The IMF's Christine Lagarde has said the US government's debt reduction plans are too abrupt, including the $85 billion in federal budget cuts known as the sequester. She said that if current policies are maintained this year "the US economy would be contracting by over one and a half percent."
• Eurogroup head: Cyprus bailout deal was 'best possible' • HSBC (LSE: HSBA.L - news) profits jump to $8.4bn in first quarter • German factory orders in surprise 2.2pc jump • French industrial output drops in March • Lawson (Other OTC: LWSOF - news) : Cameron must lead Britain out of EU • Paul Walsh to step down as Diageo (LSE: DGE.L - news) chief exec
17.35 And that is where we are going to leave the blog for today.
As always you can follow all the latest news here and we will be back in the morning with the latest instalment of the live blog.
Thank you for following and have a good evening.
17.27 More from that conference in Brussels today where Jeroen Dijsselbloem, the chairman of eurozone finance ministers, has warned that uninsured depositors and bondholders in eurozone banks could face imposed losses following stress tests carried out before a “single-supervisory mechanism” headed by the European Central Bank begins work next June.
Bruno Waterfield reports:
Jeroen Dijsselbloem, the chairman of eurozone finance ministers, warned that that the ECB checks on the quality of banking assets could lead to banks being shut down, highlighting the need for eurozone agreement on bank resolution rules this summer.
The prospect of eurozone banks facing closure will alarm British expatriates who live and have transferred their savings, proceeds from house sales and other assets to eurozone bank accounts in countries such as France, Spain and Italy.
“The first thing that the ECB will have to do when they take on their supervisory task is to have an asset-quality review of the main banks that will be under their supervision and I think very soon after that all the other banks in Europe as well because there is still the risk of contamination between banks,” Mr Dijsselbloem said.
“The outcome of that asset quality review we don't know yet, but it might be worrying. It might be worrying for some banks in some countries. We don’t exactly know. What I do know is that when we do have an outcome that is worrying, we need to have the instruments to deal with the problems.”
17.05 More on the "high-level conference" which has been going on all day with the aim of discussing a "blueprint" for a European monetary union.
Jose Manuel Barroso, president of the European Commission, has declared that while a fully fledged Europe may seem like "political science fiction" today, soon it will become reality for all European Union countries, whether inside or outside the euro.
The Telegraph's Bruno Waterfield, who is at the conference, reports:
The president of the European Commission has fanned the flames of British debate over EU membership by insisting that fiscal union in the eurozone will lead to "intensified political union" for all 27 member states.
"This is about the economic and monetary union but for the EU as a whole," he said.
"The commission will, therefore, set out its views and explicit ideas for treaty change in order for them to be debated before the European elections."
"We want to put all the elements on the table, in a clear and consistent way, even if some of them may sound like political science fiction today. They will be reality in a few years' time."
Mr Barroso's announcement that he will set out plans for a European federation next spring, before elections to the European Parliament in May 2014, will further deepen Conservative divisions over the EU.
European Commission President Jose Manuel Barroso speaking during a conference on the European Monetary Union at EU headquarters in Brussels. Photo: AP/Virginia Mayo
16.54 And a final look at markets which have closed for the day and after a slow start, stock market trading in Europe has had a strong finish.
The FTSE 100 has ended up 0.6pc at 6,557.3, a fresh closing five-year high, while in Germany the Dax (Xetra: ^GDAXI - news) climbed 0.9pc to a new record high, boosted by better than expected factory order data.
16.43 As mentioned (see 15.13), the IMF's Christine Lagarde is in Amsterdam today talking to students. Well when the protests ended, she was finally able to deliver her speech.
She has criticised the US government's budget policies as too abrupt. AP reports:
Lagarde said the US government's debt reduction plans are too abrupt, including the $85 billion in federal budget cuts known as the sequester. She said that if current policies are maintained this year "the US economy would be contracting by over one and a half percent."
