G7 finance ministers and central bankers gathered in Japan discuss weak global growth and Brexit risks
6.11pm BST
The number of oil rigs in use in the US was unchanged last week after eight weeks of falls.
Total rig numbers dropped by 2 to 404, according to the weekly Baker Hughes rig count. The two rigs cut were for gas.
5.29pm BST
#Greece PM Tsipras and #France president Hollande hold phone call, talk Greek debt relief & #EgyptAir MS804 ~official
5.17pm BST
After Thursday’s market falls on fears of a US interest rate rise in June, investors ended the week in a more positive mood as they decided those fears may have been overdone. Much of the previous day’s declines were regained, with banks and mining shares among the main risers. Tony Cross, market analyst at Trustnet Direct, said:
After charging higher at the open, London’s FTSE-100 has done a sterling effort of holding onto those gains through the session despite the abject lack of fresh fundamental data to work on. The concerns of a US rate hike that were largely responsible for driving yesterday’s sell-off have been side lined, although the market still seems to be thinking that the chance of monetary policy tightening in June remains well below 50%.
3.40pm BST
Speaking of next week’s agenda:
#Economics next week: flash #PMI, revised #GDP numbers in UK + US, #EZ consumer confidence https://t.co/AkIml0QfPH pic.twitter.com/wcuzP7E9Ha
3.35pm BST
Wall Street continues to recover, with the Dow Jones Industrial Average now up 104 points or 0.6%. Connor Campbell, financial analysts at Spreadex, said:
A strong open from the Dow Jones ensured Europe brought its gains into the afternoon, though there was little actual reason for Friday’s chunky growth beyond cooler heads prevailing after two days of rate-hike fearing losses.
[But] the Dow Jones is still on track for one of its worst weeks (and months) in a while. Monday and Tuesday saw the index pushing 17800 thanks to the Goldman Sachs-inspired surge from Brent Crude. Yet since then the Dow has suffered, with first the best US inflation figure since February 2013, and then that surprisingly hawkish set of Fed meeting minutes from April, spooking the index’s rate-hike adverse investors.
3.10pm BST
More signs of a strong US housing market.
Existing home sales rose by 1.7% in April to an annual rate of 5.45m, better than the 5.4m expected by economists. March’s figure was revised up from 5.33m to 5.36m.
Primarily driven by a convincing jump in the Midwest, where home prices are most affordable, sales activity overall was at a healthy pace last month as very low mortgage rates and modest seasonal inventory gains encouraged more households to search for and close on a home. Except for in the West — where supply shortages and stark price growth are hampering buyers the most — sales are meaningfully higher than a year ago in much of the country.
2.48pm BST
Now here’s something.
Tesco Bank boss Benny Higgins spent more than £18,000 on taxis in eight months despite a clampdown in costs at all the supermarket’s operations. Sarah Butler’s full story is here:
Related: Tesco Bank boss Benny Higgins spent more than £18,000 on taxis
2.47pm BST
The rebound in global markets continues as Wall Street opens.
As investors came to terms with all the talk of a US rate rise next month, the Dow Jones Industrial Average has recovered 78 points or 0.45% in early trading. The S&P 500 opened 0.25% higher and Nasdaq climbed 0.39%.
William Dudley of the New York Fed [gave] the game away somewhat...when he said that market pricing of Fed hike odds was way too low prior to the minutes, which would suggest that the events of the past week or so have been predominantly a process of expectations realignment. He also suggested that a move in July was probably more likely given the proximity of the UK vote.
2.34pm BST
Consumer confidence in Belgium stabilised in May after falling for four consecutive months, according to the latest survey from the National Bank of Belgium.
The index stood at -8, the same as April and the Bank said:
On the one hand, consumers’ forecasts for macroeconomic developments in Belgium have got gloomier. Fears of a rise in the unemployment rate over the next twelve months have grown considerably, while expectations about the general economic situation have been revised downwards slightly.
On the other hand, households have become more optimistic about their own personal situation. They are now expecting their finances to improve a little over the coming year, and, notably, to save more money.
2.24pm BST
Back with Brexit and European Commission president Jean-Claude Juncker has said the UK will not get friendly treatment from the EU if it votes to leave. He told Le Monde that “Deserters will not be welcomed with open arms.”
My colleague Andrew Sparrow has the details in the politics live blog:
Related: UK will not get friendly treatment from EU if it leaves, says Juncker - Politics live
2.22pm BST
European Union commissioner Pierre Moscovici - who warned there was no Plan B in the event of Brexit - has also been talking about Greece, ahead of the country’s vote on reforms this weekend and Tuesday’s Eurogroup meeting.
