11.35 Robert Miller's Business Bullet brings you the main City news as inter-broker dealer Tullet Prebon makes ?10m cost-cutting provision; Swiss National Bank boss under fire over wife's foreign exchange deal; infrastructure group Costain boost forward order book to ?2.5bn and Clinton Cards revereses sales decline in Christmas run-up.
11.08 David Cameron was in Maidenhead earlier today talking to small and medium-sized businesses. He warned that this year will be "difficult":
... and even earlier this morning, deputy PM Nick Clegg said "no one planned" for the UK's EU isolation over Cameron's veto last month.
10.58 The Telegraph's Jeremy Warner has tweeted on the UK economy:
But while one sector of the economy is doing better, the housing market is still struggling - the number of mortgages approved by banks is dropping fast:
10.56 Hungary very much in the spotlight as traders fear a debt default. Today the country has sold 35bn-worth of florints, less than planned 45bn florints. Average yield jumps to 9.96pc. The minister in charge of talks with the IMF says his nation wants a deal with the International Monetary Fund "as soon as possible".
10.46 Billionaire investor George Soros said a fracturing of the euro area would have ?catastrophic? consequences and that markets have started pricing in the possibility of the region breaking up.
The disintegration of the 17-nation currency bloc would affect Europe and the ?entire global financial system,? he added. Markets are ?far from equilibrium and extremely difficult to predict using the yardsticks or methods that were used in the past,? Soros said, adding investors ?have to play it safe? and that ?unless you can anticipate events correctly, it?s better to do nothing than to keep on losing money.?
10.38 Italian stock market down 2.7pc at the moment on debt fears, bank share suspensions and high bond yields.
10.26 Some reaction to France's semi-successful ?8bn bond auction.
Michael Leister, a strategist at DZ Bank, said:
Overall it's a pretty solid auction. When you look at things like bid cover and particularly the price action going into the auction, where quite a concession was built in, it's nothing to get excited about. But, at the same time it should be enough to dispel concerns with regards to France's funding capacity for the time being.
10.16 Markit claims UK economy saw no growth in Q4 after its latest services sector PMI showed activity at its highest level since July.
10.13 CAC down 1pc after that French bond auction. FTSE 100 not far behind with a fall of 0.6pc. Euro falls to $1.2832 - a 15-month low, but sterling rises to its highest in nearly 16 months versus the euro. The pound climbed 0.4pc to 82.58p per euro.
10.09 Eurozone industrial orders have risen 1.1pc year-on-year. Very disappointing as experts had predicted a 3.3pc rise.
BREAKING NEWS...
10.07 France sells 2041 bonds at average yield of 3.97pc versus 3.94pc in December. Sells 2021 bonds at an average yield of 2.29pc against 3.18pc in December. But id-to-cover drops significantly to its lowest since October 2010.
09.48 Bank of England says default rates for big and medium-sized firms reported to have risen for first time in two years.
09.45 The Bank of England has been updating on the UK economy. It has said that UK banks have warned that the euro crisis and funding costs may hit credit availability. However, the central bank expects credit availability to increase a little in Q1, but demand will fall. Demand fell sharply in Q4.
I wonder what David Cameron makes of this? Earlier he told small businesses in Maidenhead that Government is pushing banks to lend more. But if the demand isn't there...
09.36 David Cameron: "Government is not a good customer for small business. But we will do everything possible to help them."
He suggests small businesses are innovators who could help Government reduce costs. Also tackles question on controversial solar panel subsidies. The Telegraph's Richard Tyler is there:
09.31 UK Services PMI at 54 in December, up from 52.1 in November (anything over 50 signifies growth). Fastest rise in activity and new businesses for five months. But expectations fall back to September's two-and-a-half-year low.
