Pirc claims pay deal for Lloyds Banking Group chief António Horta-Osório is ‘highly excessive’ in runup to bank’s AGM on Thursday

Move aims to banish fears of insolvency in Athens but little optimism exists about a breakthrough in bailout talks any time soonGreece moved to banish fears it was on the brink of insolvency and default on Monday, ordering the repayment of €750m (£535m) in IMF loans hours before they were due.The payment – timed in a calculated gesture to coincide with the latest exercise in brinkmanship with eurozone creditors in Brussels – came as a relief, though not as a surprise, to senior eurozone officials. Continue reading...

First announcement from the Bank under the new Conservative government leaves interest rates at 0.5%. All eyes now on Mark Carney’s appearance on WednesdayThe Bank of England has left interest rates on hold at their record low, as widely expected, and financial markets are now looking to Governor Mark Carney’s appearance on Wednesday for more clues on when borrowing costs will rise.The Bank’s latest monthly announcement on Monday was moved from Thursday last week to avoid a clash with the general election. The nine members of the monetary policy committee met on Thursday and Friday last week and so the outcome of the election would have been clear when they voted to leave interest rates at 0.5%. Continue reading...

The debate has focused so intensely on domestic inequality that the far larger issue of global inequality has been overshadowed

Latest forecast of 0.5% quarterly growth would surpass both UK and US in much-anticipated boost for single currency blocEurozone politicians are hoping for glimmers of a long-awaited economic rebound this week, with growth in the single-currency bloc forecast to beat both the UK and US.Economists expect the lower oil price to have provided a fillip to eurozone growth in the opening months of the year and have pencilled in a 0.5% pick-up in GDP, according to a Reuters poll ahead of Wednesday’s figures. That would be the fastest for four years.

Cash-strapped nation is due to repay €770m on Tuesday, with its finance minister indicating it could avoid a default it was thought to be heading forGreece and the eurozone face a week of fresh nail-biting uncertainty as the single currency area’s finance ministers prepare to report on progress towards an agreement with Alexis Tsipras’s government.On Tuesday, Greece faces having to repay around €770m (£560m) to the International Monetary Fund (IMF). The two events had been widely linked. It was assumed that the cash-strapped Athens government would be unable to meet its obligations to the IMF without a cash-for-reforms deal with its creditors that would release more than €7bn.Related: Eurozone pins hope on long-awaited economic rebound Continue reading...

Markets keen for long-delayed post-election outlook on inflation and unemployment with rates likely to stay at 0.5%The Bank of England returns to the spotlight this week when it unveils its latest economic forecasts against the backdrop of record low inflation and the prospect of deep government spending cuts.The central bank is almost certain to leave interest rates unchanged at 0.5% when it announces its monthly decision on Monday, a few days later than usual to avoid the general election. City traders will be hanging on Bank governor Mark Carney’s every word at Wednesday’s inflation report, the first significant insight into policymakers’ thinking after six weeks of election purdah, in which officials were barred from speaking in public on the economy. Continue reading...

Analysts fear Bank of China has been too slow in reacting to the cooling down of economic growth to 7%China’s central bank cut its benchmark interest rate on Sunday for the third time since November, as economic growth cooled to levels not seen since the global financial crisis.The People’s Bank of China lowered its benchmark lending rate by 25 basis points to 5.1%, and its one-year benchmark deposit rates by the same amount to 2.25%, adding that the cuts would be effective from 11 May. The central bank said that the move would support the healthy development of the economy.Related: Outside No 11, the world remains as uncertain as ever for the chancellor Continue reading...

All governments mess up and with an EU referendum looming and a new financial crisis lurking Labour must be ready to seize its chanceLabour should take comfort from the fact that the Conservatives will almost certainly mess things up at some pointThe election is over and it is back to business as usual. This week, the Bank of England will announce its delayed decision on interest rates, while Greece is growing increasingly desperate for cash.Related: The markets liked the Tory victory. Will they like Britain leaving Europe? Continue reading...