The IMF's most recent forecast in April said the US economy would grow 2pc this year - 1.75 percentage points lower than it otherwise would have been due to the tax hikes and spending cuts. The sequester alone would reduce growth by 0.5 percentage points in all if maintained to the end of 2013.
The U.S. "should consolidate less in the short term, but give...economic actors the certainty that there will be fiscal consolidation going forward," she said.
Lagarde also reiterated her stance that austerity policies alone cannot lead to growth, but added that they do not have to be exclusive to each other.
She praised a recent European Commission decision to allow France and the Netherlands more time to get their budget deficits down.
"The fact that they are allowing more time is a good move," she said.
One student attempted to pose a question out of turn later in her talk and guards began dragging him away. When he began questioning why Lagarde was only willing to field pre-approved questions, she intervened and asked him to be allowed to pose his question.
The guards allowed him to return, and he asked whether IMF aid doesn't usually end up disproportionately benefitting the rich.
She said economic reforms work better in countries with less income inequality, and the IMF tries to include that in its advice - which is not always heeded by governments.
"We're not imposing a particular system," she said, "We're trying to be rational about what can actually balance a country."
Christine Lagarde, director of the IMF, gives a lecture during the 'Room for Discussion' forum - a weekly interview program by and for students of the Faculty Economics and Business administration of the University of Amsterdam. Photo: EPA/LEX VAN LIESHOUT
16.24 Leaving Europe for a bit, a report out by CBI has said that British companies are feeling "schizophrenic” as a result of mixed messaging from politicians over their tax affairs". The Telegraph's Emma Rowley reports:
The business lobby group says the Government’s pro-enterprise drive, including cutting the corporation tax rate from 28pc to 20pc by 2015, is being muddied by its rhetoric on what companies pay.
“Many UK CEOs of global businesses have had telephone calls from their global CEOs somewhere else on the planet saying, 'We are just a bit confused,’” said John Cridland, director-general of the CBI.
“On the one hand we see this drive to make the UK the most tax-competitive capital in the G20. On the other hand, politicians are increasingly critical of business in Britain as somehow not paying its fair share in tax.
“That confusion of purpose are we making the UK more tax competitive? Are we sending signals that somehow big business can’t be trusted? needs reconciling.”
As well as the cuts to corporation tax, Mr Cridland pointed to the introduction of the patent box tax relief on research and development activities, as adding up to what he saw as the “most pro-enterprise, pro- invest in UK tax agenda” that he could remember.
15.40 There's been plenty of reaction today to Lord Lawson's suggestion that David Cameron should lead Britain out of the EU.
Alan Halsall, co-chairman of Business for Britain, has told the Telegraph that his members should consider voting to exit the EU if renegotiation talks do not end with concessions.
Business for Britain was set up to represent the views of firms who have reservations about the European Union. The group is polling members and hope to have a list of recommendations by the end of the year. It wants the Coalition Government will take those demands to Brussels.
Mr Halsall, who also owns Silver Cross Prams, gave an example of where he sees the EU failing, citing his own difficulty in selling prams in France due to what he sees as excessive legislation beyond Europe-wide standards.
15.13 At 07.52, we mentioned that Christine Lagarde is in Holland today. While in the Netherlands, she has been speaking to students at the University of Amsterdam. AP reports that she had just begun talking when she was interrupted by protestors chanting. AP writes:
One would call out "mic check!" and dozens more would yell back "Madame Lagarde!"
Then individual students challenged her as believing "technocracy better than democracy" and mocked for saying that Greeks should "help themselves...by paying all their tax."
Security guards dragged students away until there were none left shouting, and eventually the interview resumed.
Members of security eject a protestor during Christine Lagarde's lecture in Amsterdam. (Picture: AFP)
When not being interrupted by student protestors, Ms Lagarde criticised the US government's budget policies as too tight, saying that current policies - if maintained - could lead to a 1.5pc contraction in the US economy.
15.07 Ben Martin reports: US markets have followed the example set in Europe and moved higher in early trade, with the Dow Jones Industrial Average advancing 0.2pc, taking it back above the 15,000 level, and the broader S&P 500 putting on 0.3pc to a fresh record high. Investor sentiment across the pond has been bolstered by encouraging earnings from the likes of DirecTV (NasdaqGS: DTV - news) .