Neville Hill at Credit Suisse:
I guess the PMI services is encouraging alongside the manufacturing and construction numbers we've had also this week. It does suggest that, after what looks as if it could be a pretty poor fourth quarter of 2011, as if the economy has regained a bit of momentum going into 2012. And that probably means that even if the fourth quarter growth numbers are negative the UK could successfully skirt recession rather than go through another double dip. So it looks as if the UK is going to get out of recession by the skin of its teeth to some extent and growth potential will be stronger in the first quarter of next year.
Rare good news for UK!
09.28 EU summit of March 1-2 will discuss the size of rescue fund financing, says French PM Francois Fillon. He adds that he is determined to implement the financial transaction tax.
09.12 BREAKING NEWS...
Italian 10-year bond yields have hit 7.02pc. Anything above 7pc is widely considered to make borrowing costs unnaffordable.
09.06 The Telegraph's Enterprise Editor Richard Tyler is tweeting from Maidenhead, where the PM is meeting small and medium-sized enterprises:
09.01 Ahead of a key French bond auction later today, here is a graph comparing the UK, French and German economies:
(for a larger version of this graph, click the right-hand-side of the main image at the top of this blog)
France has been under pressure since mid December when its AAA status was put under review and saw spreads against the benchmark German Bund widen considerably, putting further pressure on France's ability to service its debt
08.57 Big problems for Italy's largest lender Unicredit. THe bank's shares have been suspended for a second consecutive day after falling 7.9pc. They were halted yesterday after falling around 10pc. It's recent problems stem from the launch of a deeply-discounted ?7.5bn (?6.2bn) cash call.
Meanwhile, Italy's unemployment rate for November has climbed to 8.6pc. Young adult jobless rate climbs above 30pc for first time.
08.49 Euro hits year-low of 128.87. Sebastien Galy at Societe Generale said:
It hasn?t taken much for the euro-bears to get the upper hand again. Financial problems in Spain?s regions are the latest catalyst but investors remain unconvinced by the latest proposals to move forward to a credible financial structure for the Euro zone. Europe suffers a balance of payments crisis despite not having a current account deficit.
08.47 Markets have turned negative on eurozone debt fears, and investors are getting nervous over today's key French bond auction.
FTSE 100 -0.2pc
CAC -0.5pc
DAX 0.3pc
IBEX -1.2pc
MIB - 0.8pc
08.31 The Sunday Telegraph's Business Editor Kamal Ahmed:
Yields on 10-year Spanish government paper have risen by 15 basis points to 5.4pc, widening their spread above German bonds to 350 basis points.
08.19 Deputy Prime Minister Nick Clegg has told Radio 4 that there is a need to be as tough as last year on bank bonuses:
It's the Liberal Democrats who have led the debate on clamping down on bankers' bonuses and we must be just as tough this year in the bonus season that's coming up as we were last year, if not more so.
He also said he was presented with a fait accomplit regarding David Cameron's EU summit veto. "I was told the outcome was as it was," he said. He added that "no one planned for an outcome" in which the UK was in a minority of one. Clegg also said that he "doesn't want to get into the twists and turns of what happened in the dead of night", regarding the veto.
He also hoped there would be new "anti-abuse rule" on tax avoidance.
08.09 More from Nouriel Roubini:
08.05 One of the top stories in our Finance section today is Louise Armitstead's article on Hungary cancelling a bond swap auction.
Hungary's forint has hit a new record against the euro for the third consecutive day: 321.6 (+1.3pc)
08.03 European markets are open. The FTSE 100 has opened up 0.2pc, the CAC is up 0.1pc, the DAX is up 0.2pc, the IBEX is up 0.1pc and Italy's MIB is flat.
07.59 Top economist Nouriel Roubini is tweeting:
07.51 Telegraph City Editor Richard Fletcher is on Twitter rounding up the big news to come today:
Sign up for his daily email on his webpage.
