The Bank of England will weigh the weakness of Britain’s wage growth against the strength of its economic recovery when it delivers fresh forecasts in its quarterly inflation report on Wednesday morning, containing signals about when a rise in interest rates is likely.
<To be delivered in tandem with the latest UK employment data, the BoE’s estimates of the amount of slack in the economy will be one of the most closely watched metrics. At the last quarterly inflation report in May, the BoE estimated the amount of spare capacity was between 1 – 1.5 per cent, judging there was room for this to narrow further before rates tightened.
By Sarah O’Connor and Claer Barrett
♦ Italy’s dire jobless figures have shattered a fragile optimism as the country’s political disarray increases, writes Guy Dinmore.
♦ David Pilling looks at the emergence of anti-establishment figures in Asia who are challenging the prevailing order in a year which will see elections across the region.
♦ Chris Giles says now that the Bank of England has been proved wrong over its forecasts on unemployment it is time the governor considered raising interest rates.
♦ Foreign Policy profiles the duelling protest movements that underline the spirit of division in post-revolutionary Tunisia. The journal also shines a light on a dangerous new front it says has opened up in Syria.
♦ Barack Obama has been boasting for two years that he “ended the war in Iraq, writes Peter Baker in The New York Times, as he describes the grim aftermath left behind.
Robert Gates, who served both Republican and Democratic presidents, has lifted the lid on his time running the Pentagon. Politico reviews his candid memoir.
♦ The FT’s Neil Buckley interviews Mikhail Khodorkovsky, Russia’s most famous prisoner – a former oligarch who dared to cross Vladimir Putin.
♦ Trade has broken from a 30-year trend of growing at twice the speed of the global economy, pushing economists to wonder whether there has been a fundamental shift in world business.
♦ The Palestinians have called on countries to tell companies linked to Jewish settlements in the West Bank and East Jerusalem to withdraw immediately because the settlements violate international law.
♦ Mark Carney says the Bank of England is open for business and the days when the Old Lady preached the perils of “moral hazard” without due regard to financial pressures are well and truly over.
♦ The allegation by the German government that the NSA monitored Angela Merkel’s mobile phone has set off recriminations behind the scenes in the US.
♦ The NYT looks at the friction point between the Philiippines and China in the South China Sea, reporting from a ship at the dividing line.
♦ Formula 1 is considered entertainment, not a sport, by the Indian government, while chess is considered to be a sporting event.
♦ There is some disbelief over Al-Sisi mania.
♦ Tony Blair in the the Balkans to deliver some “deliverology”.
By Catherine Contiguglia
♦ An era of “digital hippies” answered the needs of crunched budgets with start-ups that focused on building communities where goods and services could be traded and shared. Their success has resulted in a regulatory backlash as traditional businesses and tax collectors look for their fair share.
♦ Obama has not been able to take control and “unwind” the “war on terror apparatus”, writes the FT’s Geoff Dyer, instead stoking jitters with increased security levels, vague warnings of Al Qaeda resurgence and lack of transparency regarding surveillance programs.
♦ Bank of England interest rates will remain at the historic low of 0.5 per cent until unemployment falls to 7 percent, new governor Mark Carney has pledged, saying that the economy has not reached escape velocity. It appears Carney is wary of removing stimulus measures too quickly, but will this forward guidance be enough?
♦ General Abdul Fattah Sissi, who led the coup to depose Mohamed Morsi, seems a popular choice to lead an increasingly divided country. Sissi is often cast as a modern Gamal Abdel Nasser, and though his western military training has not softened his views on the United States, he is seen as a leader that is dedicated to bringing liberal democracy to Egypt.
♦ The decision by US President Barack Obama to cancel talks with Russian president Vladimir Putin after NSA whistleblower Edward Snowden was granted temporary asylum is a sort of boiling point in a series of uncomfortable conversations between the two nations since Obama announced his plans to “reset” relations.
Photo: Jean-Paul Pelissier/Reuters
Welcome back to the FT’s live coverage of the eurozone debt crisis and its global fallout. By John Aglionby, Tom Burgis and Esther Bintliff on the news desk in London with contributions from correspondents around the world.
Pressure is once again mounting on eurozone leaders to find a convincing solution to the sovereign debt crisis. Today:
Mario Draghi, the head of the European Central Bank made a key speech to the European Parliament, hinting at greater ECB action if governments moved towards a “fiscal compact”
- France and Spain held bond auctions
- French president Nicolas Sarkozy addressed the nation on his plan to resolve the crisis – he sided with Angela Merkel in calling for treaty change, said he was convinced the ECB would act “when faced with the risk of deflation that threatens Europe”, and called for greater fiscal integration
- The Bank of England issued its six-monthly financial stability report. Sir Mervyn King, governor, said the eurozone debt crisis is triggering a spiral that is characteristic of nothing short of a crisis to the entire financial system
- The world’s biggest economies reported key manufacturing data
- Christine Lagarde said the G20 would commit the necessary resources for the IMF to play its “systemic role” if circumstances required (see our 19.44 update)
- Brazil’s finance minister Guido Mantega said Brazil was willing to contribute funds to the IMF to help alleviate the eurozone crisis, noting: “This time, the IMF did not come here bringing money as in the past… This time it came to ask Brazil to lend it money and I prefer to be a creditor than a debtor.”
22.32: Tony Barber, the FT’s Europe editor in London, has been analysing the landmark speech by French president Nicolas Sarkozy and offers these insights:
Jean-Claude Trichet. Image by Getty
Welcome to our continuing coverage of the eurozone crisis.
All times are London time.
Curated by John Aglionby and David Crouch on the world news desk in London, with contributions from FT correspondents around the world – and today a special focus from Money Supply’s Claire Jones on the last press conference by Jean-Claude Trichet as president of the European Central Bank.
19.09. We are wrapping up the live blog in London. Thanks for reading. You can continue to follow our eurozone coverage at www.ft.com/world and on twitter at @ftworldnews
18.49 So what do analysts make of Mr Trichet’s record? He received a mixed score in an FT poll.
Gerard Lyons at Standard Chartered gives him five out of ten:
Jean-Claude Trichet has stuck to the mandate. But he should have taken a far broader view. He missed the crisis and he shouldn’t have raised rates this year