Election victory puts George Osborne back in the hot seat, but doesn’t give him any more influence than before over the global economy’s upheavalsWhen George Osborne was offering his post-match analysis in the bleary aftermath of the Tories’ stunning victory on Friday morning, he singled out the Greek debt crisis as the first challenge he will face on returning to No 11.Both Osborne and Balls, his Labour opposite number, fought the general election campaign as though whoever won would be entirely the master of Britain’s economic destiny. Yet chancellors are always to some extent the prisoners of outside events; and the new government, with its slim majority, could be buffeted by any of a series of threats in the global economy. Continue reading...

After lifting of fears that Labour would impose mansion tax and 50% tax rate, there was a boost for the FTSE 100, sterling and estate agents in London

Greek prime minister says troika agreement will be concluded soon, but official denies deal is close amid slow negotiations and creditors’ lack of trust in Greece

The Square Mile is naturally pro-Tory and Friday’s rally may not just have been a sigh of relief at the end to weeks of uncertainty

Although the unemployment rate hit a low of 5.4%, 2016 candidates must show how they intend to fix wage gap – Bernie Sanders hits the nail on the headWith some two dozen Republicans already either openly vying for their party’s presidential nomination in next year’s election or publicly exploring the possibility of throwing their hats into the ring, that race is shaping up to be quite the circus.

Unemployment rate edged lower to 5.4%, from 5.5% the previous month, the Labor Department said on FridayUS unemployment has fallen to its lowest since 2008 after the economy added 223,000 jobs in April taking the unemployment rate down to 5.4% – close to the rate the Federal Reserve considers to be effective full employment.The jobless rate fell from 5.5% to 5.4% the lowest since May 2008 – before the financial crisis struck – in a signal that companies are confident about the strength of the US economy. Continue reading...

Sterling surges along with the banking and energy sectors as Conservatives make unexpectedly large gains in general electionIn its way, the response of the stock market to the Conservative victory in the general election said it all about the British economy. Shares in banks, upmarket estate agents, outsourcing companies and firms employing plenty of zero-hour contract workers all surged. The City, property speculation and a service sector running on cheap labour: for all the talk of rebalancing, repeated by David Cameron on the steps of Downing Street, that’s where the action is.There was, of course, another reason why the Square Mile was running short of Dom Perignon: most of those working in dealing rooms stood to lose personally from a Labour government. They live in big houses, they would have been liable to income tax at 50% and they would have been hit by a bankers’ bonus tax. Never has the phrase “relief rally” been more appropriate.Related: City celebrations greet a home win as election results in Tory majority Continue reading...

FTSE 100 also set to rise, say traders, after 6am prediction that David Cameron will be able to command 325 Conservative MPs with Labour on 232The pound has hit its highest level since late February after the Conservatives emerged as the winner from the general election.Sterling surged by 1.75% to $1.55, its highest level since late February, after an exit poll predicted that the Tories would be the largest party. Continue reading...

Construction industry figures for the first quarter of 2015 revealed an 18% increase in registrations compared to the same period last yearHousebuilding is having its best year since 2007 with most of the UK seeing strong growth, an industry body has reported.The National House Building Council (NHBC) said 40,281 new homes were registered between January and the end of March, the highest total for the first three months of a year since 53,420 new registrations were recorded in early 2007.Related: Housebuilding could be hindered by worker shortage Continue reading...

How domestic politics deals with the pressures of the global economy will decide the success of the next governmentThis is the moment to be bold. Governments do not need full coffers to embark on the kind of reforms Britain needs, but they do need ambition and courage. Britain is not broke in 2015, yet there has been little or no discussion about the broader economy during the campaign. Instead, the focus has been on which party will best fill the hole in the public finances. If ever there was a campaign to rebut the cliche “It’s the economy, stupid,” this was it.But now that the election is over, the new government must face up to some of the economic challenges that have been sidelined over the past six weeks. There are big decisions to be made in at least five separate areas. Continue reading...

