No change!
Dun dun DUH!
And the Fed has decided to… Read more
Rating rage
Whatever love there was left in Brussels and Frankfurt for ratings agencies, it has almost evaporated.
Standard & Poor’s may have had some good arguments. But its downgrading of Greece and Portugal - and now Spain - has not exactly helped calm financial markets as officials try frantically to put together a rescue package in Athens. For the European Central Bank, the downgrading of Greece to junk status has created particular complications. If other agencies followed S&P, Greek assets would become ineligible for use as collateral in ECB liquidity operations for which the minimum requirement is BBB-. Read more
Why Britain probably can’t go to the IMF
Here is a simple calculation. The German Green Party is saying Dominique Strauss Kahn told parliamentarians in Berlin that Greece might need loans of up to €120bn or nearly four times its 2009 budget deficit. Apply the same ratio to Britain, and you soon see, the UK could never go to the IMF if it cannot finance its public debt. The sum required would be £652bn or roughly $1,000bn – more than the Fund’s funds.
If, as the Conservatives suggest, anything other than a Tory victory would see Britain banging on the IMF’s door, think again. Default and restructuring is much more likely than going “cap in hand” to the Fund. Read more
Greek-related news
Rest of World Read more
UK, US, Japan risk sovereign debt crises, says ECB
Jürgen Stark has warned of a “full-blown sovereign debt crisis” unless governments take ambitious steps to bring public finances under control, saying the UK, US and Japan face even greater challenges than the eurozone.
His comments were sparked by the escalating crisis over Greece’s public debt, but he played down the idea of the ECB offering Greece a lifeline in an extreme scenario by buying its government bonds. This was not an issued being “discussed at present,” he told journalists. Read more
Brazil’s central bank is expected to raise its core interest rate by as much as a full percentage point this evening as the unexpectedly fast pace of economic growth puts increasing pressure on prices.
Predictions for economic growth, inflation and interest rates at the end of 2010 have all risen sharply in recent weeks, adding to near-certainty among economists that the bank will raise its target overnight rate, known as the Selic, for the first time since September 10 2008 – less than a week before the collapse of Lehman Brothers and the ensuing global crisis took the pressure off an economy that was showing dangerous signs of overheating. Read more. Read more
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Chris Giles has been the economics editor of the Financial Times since 2004. Based in London, he writes about international economic trends and the British economy. Before reporting economics for the Financial Times, he wrote editorials for the paper, reported for the BBC, worked as a regulator of the broadcasting industry and undertook research for the Institute for Fiscal Studies. RSS
Michael Steen, Frankfurt bureau chief, covers the ECB and the eurozone's economies. He joined the Financial Times in 2007 as Amsterdam correspondent and later worked as a front page news editor in London. Before joining the FT, he spent nine years as a correspondent at Reuters, mostly in foreign postings that included a previous stint in Frankfurt, as well as Moscow, Kiev and central Asia. He read German and Russian at Cambridge.RSS
Robin Harding is the FT's US economics editor, based in Washington. Prior to this, he was based in Tokyo, covering the Bank of Japan and Japan's technology sector, and in London as an economics leader writer. Robin studied economics at Cambridge and has a masters in economics from Hitotsubashi University, where he was a Monbusho scholar. Before joining the FT, Robin worked in asset management and banking. RSS
Ralph Atkins, capital markets editor, has been writing for the Financial Times for more than 20 years following an economics degree from Cambridge. From 2004 to 2012, Ralph was Frankfurt bureau chief, watching the European Central Bank and eurozone economies. He has also worked in Bonn, Berlin, Jerusalem and Brussels. RSS
Claire Jones is Money Supply economics team writer, based in London. Before joining the Financial Times, she was the editor of the Central Banking journal and CentralBanking.com. Claire studied philosophy and economics at the London School of Economics. RSS