07.46 A really interesting graph showing how the cost of protecting against default is generally lower in democratic countries:
(for a larger version of this graph, click the right-hand-side of the main image at the top of this blog)
07.28 First dribbles of economic data emerging. Irish services PMI falls to 48.4 in December, down from 52.7 in November. That's a contraction of the sector and the lowest level since December 2010. Economist Nouriel Roubini believes Ireland is double-dipping.
German retail sales fell 0.9pc in November month-on-month against an expected 0.2pc gain. The previous month's figures were revised down from 0.7pc to -0.2pc.
07.28 Which country will grow the fastest in 2012? According to The Economist, it's Libya. They claim the nation will be boosted by reconstruction following the fall of Muammar Gaddafi?s regime.
(for a larger version of this graph, click the right-hand-side of the main image at the top of this blog)
07.23 RBS could axe 10,000 jobs as it dramatically downsizes its global banking and markets division. The Telegraph's Harry Wilson writes:
07.15 Here's the morning's latests corporate news: British interdealer broker Tullett Prebon will take cost-cutting measures in the first half of 2012 and that previous steps to reduce costs would lead to a ?10m charge for its 2011 results.
Carillion has been appointed preferred bidder for a 12-year highway maintenance contract in Canada worth more than ?100m.
Balfour Beatty has secured a five-year extension to its existing contract with National Grid to maintain and upgrade the UK's electricity transmission network in an agreement worth up to ?750m.
Sales at Clinton Cards rose 0.8pc in the run-up to Christmas but the group was dragged down by Birthday shops, which saw sales fall 2.7pc. JJB Sports sales rose 5pc.
07.00 We also have a key ?8bn French bond auction later today, so investors, markets and general euro fans will be keeping a close eye on that.
06.54 Today we are expecting UK services PMI at 9.30am, more inflation figures from the eurozone at 10am, and jobless claims data from the US at 1.30pm (GMT). We'll have the latest here.
Hopefully the UK services figures will be as positive as yesterday's data from around the EU. Yesterday was a good day for numbers.
European markets will open at 8am, with the FTSE 100 predicted to open up 0.2pc. Asian shares have eased as concerns about the ability of eurozone countries to refinance their huge public debt dampened investors' appetite for risk. Japan's Nikkei slipped from Wednesday's three-week high to trade down 0.8pc
06.45 The big news still affecting the financial world is Greece warning that it could run out of money in March if unions don't agree to cuts. Greek Prime Minister Lucas Papademos said:
Without the agreement and the funding linked to it, Greece faces an immediate danger of uncontrolled default in March. We cannot expect other EU states and international organisations to continue to fund a country that does not adapt to reality and does not deal with its problems. Our decisions and actions will not only determine the country's ability to return to a viable stabilisation course but our very future in the euro.
Meanwhile, Spain says its banks must put aside up to ?50bn in further provisions on their bad property assets as part of new reforms. However, the government has ruled out the creation of a bad-asset bank.
Also, there are reports that Kodak is preparing for Chapter 11 filing.
06.41 Telegraph head of business Damian Reece has penned a very interesting comment on the Laboratory of the Government Chemist (LGC).
"However, it may surprise readers to learn that forensic tests for criminal prosecutions of huge public importance, such as the Stephen Lawrence case, are not carried out by police scientists working in government laboratories. Far from it. Such crucial public services are provided to the state's prosecution arm by LGC which is a private company.
06.35 Elsewhere, in the business pages of the papers:
The Telegraph: Hungary faces crisis as traders fear debt default
The Guardian: Fears of new credit crunch as banks deposit record 453bn with ECB
The Times: Thomas Cook can't afford pay-off for man who steered it towards rocks
Financial Times: Spanish banks face extra hit of ?50bn
Daily Mail: Pay panel axed in Thomas Cook coup
Independent: High street slowdown hits next and John Lewis
06.33 Here's the Telegraph's front page this morning, leading on a controversial medical story:
06.30 Good morning and welcome back to live coverage of the debt crisis.
Debt crisis live: archive
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