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Business - Need to Know

Afternoon Edition

Well, the growth didn't last long. Greece slipped back into recession in the first quarter of this year, according to official figures from the country's statistics agency.

The economy shrank 0.2 per cent in the first three months of the year, following a 0.4 contraction in the final quarter of 2014. Two consecutive quarters of contraction mean a recession.

Greece only emerged from a six-year recession at the start of 2014 and managed three quarters of growth, before slipping back.

As RBS pointed out this morning, the Greek economy was already doing worse than the US during the great depression. Log on to the Business Now live blog to see the sobering comparison.

There was better news for Italy, with growth of 0.3 per cent in the first quarter, adding to hopes of some recovery after three years of recession.

Separate data from Athens showed that total deposits from households, companies and non-government entities into Greek banks hit a 10-year low, slipping to €139.4 billion in April, a €5.6 billion drop on the previous month.

The news came as finance ministers and central bankers from the G7 wrapped up three days of debate about how to get the global recovery moving faster and no doubt countless discussions about Greece.

Yanis Varoufakis, the Greek finance minister, claimed earlier today that Greece has agreed “most issues” with its creditors on the final day in Dresden.

"There will be one and good agreement ... this negotiation has been dragged enough ... it will include the pension system, labour market and the public debt," he said in a radio interview.

Finally, this week's Business podcast features Andrew Clark, Deputy Business Editor, Patrick Hosking, Financial Editor, and Alistair Osborne, Chief Business Commentator, discussing next week's Bank of England interest rate decision, Greece and a slight tangent about their own shopping habits. Click here to listen or download it from Soundcloud and iTunes.

Don't forget you can also follow me on Twitter for regular updates throughout the day - @becclancy.

Have a great weekend.

Rebecca Clancy
Breaking News Editor, Business
The Times
rebecca.clancy@thetimes.co.uk

London’s leading index has struggled for momentum as investors decipher comments from Christine Lagarde, managing director of the IMF, about the possibility of a Grexit and await first-quarter US GDP figures later today.

The FTSE 100 has its head above water, though, having fallen earlier in the session, gaining 21.18 points to 7,062.10 supported by bullish brokers.

Associated British Foods, the owner of Primark, 71p to £30.21, is among the biggest risers on an upgrade from Goldman Sachs, from "sell" to "buy". Meanwhile, Weir Group, the Scottish engineering group, has risen 58p to £20.34 on Credit Suisse raising its target price.

Weighing on the Footsie are the supermarkets following reports that the Financial Reporting Council, the accountancy watchdog, will make food retailing a priority sector for audit inspections this year in the wake of the Tesco accounting scandal. Wm Morrison is down 2p to 175p and Tesco eased 1¼p to 215¼p.

Alex Ralph
Market Reporter

Retail deposits in Greek banks have reached their lowest level since 2005. They dropped by 3 per cent in April to €115 billion.

The key data coming out of the US today is the second estimate of first quarter GDP, due to be released at 1.30pm BST.

Expectations are for a huge downgrade, from the initial estimate of 0.2 per cent growth to a contraction of as much as 0.8 per cent, according to Thomson Reuters.

"This is a far cry from what markets had been expecting just over a month ago when we were hoping to see growth of 1 per cent, amidst expectations of possible June rate rise," says Michael Hewson, chief market analyst at CMC Markets.

It is also well below the 2.2 per cent growth seen in the final quarter of 2014.

The contraction will no doubt be blamed on an unusually cold winter, a reeling energy sector and an export slump caused by a strong dollar.

Markets: Futures suggest a negative start to the day on Wall Street. The Dow Jones is expected to open down 6 points at 18,128, the S&P to fall 1.5 points to 2,120.25, and the Nasdaq to ease 6.5 points to 4,536.25.

"Strong confidence and activity in the services sector reinforces our view that weaker growth over the first quarter of 2015 will prove temporary."
Rain Newton-Smith, the CBI's director for economics, is upbeat after a quarterly survey by the business group found profits in the professional services sector were growing at their quickest pace since 2007
Today's FTSE 100 risers and fallers
Up (%)
Weir Group 2.93
Associated British Foods 2.40
Shire 1.32
Fresnillo 1.28
Vodafone Group 1.22
* As at noon
Down (%)
Anglo American -1.30
Tui -1.26
Intertek Group -1.18
WM Morrison Supermarkets -1.13
Diageo -0.89
* As at noon
The Markets Today
FTSE 100 7,062.10 0.30%
FTSE 250 18,274.40 0.21%
Cac 5,118.05 -0.38%
Dax 11,638.00 -0.24%
Brent Crude 63.76 0.95%
Gold 1,188.40 0.03%
GBP/US 1.5238 -0.50%
GBP/euro 1.3904 -0.56%
10Y Gilt 128.459 0.11%
* As at noon
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