Deputy PM Yannis Dragasakis says upcoming eurozone meeting could herald agreement with creditors and end months of stalemateGreece’s deputy prime minister has endorsed growing expressions of optimism over talks with the country’s creditors, saying enough common ground has been found to enable the two sides to reach an agreement.Yannis Dragasakis said he hoped the meeting of eurozone finance ministers on 11 May would finally break ground by signalling that progress had been made. “I hope on Monday a sign of progress will be given and [they say] an agreement is visible,” the 68-year-old politician told the Guardian in an interview.We have a mandate for a sustainable solution within the eurozoneRelated: Greek finance minister claims bailout deal is close Continue reading...

Britain’s motor industry smashed records last month with the 38th consecutive increase in new car sales and the most April registrations since 2005UK demand for new cars was unwavering in the face of political uncertainty last month as registrations hit a decade high.Sales rose 5.1% to 185,778 vehicles in what was the strongest April since 2005, according to the Society of Motor Manufacturers and Traders (SMMT) .Related: Sales of small, fuel-efficient cars jump ahead as consumers seek to cut costs Continue reading...

Markets hate uncertainty but they are falling because share prices may be too high and the cost of oil is rising plus there is the small matter of GreeceHas “fallout Friday” come early? As the queues form outside polling stations up and down the country, share prices have already fallen sharply, with the FTSE 100 down more than 100 points, and sterling lower against the dollar and the euro. Are traders already getting cold feet about the idea of a prolonged period of post-election uncertainty?Related: Stock markets slide as bond sell-off deepens - live updates Continue reading...

Trial of Nikolaos Michaloliakos and other members of neo-Nazi party had resumed briefly in high-security prison in Greece and will continue on 12 MayThe trial of dozens of members of Europe’s most violent neo-Nazi political party, the far-right Golden Dawn in Greece, has been adjourned until next week after resuming briefly in the country’s largest prison.Three years to the day after entering the Greek parliament, the entire leadership of Golden Dawn will be among the 69 defendants accused of masquerading as a political force to pursue a criminal agenda of murder and assault. Continue reading...

From market expectations to to mortgage rates, here are the five key indicators that will show what investors and lenders make of the election outcomeWith the polls so tight, traders are unsure how to position themselves. A whole host of scenarios have been considered for the election aftermath. So once some kind of result is in, how best to gauge what investors make of it?Ian Stewart, chief UK economist at Deloitte, has come up with some key indicators to watch on Friday and the days that follow. We pick out five here.There are three concerns for markets and businesses after the election. One fear is a breakdown of what was thought to be a consensus about deficit reduction. The second is accretion of regulation and tax, so a re-setting of micro-economic policy to the left, and the third thing is Brexit.”If the general election ushers in sustained political uncertainty that seems likely to weigh on growth, market expectations for interest rates are likely to drop further. Conversely, if the new government were decisively to break with austerity and seek to boost the economy through more public spending, interest rate expectations are likely to rise.”a) Improved confidence in the UK’s growth outlook, therefore an expectation of rising interest ratesb) Concerns that a lack of fiscal tightening will usher in higher base rates or cause growing worries about the UK’s credit-worthiness Continue reading...

Negotiations between Greece and its creditors have been badly mismanaged. It is time to stop grandstanding and reach a compromiseThe European project has a history of pulling out of a crisis precisely at the moment when it seems things are doomed. This moment could soon be reached over Greece. A sign of solace may have come on Wednesday, when Greece made a €200m repayment to the International Monetary Fund, ahead of a meeting of the eurozone finance ministers on Monday – although this doesn’t mean a breakthrough is imminent. For three months, a battle of brinkmanship has been going on between the government of Alexis Tsipras and its European creditors over a cash-for-reforms plan that would give Greece the €7.2bn worth of rescue funds that it needs to meet its debt payments. Tensions have run so high that a Greek stumble out of the eurozone has recently started to be described as a lesser evil compared with the current uncertainty. Both sides are certainly calculating that the other will eventually blink first. Greece’s public finances are in a dire state and its growth forecasts have been slashed. Turning to Moscow for a bailout was never going to be a serious option. So Mr Tsipras continues to be faced with the herculean task of having to balance democratic expectations (his campaign promises) with European realities.It hasn’t helped that his government’s negotiating tactics have become overwhelmingly perceived as having more to do with posturing and lecturing than with readiness to find a compromise. Syriza believed its electoral victory back in January would take Europe into a whole new anti-austerity direction. That has not happened. On the contrary, all of the other eurozone countries have dramatically formed a bulwark against Greek demands, in a take-it-or-leave it attitude. Whereas the Tsipras government thought it could find allies by painting Germany as the problem, it has found itself up against an EU-wide front of exasperation. The crisis has been mismanaged from both sides. Continue reading...