He said the EU was making good progress on Greece and said he hoped to reach a global deal on Greek debt soon. Ensuring the sustainability of Greek debt was fundamental, he added.
A multi-bill bundling together a series of reforms that Greece must legislate to unlock further rescue loans was approved by a parliamentary committee on Friday ahead of a plenary session vote on Sunday.
The bill, which details a slew of new tax increases, a new privatization fund, and a contingency mechanism that would automatically cut state spending if Greece misses budget targets, was backed by leftist SYRIZA and rightwing Independent Greeks who form the governing coalition.
2.03pm BST
Meanwhile, in China health authorities have slashed the prices of three expensive drugs made by Britain’s GlaxoSmithKline and AstraZeneca, and China’s Betta Pharmaceuticals. Reuters reports:
The National Health and Family Planning Commission said the cost of GSK’s hepatitis B drug Viread would fall to 490 yuan ($75) a month from 1,500, while AstraZeneca’s lung cancer pill Iressa drops to 7,000 yuan from 15,000. Icotinib, another lung cancer drug made by Betta Pharmaceuticals, will come down to 5,500 from 12,000 yuan a month.
1.50pm BST
At the G7 summit in Japan, US Treasury Secretary Jack Lew said the G7 finance leaders need to find ways to use all the “policy levers” they have to ward off a global economic slowdown.
Finance ministers and heads of central banks spent Friday discussing ways to use monetary policy, government spending and longer-term reforms to help support growth.
The G-7 is meeting at a significant time not because it’s a time of crisis, but it’s a time when there’s a lot of uncertainty in the global economy and there a need for us to talk to each other about what we’re seeing and what tools we have to use to promote the most balanced use of all the policy levers that we have.
1.29pm BST
The Brexit impact is still tough to quantify, says Allan Monks at JPMorgan Chase, following comments by Bank of England policy maker Kristin Forbes this morning.
While signs of an EU referendum-related impact on the UK growth data have become clearer in recent weeks – a story that so many had been waiting to tell – we have argued that there could still be other factors at work too, including a fragile global backdrop.
These sentiments were echoed in comments by MPC member Kristin Forbes in an interview with the Belfast Telegraph today. Another member, Jan Vlieghe, yesterday also highlighted that policy easing cannot be dismissed even under a vote to remain – if, for example, growth failed to recover from its current soft patch.
11.55am BST
European Union commissioner Pierre Moscovici has said that policymakers “have no plan B” if Britain voted to leave the EU in June.
He told reporters on the sidelines of the G7 finance ministers’ summit in Sendai in northern Japan:
We have no plan B for Brexit. Our only plan is for Britain to remain in a united Europe.
11.39am BST
Looks like something was lost in translation. A Japanese finance ministry official has clarified, again according to Reuters, that Asō meant to say that some European ministers thought it would be good for the UK to stay in the EU.
11.32am BST
Some snaps from the G7 meeting in Japan on Reuters.
The EU commissioner Pierre Moscovici said the general mood among G7 countries suggested that they wanted Britain to stay in the EU. But according to the Japanese finance minister Tarō Asō, some European countries thought Brexit would be good in the long run.
11.19am BST
British factory output is rising at the strongest pace since August, according to a survey from the Confederation of British Industry. Order books also improved, although they continued to decline.
The survey of 489 manufacturers found that a rebound in the food and drink sector, following flooding in parts of the country earlier this year, drove an increase in overall output in the three months to May. Excluding food and drink, the output balance was stable, with the other 17 manufacturing sectors showing minimal movement.
Conditions in the manufacturing sector seem to be a little better overall, with improving order books compared with a couple of months ago. But domestic and global uncertainty remains high, alongside lacklustre export demand.
Despite recent choppiness in emerging markets, China and India remain significant sources of potential demand. An exports commission would enable exporters to better exploit the growth opportunities provided by these and other growth markets.
11.02am BST
Several European Central Bank policymakers have backed president Mario Draghi’s wait-and-see stance today. The ECB unveiled a big stimulus package in March but several key elements, such as like corporate debt purchases and new ultra-cheap loans to banks, have yet to be implemented.
Draghi called for patience last month, dampening market expectations for more stimulus.
The monetary policy stance should remain broadly accommodative at this point ... [and we need] to maintain a degree of patience. A lot of accommodation that has been decided already is still in the pipeline and it will work its way through.
Interest rates can still be lower still and we are now testing how low they can go. But if this tool must continue to be used, then I must urge caution so [we do not] bring about a totally counterproductive threat to financial stability.
The scope for deploying standard instruments is almost exhausted.