14.58 Back to that Portuguese debt sale that we mentioned at 11.39. The sale marked Portugal's return to the long-term debt market for the first time since its bailout two years ago and thus far, it has been hailed as a success.
AFP reports that Portugal's finance minister Vitor Gaspar told journalists: "It's been a great success. Demand has been three times greater than the offer, this means that it will reach €9bn."
Portugal was hoping to raise €3bn from the syndicated benchmark sale, with bidders looking for a return of around 5.6pc.
14.50 Jeroen Dijsselbloem 's Q&A in front of MEPs has drawn to a close. Peter Spiegel of the FT is not convinced that he's learned much:
14.45 Away from talk of Cyprus , data out today suggests that Germany has witnessed its biggest surge in immigration in almost 20 years. Behind the rise is an influx of people from countries hit by the eurozone crisis, including Spain, Italy and Greece.
Reuters reports that Germany's statistics office said today that 1.081m immigrants flocked to Germany last year, up 13pc from 2011 and the highest number since 1995.
The number of immigrants coming from Spain, Greece, Portugal and Italy surged by between 40 and 45pc compared to the prior year, although the total inflow from these countries remains well below that from Poland and Romania.
The crisis in countries such as Spain has prompted people to emigrate to Germany.
14.25 Jeroen Dijsselbloem, who is Dutch finance minister as well as head of the eurogroup, has been discussing the link between Cyprus' crisis and that of Greece. Open Europe tweets his comments:
13.58 When Cyprus was bailed out in March, the island imposed capital controls to prevent a run on deposits. Open Europe tweets Jeroen Dijsselbloem's comments on those controls:
13.54 Things are getting quite lively at the Q&A session at the European Parliament on Cyprus. Sylvie Goulard, a French politician, has just told Jeroen Dijsselbloem : "You're the most optimistic undertaker that I've met."
13.39 Thinktank Open Europe is listening to Jeroen Dijsselbloem 's Q&A on Cyprus. Here are some of their tweets:
13.29 Matina Stevis, a journalist with Dow Jones (DJI: ^DJI - news) and the Wall Street Journal, tweets that a European Parliament committee is about to start a Q&A session with Jeroen Dijsselbloem on Cyprus. She suspects it could be interesting. You can watch the proceedings here .
12.56 Let's get some City reaction to news today that Paul Walsh is to step down as chief executive of Diageo after 13 years at the helm of the drinks giant behind Guinness and Johnnie Walker (see 07.11). Martin Deboo, an analyst at Investec (LSE: INVP.L - news) , reckoned this was a "well-flagged change". He outlined the in-tray for Ivan Menezes, the new chief executive:
A well-managed and well-flagged transition. We see this as a well-flagged transition, with Menezes appointed as COO a year ago. Walsh will remain with the company for a further 12 months ‘to focus on transitioning critical partner and external relationships…including recent acquisitions.’
A game of two halves for Walsh? Walsh has been CEO for the exceptionally long period of 13 years. Since his appointment in September 2000, £100 invested in Diageo has grown to £538, relative to only £148 for the FTSE 100.
However £100 invested in arch-rival Pernod (Hold) at the same point is now worth £671.This reflects sharp out-performance in the 2000-2007 period, when Pernod’s shares quadrupled in value, while Diageo’s less than doubled.
Diageo only really got their share price outperformance mojo working from August 2011 onwards, with a much more vigorous strategy of top-line acceleration, cost reduction and bolt-on acquisitions in Emerging Markets.
A full in-tray for Menezes. We expect organic growth to be top of the agenda for now. Beyond that, the challenge for us is that of unlocking value strategically, using the still-unleveraged balance sheet. Exiting brewing and increasing focus on spirits continues to look compelling to us.
12.42 Herman van Rompuy , president of the European Union ( pictured below ), has weighed in on the debate about France's extra time to cut its deficit.
