The US, Britain, France and Germany are trying to convince Russia and China to agree to blacklist Iran’s central bank and firms linked to the Revolutionary Guard Corps, in a new round of UN sanctions over Tehran’s nuclear program. Russia and China are permanent members of the UN Security council, which means they can – and do – veto resolutions.
Such sanctions could hurt Iran’s energy market. The government has allowed for up to €5bn euro bond issues by the oil ministry to help finance development of the country’s oil, gas and petrochemical sectors. Read more
The Bank of England’s Monetary Policy Committee starts its February meeting tomorrow with the issue of whether to pause quantitative easing as the main issue on the agenda. A month ago, everyone thought the Bank would keep interest rates at 0.5 per cent and pause the programme of QE at a total £200bn of money created and assets purchased. After disappointing fourth quarter growth figures, there is a bit of doubt about the Bank’s actions. I still think the Committee will pause QE on Thursday. Here is why: Read more
The Irish central bank has revealed that business lending fell during December, at an accelerating rate. The numbers follow similar data from the Bank of England and the European Central Bank.
In Ireland, credit to non-financial corporations fell by 3.2 per cent in December, 2.7 per cent the month before, and 2.2 per cent in October. Private sector lending as a whole was also down at an increasing rate. Read more
Greeks are waiting for a possible television address tonight by George Papandreou, their prime minister, on the country’s fiscal plight. If he does speak, the likelihood is that he will go further than before in accepting tougher measures will be needed to bring down the public sector deficit. Pressure he faced in Davos last week from global financial world leaders appears to have had an effect, and the Greek premier seems keen to get his retaliation in before the European Commission pronounces on his government’s plans tomorrow.
Still, past form suggests Mr Papandreou will not go far enough to calm financial markets. Greek politics appears to be preventing rapid changes in direction, even with the country facing a real risk of default. Read more
In a post on the enjoyable nonsense of Davos last week, I teased that there was a photo of Martin Wolf, our chief economics commentator, in a large ruff and wonderful cod piece. Here it is by popular request….
The Australian central bank has kept its cash rate at 3.75 per cent, after three consecutive monthly rises, signalling concerns about the strength of the recovery. The Aussie dollar slid 1.4 per cent against both the dollar and the yen on the news.
The move was unexpected, though markets beat economists in being less surprised. Read more