10.50am BST
Eurostar has said that passenger numbers have fallen in the wake of the Paris and Brussels terror attacks, as people from the US and Asia have been afraid to travel to Europe. You can read more here.
And here is our full story about France’s fears over the planned £21bn merger between the London Stock Exchange and Deutsche Börse.
10.35am BST
Oil prices are pushing higher today, getting close to six-month highs, as the global oil glut eased due to a series of production outages in Nigeria, Canada and Libya.
Brent crude, the global benchmark, is now trading at $48.86 after rising to $49.26 earlier, close to the six-month high of $49.85 reached a couple of days ago.
10.09am BST
In Japan, finance ministers and central bankers from the G7 industrialised nations are gathering to discuss what to do about flagging global growth.
George Osborne is there –
Getting bullet train to #G7 in #Sendai -beautiful part of Japan that suffered terribly from tsunami but rebuilding pic.twitter.com/xPRgNpsqIY
10.03am BST
The pound is having a good week. It has retreated somewhat after hitting a 3 1/2 month high against a trade-weighted basket of currencies yesterday, but remains on track for its best weekly performance in nearly 10 months – up 2% this week.
Sterling has been boosted by strong retail sales numbers for April and an opinion poll suggesting that the “remain” camp had extended its lead ahead of the 23 June referendum on EU membership. An Ipsos-Mori poll found 55% of those surveyed supported staying in the EU, while just 37% wanted to leave.
8.50am BST
The planned £21bn merger between the London Stock Exchange and Deutsche Börse raises competition concerns, the French finance minister, Michel Sapin, has said.
His comments echoed those made by economy minister Emmanuel Macron in February, but Sapin’s comments carry more weight as he is in charge of banking and financial industry issues in France.
I want to express the concern of the French government on this tie-up. We have doubts about the consequences this could have for the financing of the real economy in France and Europe.”
The merger of these two entities will result in a large group which could hold within it a majority of the tools that make our markets function efficiently. That poses a competition problem, and we want to make sure the European Commission gets involved to avoid a situation where a dominant position arises.
8.36am BST
European stock markets have opened higher, as expected.
8.22am BST
Here in Britain, Ladbrokes and Coral could be forced to sell up to 400 betting shops if the £2.3bn merger of the two bookmakers is to go ahead, the competition regulator has said.
The Competition and Markets Authority said the proposed merger between Britain’s second and third largest betting shop chains would reduce choice for customers in “a large number of local areas”.
8.20am BST
Turning to corporate news...
Deutsche Bank suffered a damaging investor revolt over executive pay last night. Germany’s biggest lender held its annual meeting in Frankfurt yesterday, where more than half of shareholders (51.9%) voted against a new pay scheme for its top executives, and just 48.1% backed it. The vote was non-binding, however.
I am cautiously confident that we are gradually approaching the home straight as far as our litigation is concerned.
8.07am BST
A Bank of England policymaker, Kristin Forbes, has said that the central bank had no concrete evidence that recent weaker UK economic data was all related to uncertainty surrounding the outcome of the 23 June referendum on EU membership.
She told the Belfast Telegraph during a visit to Northern Ireland that she believed the uncertainty was weighing on businesses and their investment plans, and that any doubts could be lifted quite quickly if there is a “remain” vote.
We don’t have concrete evidence that some of the softening we are seeing now is all referendum-related and uncertainty related, and there is a chance other things are going on.
8.02am BST
Meanwhile, a senior International Monetary Fund official said last night that negotiations on a new bailout programme for Greece should focus on a long grace period and maturity extensions along with “very low interest rates”.
IMF chief spokesman Gerry Rice also said that the fund’s board won’t approve a new bailout unless it contains debt relief measures from European lenders along with policies to boost Greece’s fiscal savings.
We have exchanged preliminary views with our partners on general principles regarding debt relief. We believe that it is possible to restore debt sustainability without upfront haircuts, although this would involve providing very concessional loan terms, including long grace and maturity periods and very low interest rates.
7.53am BST
A European Central Bank policymaker has poured cold water on hopes that the central bank could cut interest rates further. Benoit Coeuré, member of the ECB’s executive board, said there are no plans to reduce the deposit rate – which is in negative territory, at -0.4% – for the time being.
The negative deposit rate, effectively a charge on banks for hoarding cash, has been criticised by banks and investors for squeezing their profits and distorting financial markets.
It is in principle possible to cut this rate further, but there is currently no plan to do so.
7.33am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.
Signs of hawkishness among US Federal Reserve members sent global markets tumbling yesterday, marking another disappointing week for stocks. US markets finished lower but recovered from the lows hit earlier in the day.
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