The European Commission on Friday gave France two more years to meet its deficit target of 3pc. France's finance minister, who over the weekend welcomed an end to the "dogma of austerity", has this morning said that the extra time does not mean France will relax the pace of its reforms.
AFP reports that Mr van Rompuy struck a cautious note, saying that the decision to give France extra time had not been formally taken by either the commission or the council.
Asked about Mr Moscovici's remarks on Sunday that the move marked the end of the union's "austerity dogma", Mr van Rompuy said:
"It's not for free. It's the result of past performances, and if this postponement is decided it will be related to further structural reforms in the future," he said, citing the labour market as an example.
12.14 Let's return for a moment to this "high-level conference" (mentioned at 10.03) where the likes of Jeroen Dijsselbloem are discussing a "blueprint" for a European monetary union.
Peter Spiegel of the Financial Times tweets that the best presentation of the morning has come from Portugal's finance minister Vitor Gaspar , who has made a plea to the EU to allow national governments to act on unemployment. The Telegraph 's Bruno Waterfield has also been listening to Gaspar. He tweets:
Figures out at the end of last month showed that eurozone unemployment had climbed to a record high of 12.1pc and in Portugal alone, it stands at 17.5pc.
12.06 Things don't look particularly sunny for support services firm, G4S , this morning. My colleague Alan Tovey calculates that the FTSE 100 (FTSE: ^FTSE - news) company has had just over £500m wiped off its market value this morning after it cautioned that margins would be under par this year.
We believe G4S’s developing market business and UK outsourcing business still represent a good growth opportunity for the business. The former of these now accounts for 37% of group profit and has good prospects to grow at double-digit levels. However, we still expect margin pressure to be sustained across the remainder of the business, particularly in manned security. In our view, this will continue to weigh on group performance and require further divestments and acquisitions to sustain the trajectory of growth.
12.02 Jeremy Warner has written his reaction to Lord Lawson, the former Chancellor, urging David Cameron to lead Britain out of the EU (see 07.07) . Here's a taster:
Lord Lawson is to be congratulated for articulating publicly what many senior Conservatives believe that the European Union is lost to Britain and that the sooner we leave it, the better.
The fact that Lawson was once quite closely identified with the Europhile wing of the party having backed entry into the European Exchange Rate Mechanism while Chancellor makes his case, argued in characteristically compelling fashion, all the more persuasive. At the end of his long article in the Times, he quotes Keynes: when the facts change, I change my mind, what do you do sir?
Yet though it is hard to argue with any of his main contentions that Britain gains little if anything from the single market, that creation of the euro makes the UK ever more powerless to influence European affairs, that the City would gain if freed from the insanity of Europe's regulatory overkill, that the EU is a political, not an economic project, and so on I think he underestimates, or at least chooses to ignore, the difficulty of Britain's position.
11.45 Ben Martin reports that back in the London stock market, weekend reports that a consortium bid for Eurasian Natural Resources Corporation is edging closer have lifted shares in the troubled miner 4.8pc, the biggest riser in the FTSE 100. The stakebuilding activities of Suleiman Kerimov , not one of the potential bidders, are also continuing to draw attention, with the Russian billionaire today disclosing he has raised his holding in ENRC to 3.06pc.
11.39 Over in Portugal , the country is poised to issue a new benchmark bond later today. Portugal intends to raise no more than €3bn through the debt sale.
The offering helps keep Portugal on track for exiting its bailout programme later this year.
11.17 Those better-than-expected German factory orders have lifted the euro this morning. The single currency rose to a session high against the dollar, ticking up 0.2pc to $1.3111 from £1.3077.
11.04 These figures might help bring a smile to Wolfgang Schaeuble ( pictured below ) during his meeting with the French finance minister. Data just out shows that German factory orders unexpectedly jumped for a second month in March. Orders rose 2.2pc from February, when they also increased 2.2pc. Economists had expected a 0.5pc fall.
That surprise jump suggests that Europe's economic powerhouse is starting to grow again.