Fears that Greece would run out of funds this week and miss a €2bn public sector pay and pensions bill alongside the IMF payment prove unfoundedGreece gained some breathing space in its battle to stay solvent on Wednesday after it met the deadline for a €200m (£149m) debt payment and the European Central Bank extended its lifeline to the country’s banking system.The International Monetary Fund confirmed it had received the repayment, allowing the debt-stricken country’s rescue package to remain in place until next week when another €750m is due to the Washington-based organisation. Continue reading...

Athens has avoided defaulting on an interest repayment to the International Monetary Fund, but hopes of a deal by Monday’s eurogroup meeting are fading

Janet Yellen discussed potential dangers with IMF’s Christine Lagarde amid fears that near-zero borrowing costs may distort markets and create bubblesJanet Yellen, chair of the US Federal Reserve, has highlighted the risks of ultra-low interest rates for financial stability, warning investors that share valuations are “quite high”.At a seminar in Washington, Yellen was asked by International Monetary Fund (IMF) managing director Christine Lagarde about fears that near-zero borrowing costs distort markets and create bubbles.Related: Fed chair Janet Yellen says income inequality is un-American Continue reading...

Outgoing CEO Tidjane Thiam warned of a downward spiral of low income and lower growth, due to reduced long-term ratesPrudential’s outgoing chief executive, Tidjane Thiam, warned about the impact of low, long-term interest rates, as the insurer’s investment returns were hit in the UK and US, despite strong growth in Asia.Britain’s biggest insurer reported a 6% drop in new business profits in the first quarter as double-digit growth in Asia was offset by declines in the UK and the US. This reflected the impact of UK pension reform and reduced interest rates. Interest rates in the UK and the US have been near zero for years. Continue reading...

Ahead of the election, services PMI follows much weaker-than-expected equivalent surveys from the manufacturing and construction industriesThe government was handed a last-minute election boost after the last major piece of economic news before the polls signalled a booming UK services sector, easing fears of a sharp slowdown in the wider economy.Growth in the sector, which accounts for roughly three-quarters of the UK economy and includes areas such as bars, restaurants and transport, was stronger than economists predicted, hitting an eight-month high in April.

The markets usually fear change but no big majority at Westminster means no big changes - gridlock is good, it seems, but not for too longBritain’s financial markets are preparing for gridlock on Friday 8 May, the day after the tightest general election race in decades.

Guardian Australia's political editor, Lenore Taylor, is joined in the studio and on the line by three experts in Australia's budgetary options. Together they pretend to be the budget cabinet, answering the big question: in Australia's current social and economic circumstances, what would a good budget look like? Continue reading...

But NIESR thinktank says recovery is stable despite weak productivity and troubled eurozone

Greece’s bailout crisis deepens as the European Commission rips up its previous growth forecasts

Senior official lays blame on disagreements between EU and IMF as economic growth rate forecasts are slashedGreece’s government has blasted its creditors for holding back progress on bailout talks, laying the blame squarely on differences between the European Union and the International Monetary Fund.Racheting up the pressure on the two bodies, the anti-austerity Syriza government said conflicting strategies and opposing views were not only impeding negotiations but injecting “a high level of danger” into the talks at a time when the country’s finances had hit rock bottom.Related: 100 days of solitude: Syriza struggles as Greeks once again stare into the abyss Continue reading...

