Samaras in June 2013 - are not likely to be brought before the House until after next week's euro group meeting in Brussels on Monday.

10.03am GMT

The House of Commons Treasury Committee is starting to question Bank of England governor Mark Carney about the BoE's investigation into misconduct in the foreign exchange market.

9.36am GMT

However....some UK construction firms did warn that uncertainty in the build-up to May's general election may hit demand.

First look at UK PMI suggests there is a lot to be positive about within UK construction. Election seen as potential blip to activity though

9.35am GMT

Just in: Britain's construction sector racked up surprisingly strong growth last month.

Markit's Construction PMI, which measures activity across the sector, rose to 60.1 last month. That shows the fastest growth since October last year.

Markit/CIPS UK Construction PMI Feb: 60.1 (est 59; prev 59.1)

Go the UK ! Markit: Sharpest expansion of construction activity for four months #GBP #GDP

9.29am GMT

The Athens stock market is outperforming the rest of Europe, up around 2% in early trading.

That follows finance minister Yanis Varoufakis's pledge to take six firm reform policies to Brussels next Monday. Investors may also be calmed by his promise that Greece will do everything in its power to meet its March debt repayments.

9.15am GMT

Our Athens correspondent, Helena Smith, tweets:

#Greece deputy pm Giannis Dragasakis denies that technical teams from dreaded "troika" - oops "institutions" - in Athens tmr

9.03am GMT

The latest Spanish unemployment figures also suggest that Europe's economy is reviving.

The number of Spaniards out of work fell by 13,538 last month, or 0.3%, as factories and building firms took on more staff.

Key question: what conclusions will Spanish voters draw from contrast between Spain's recovery and Syriza-induced disaster in Greece?

8.55am GMT

German consumers hit the shops with remarkable vigour last month, in the latest signal that Europe's largest economy is gaining strength.

German retail sales jumped by 2.9% month-on-month in January, the biggest jump since January 2008.

JPM calles the rise in German retail sales "legendary": pic.twitter.com/1pRLXnh9RA

8.50am GMT

I forgot to link earlier, sorry, but here's the Sentix survey:

8.41am GMT

Here's another chart from this morning's Sentix's eurozone survey, showing that fears of Greece leaving the eurozone are at their highest level since autumn 2012.

As Greek rumblings continues ever more investors expect #Greece to leave Euro. #Grexit risk at 37%, highest since '12 pic.twitter.com/hlrDNMDaQT

8.33am GMT

2014 was a good year for Barclays CEO Antony Jenkins.

"On this occasion I judged it was right for me to take my bonus....Barclays today is a stronger business, with better prospects, than at any time since the financial crisis.

8.14am GMT

Europe's banks will not be subjected to a full stress test this year.

The European Banking Authority, which ran a health-check of the sector last autumn, announced the move (or non-move) this morning:

EuropeanBankingAuthority EBA decided not to carry out an EU-wide stresstest in 2015(next 2016) http://t.co/x2vm0IbB09 pic.twitter.com/AJ924klQzx

8.11am GMT

Writing in the Guardian today, Syriza MP Costas Lapavitsas argues that Greece's best hope of ending its deflationary economic spiral is to leave the euro.

Lapavitsas warns that the next four months will be very tough for Athens as it tries to meet the demands of its lenders:

Tax income is collapsing, partly because the economy is frozen and partly because people are withholding payment in the expectation of relief from the extraordinary tax burden imposed over the last few years. The public purse will come under considerable strain already in March, when there are sizeable debt repayments to be made.

The most vital step is to realise that the strategy of hoping to achieve radical change within the institutional framework of the common currency has come to an end. The strategy has given us electoral success by promising to release the Greek people from austerity without having to endure a major falling-out with the eurozone.

Unfortunately, events have shown beyond doubt that this is impossible, and it is time that we acknowledged reality.

7.59am GMT

More investors expect the eurozone to fracture over the next 12 months than at any time since the Cyprus bailout crisis of March 2013.

The Euro Break-up Index, calculated by German research group Sentix, jumped to a two-year high of 38% in February, from around 24% in January, with more investors predicting a Greek exit.

The development is driven by a clearly worsening assessment of investors concerning Greece....

Despite the solution which was found last week for Greece ever more investors expect the Mediterranean country to leave the euro soon.

7.58am GMT

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

"We are negotiating a third rescue for Greece."

"Euro zone finance ministers are not discussing a third bailout."

#Varoufakis on #enikos : Greek #repayments will be made in full - #Greece #IMF #bailout http://t.co/9p9ZRAfeoV pic.twitter.com/MdDqg5CGxL

in athens, we're looking at the end of creative vagueness as finmin varoufakis says he'll go to monday's eurogroup with 6 proposed reforms

Barclays provides 1.25bn for forex rigging investigations, another 200m for PPI