10.42 More from that pow-wow between the French and German finance ministers this morning. Pierre Moscovici of France has said that Germany needs to be flexible and respect Europe's diversity and not just focus on rules and discipline.
"We have to beware of all caricatures" because they create ambiguous situations, he told students in Berlin.
"It is true that Germany is very attached traditionally to rules and discipline, which are things we need - but at the sime time we have to be capable of flexibility, of understanding and of respecting our diversity."
Reuters reports that with Mr Schaeuble sitting beside him, he said that the German finance minister "would perhaps not have spontaneously advised me to get an extension" to the French deficit goals, but that the German minister had expressed his understanding.
10.33 Ben Martin adds that European bourses are reaching fresh highs this morning: The gains seen in the mining sector have helped pull the FTSE 100 to a fresh five-year high today, having touched 6,547 in mid-morning trade. In Germany, the Dax , which reached record levels on Friday, has also climbed 0.7pc to a new all-time high.
10.15 On the markets , Ben Martin reports: Analysts at heavyweight broker Goldman Sachs (NYSE: GS-PB - news) have cast their eye over newly merged commodities giant Glencore Xstrata and have a cautious message for investors this morning. Staring their coverage of the group with a "neutral" rating, the broker's experts said:
Given Goldman Sachs’ commodity price forecasts, particularly for copper, thermal and met coal, we believe that debt levels will need to be lowered before shareholder returns can be lifted to differentiated levels versus peers. Glencore has the most potential to increase returns of peers on our estimates, but debt will likely need to be managed first.
Still, Glencore's shares are up 1.9pc with the wider mining sector. Meanwhile, HSBC continues to climb in the wake of its well-received first-quarter update and is up 3pc, the second-biggest gainer on the FTSE 100 .
10.11 Back with that meeting between Pierre Moscovici and Wolfgang Schaeuble (mentioned at 09.41), the German finance minister has said that Europe will get its banking union underway swiftly. Mr Schaeuble said Europe would get the union underway on the basis of current European treaties instead of waiting for treaty changes.
"It's a priority project," he said, adding: "We must make the best of it on the basis of the current treaties."
10.03 Also on the agenda this morning is a "high-level conference" to discuss a "blueprint" for a "deep and genuine" European monetary union. Jose Manuel Barroso , president of the European Commission, is giving the main address while Olli Rehn and Jeroen Dijsselbloem are also there ( watch here ). The Telegraph 's Bruno Waterfield is there. He tweets:
09.55 Pierre Moscovici's comments about the pace of economic reform come after he said this weekend that the "dogma of austerity" is coming to an end.
He told Europe 1 radio on Saturday that "we're witnessing the end of the dogma of austerity" as the only tool to fight the debt crisis. "We've been pleading for a growth policy for a year," he added. "Austerity on its own impedes growth".
France has been offered a two-year extension to meet EU deficit rules. However, German politicians are not too impressed by this delay. A spokesman for the Christian Democractic Union said earlier this month that France must show it's willing to tackle structural reforms.
Mr Moscovici has perhaps gone some way to assuaging those concerns this morning, assuring an audience in Germany that France will continue its efforts to tackle the structural deficit and will not use the extra time as an incentive to relax the pace of reform.
09.41 One of the more interesting events in Europe today is a chinwag between French finance minister Pierre Moscovici (pictured below) and his German counterpart, Wolfgang Schaeuble .
The European Commission has given France - which this morning revealed a slump in manufacturing activity - more time to get its deficit below the limit of 3pc of GDP. But Mr Moscovici said this morning that this does not mean France will slow down its economic reforms.
He said on a visit to Berlin today:
The flexibility accorded to us is not treated by us... as an incentive to relax the pace (of fiscal consolidation). We will continue our efforts to tackle the structural deficit.
France is a serious country conducting a credible policy, we do not renounce this (fiscal responsibility).
He added that fixing public finances should not choke off growth:
Of course, we have to make sure public finances are put right, but you have to carry out this exercise carefully, taking into account the natoinal situations and defining the right rhythm for preserving growth prospects.