Economy thought to have contracted in first quarter of 2015 as gap between imports and exports jumps from $35.9bn in February to $51.4bn in MarchThe US trade deficit jumped to its highest level in almost six and a half years in March, suggesting the economy overall shrank in the first quarter of 2015.The goods and services deficit leaped to $51.4bn (£33.8bn) from $35.9bn in February as imports rose more than exports. It was the largest trade gap since October 2008, a month after the collapse of US investment bank Lehman Brothers, and more than $10bn higher than the $41.2bn forecast by economists.Related: Why the strong dollar is worrying US policymakers Continue reading...

Federal Reserve officials have started to speak explicitly about the dollar as a factor that affects net exports, inflation, and growthIn a world of weak domestic demand in many advanced economies and emerging markets, policymakers have been tempted to boost economic growth and employment by going for export led-growth. This requires a weak currency and conventional and unconventional monetary policies to bring about the required depreciation.Since the beginning of the year, more than 20 central banks around the world have eased monetary policy, following the lead of the European Central Bank and the Bank of Japan. In the eurozone, countries on the periphery needed currency weakness to reduce their external deficits and jump-start growth. But the euro weakness triggered by quantitative easing has further boosted Germany’s current-account surplus, which was already‎ a whopping 8% of GDP last year. With external surpluses also rising in other countries of the eurozone core, the monetary union’s overall imbalance is large and growing. Continue reading...

Commercial activity at its weakest since August 2013 with election weighing heavily on buildign firms who are infamously sensitive to political changeLast month’s construction industry figures add to the welter of evidence showing that boom-boom Britain is no more.Building firms, according to the Markit/CIPS survey, are expanding output at the slowest rate for almost two years.Related: Election uncertainty puts brakes on building sector Continue reading...

Strength of slowdown shown in construction PMI survey reveals how tight election race is putting ‘grit in the wheels of decision-making in the building sector’Uncertainty over the general election affected British building sites last month, with construction output rising at the slowest rate in almost two years.In the latest sign that the UK’s economic recovery is faltering, the closely watched Markit/CIPS construction PMI survey showed all parts of the building sector weakened in April, including housebuilding.

Royal Bank of Scotland’s recent losses (Report, 1 May) should tell us that if privatisation is the answer, we have been asking the wrong question. Taxpayers have taken all the pain of cleaning up the mess, so instead of rushing into a cut-price sale of our stake in RBS, why don’t we treat our investment as a once-in-a-generation opportunity to transform UK banking? Devolving RBS’s retail arm into a network of 130 independently run local banks, held in trust for the public benefit, could provide a huge boost to SME lending, improve access to banking services and reduce the fragility of our financial system. Such local banking networks are common among our industrial competitors. For any government to sell shares in RBS without properly considering the other options would be an act of negligence.

‘I remember who got hurt in the crash – it wasn’t the bankers’, says Tory leader as he tries to pin blame for banking crisis on LabourDavid Cameron has intensified the Tory assault on Ed Miliband by saying Labour has no right to portray itself as the champion of the low-paid after it wrecked people’s lives in the crash.In an impassioned and at times angry speech to a Tory rally in Bath, the prime minister told the Labour leader never to “dare lecture” the Conservatives about helping the poor after the Labour government had lavished knighthoods on disgraced bankers.Related: The Tory economic plan is NOT working, at all - sadly, their PR war isRelated: Labour overspending did not trigger financial crash, says senior civil servant Continue reading...

UN lawyer says tactics used by multinationals in courts outside of public jurisdiction would undermine democracy and lawA senior UN official has called for controversial trade talks between the European Union and the US to be suspended over fears that a mooted system of secret courts used by major corporations would undermine human rights.Alfred de Zayas, a UN human rights campaigner, said there should be a moratorium on negotiations over the Transatlantic Trade and Investment Partnership (TTIP), which are on course to turn the EU and US blocs into the largest free-trade area in the world. Continue reading...