09.28 HSBC has been helped by a fall in bad debts and costs. Losses from bad debts plunged by 51pc to $1.2bn and costs fell 10pc in the first quarter from a year ago, giving a fillip to Stuart Gulliver's drive to streamline operations, reduce complexity and cut businesses that are unprofitable or lack scale.
09.24 HSBC's shares have risen 2.4pc this morning. Pre-tax profits have come in slightly higher than analysts' expectations of $8.04bn.
09.20 HSBC has just published its results for the first quarter of the year. Pre-tax profits stand at $8.4bn (£5.4bn) compared to $4.3bn during the same quarter last year.
Stuart Gulliver, HSBC chief executive, said:
While continuing uncertainty in the global economy has created a relatively muted environment for revenue growth, we have increased revenue in key areas including residential mortgages and Commercial Banking in both our home markets of Hong Kong and the UK, and in our Financing and Equity Capital Markets business.
We have achieved further progress on the journey we started in 2011 to make HSBC easier to manage and control. The implementation of global standards will help ensure that we meet the commitments we made to the US and UK authorities as part of the settlement agreements reached at the end of last year.
Our performance in April continued the trend we saw in the first quarter. Looking at the macroeconomic environment, there are still challenges ahead. However, we expect the mainland Chinese economy to accelerate after a slower than expected start to the year; the US to continue to outperform its peers, although the pace of growth is slow compared to past standards; the eurozone to contract; emerging markets to grow at around 5% and global growth to be around 2% for 2013.
09.12 Britain's latest car sales figures are out. Sales accelerated last month, according to figures from the Society of Motor Manufacturers and Traders. There were a total of 163,357 new registrations in April 2013 - a 14.8pc rise on the April 2012 figure. The April 2013 increase was the 14th successive monthly rise.
09.08 Ben Martin reports that European bourses are lethargic this morning: The FTSE 100 has made little headway this morning, having risen just eight points, or just 0.1pc, although the picture is much the same in Europe. The Cac 40 in France is flat, while Germany's Dax and the Ibex in Spain are both up 0.1pc.
09.04 As we reported at 07.07, Lord Lawson, the former Chancellor, has said that David Cameron must lead Britain out of the EU . Deputy prime minister, Nick Clegg , has responded to those comments. He told ITV (LSE: ITV.L - news) 's Daybreak :
I think that if we were to leave the European Union we'd jeopardise up to three million jobs in this country that are dependent on our place in the world's largest border-less single market.
We'd make ourselves less safe, because we work in the European Union, to go after criminals who cross borders. It would be more difficult to deal with environmental challenges which cross borders.
We wouldn't be taken as seriously by the Americans who like the fact that we stand tall in our own European back yard.
08.51 The Guardian is this morning running an interview with the Nobel prize-winning economist Paul Krugman (pictured below), who is publishing a second edition of his book End This Depression Now . As The Guardian points out, Mr Krugman now has 1m followers on Twitter, with his tweets - and blog - becoming a focal point for the crusade against the argument that austerity can foster a recovery. The newspaper writes:
For such a sophisticated thinker, Krugman's solution which upsets some liberal supporters is straightforward. Asked if he is concerned a splurge of borrowing will trigger a repeat of the financial bubbles that caused the crash and spur inflation as too much money chases too few goods, he is dismissive. "As far as planting the seeds of the next crisis, bear in mind that leverage is still falling, so I don't see the problem at this point," he says.
In Krugman's view, concerns about ageing populations, looming health costs, the changing nature of the workforce in a digital age and competition from Asian economies for jobs, are for another time. "Should we be having more spending? The answer must be yes. Why? Because there is plenty of slack in the labour market and investment needs to increase. To me it is clear that there is plenty of room to increase spending without increasing inflation.
"What many people fail to see is that macro economics moves much more slowly than they think. You can read academic papers from the 1930s and after you strip out the arcane academic language, they could be written today."
08.34 Ben Martin reports: Volatile mining shares, which have a heavy weighting in the FTSE 100 , are helping the blue-chip index edge higher this morning, with Glencore Xstrata up 2.2pc, BHP Billiton (NYSE: BBL - news) 2.1pc higher, and Rio Tinto (Xetra: 855018 - news) rising 1.9pc. That has lifted the benchmark index seven points in early trade, with investor sentiment bolstered by news of further economic stimulus in Australia, where the central bank announced a rate cut overnight.
08.33 Twitter is not impressed by the 0.9pc fall in French industrial production, mentioned at 07.59:
08.13 Trading in London is off to a fairly muted start after the long Bank Holiday weekend, with the benchmark FTSE 100 up less than a point at 6,522 and the mid-cap FTSE 250 (FTSE: ^FTMC - news) edging 10 points higher. Ian Williams, strategist at City stockbroker Peel Hunt , says the gains seen at the end of last week, following the encouraging US jobs data, may be hard to follow:
History shows that gains are tough to maintain at this time of year and the bottom-up earnings news is struggling to support the move in valuations. The mid and small caps especially are still enduring regular profit disappointments.
The most eye-catching blue-chip mover is security group is security group G4S , which has tumbled 12pc in early deals in the wake of a disappointing trading update (07.43) .
08.12 Before we get some reaction to those French industry statistics, let's take a look at some action Down Under. Australia's central bank has today cut rates to a record low as it tries to temper the effects of a stubbornly high dollar.
The Reserve Bank of Australia eased rates by a quarter point to 2.75pc, taking rates below the nadir touched in the global financial crisis. But even after today's easing, Australian rates remain among the highest in the developed world.
Scott Haslem, chief economist at UBS (Xetra: UB0BL6 - news) , said the RBA appeared to have "simply grown weary of a high Aussie, while becoming more comfortable about the high pace of domestic inflation".
"This suggests even with our outlook for better growth, the cash rate in Australia is likely to remain low for longer than has normally been the case," he added.
08.01 A little more detail on those French figures. Manufacturing of transport equipment fell 2.4pc and making of food and drink dropped 2.1pc, but manufacturing of coke and refined petroleum products jumped 7.9pc.
07.59 Those French figures are now out. Statistics from Insee show that in March, France's manufacturing output dropped 1pc month on month while industrial production as a whole fell 0.9pc.
07.52 Let's have a look at what is on the agenda for today.
This morning, we're expecting French manufacturing and industry data; and at midday, German factory order statistics are due.
Christine Lagarde , head of the International Monetary Fund, is in Holland today. There, she will meet Jeroen Dijsselbloem, Dutch finance minister and head of the euro group.
07.43 G4S , the support services business which hit the headlines last year when it failed to provide enough security workers for the London Olympics, has updated on trading.
The FTSE 100 business says that margins this year could be lower than expected after a difficult first quarter in Europe.
G4S noted that the group margin was down around 0.6pc in the first three months of the year due to "challenging economic and trading conditions in Continental Europe" and other factors such as ongoing pricing pressure in the UK.
But, G4S did say that its organic growth was good despite the challenging conditions and flagged up a particularly strong performance from its American division.
07.32 On the markets, Tokyo stocks have soared to their highest level in almost five years , with the market driven higher by a weakening yen.
The Nikkei closed up 3.55pc at 14,180.24 - its best finish since June 2008.
Japan's bourse has accelerated since late last year as Tokyo pledged to boost the country's economy with a policy of large-scale spending and aggressive central bank easing, which has helped push down the value of the yen. That, in turn, tends to lift the local stock market as it makes exporters more competitive overseas.
07.22 In other corporate news, supermarket giant Sainsbury (LSE: SBRY.L - news) 's has confirmed that it is in advanced negotiations with Lloyds Banking Group (LSE: LLOY.L - news) to take full ownership of Sainsbury's Bank.
Graham Ruddick reported over the weekend that the retailer was in talks with Lloyds to take full control of its banking joint venture. Sainsbury's Bank was created in 1997 by the supermarket group and Bank of Scotland but Sainsbury's now wants to acquire full ownership of the business.
A deal to buy out Lloyds which took control of Bank of Scotland in 2009 from the 50-50 venture is likely to cost Sainsbury's hundreds of millions of pounds, but it will allow the retailer to ramp up its banking services and take advantage of the brand.
07.15 As Robert Peston of the BBC points out, Paul Walsh has had a particularly long run at the helm of Diageo:
07.11 Now (Other OTC: NWPN - news) for a look at this morning's corporate news. Top of the agenda is that Paul Walsh is stepping down as chief executive of drinks giant, Diageo . Mr Walsh is to retire from the company on 30 June 2014 and over the next year, he will focus on handing over critical relationships to his successor, Ivan Menezes. Mr Menezes is currently chief operating officer at Diageo.
Franz Humer, chairman of Diageo - whose brands include Johnnie Walker whisky, said:
Paul is an outstanding Chief Executive. He has served our business, its shareholders, employees and partners with enormous imagination and dedication over the past 13 years. I know he is justly proud of Diageo and its people and he leaves a great legacy for his successor. The Board is immensely grateful for his ambitious and thoughtful stewardship of the business and its people. The transition process which has been put in place enables Paul to contribute his knowledge and experience during Ivan's first year as Chief Executive Officer.
We are delighted to have a leader of Ivan's talents and global experience to succeed Paul. The handover is being made at a time when the business is strong and Ivan takes on the role of CEO at an exciting stage of the company's global development. The Board is confident that Ivan will inspire our organisation and Diageo will continue to achieve our medium-term performance objectives.
07.07 Also in the Telegraph today, Christopher Hope reports that Lord Lawson of Blaby, the former Tory Chancellor, has said that David Cameron must lead Britain out of the European Union . He writes:
The peer, who was Margaret Thatcher’s most successful chancellor, said the EU has become a "bureaucratic monstrosity" and that the benefits of leaving "would substantially outweigh the costs".
Lord Lawson said it was pointless to try to improve terms on Britain’s EU membership ahead of a an in/out referendum in 2017 and that Mr Cameron has to resign himself to four years of “inconsequential” negotiation with his EU partners.
Lord Blaby who voted for Britain to join the EU in 1975 said he would be backing Britain’s exit in 2017.
The Daily Telegraph understands that China's sovereign wealth fund will not be able to invest in long-term British projects until a solution to the diplomatic stand-off, caused by David Cameron's meeting with the Dalai Lama last year, has been reached.
07.05 And The Telegraph' s business pages lead with news that billions of pounds of investments in major UK infrastructure projects are at risk because of a rift in relations with the Chinese government. James Quinn and Malcolm Moore report:
The Daily Telegraph understands that China's sovereign wealth fund will not be able to invest in long-term British projects until a solution to the diplomatic stand-off, caused by David Cameron's meeting with the Dalai Lama last year, has been reached.
The Beijing government believes Britain needs to make amends before relations can return to normal.
"Any good business relationship relies on a good political relationship for the long-term," sources said. "Favourable political conditions would help with that.
"Generally speaking, China is very willing to participate in infrastructure projects. But to invest, there needs to be a strong relationship."
07.00 Now for a look at this morning's business pages:
The Financial Times (£) leads with Microsoft (NasdaqGS: MSFT - news) preparing to U-turn over key elements of its Windows 8 operating system, which the FT calls one of "the most prominent admissions of failure for a new mass market consumer product since Coca-Cola's New Coke fiasco nearly 30 years ago".
The Guardian leads with news that data for April could show a contraction in Germany's business activity , with prospects for the service sector looking 'increasingly gloomy'.
The Independent 's business front page claims that women are still finding it hard to smash glass ceiling . The average chief executive of a leading British company remains a 53-year-old male with a background in finance, according to the annual Robert Half CEO tracker, says the Indy.
06.55 Good morning and welcome to our new daily business and markets live blog, your one stop shop for all the breaking business stories of the day.