Morning papers: ECB ‘may cap Spanish and Italian yields’

The European Central Bank is considering buying the bonds of crisis-wracked eurozone countries to ensure borrowing costs do not rise beyond a pre-determined level, according to reports from German newsweekly Der Spiegel, says The Telegraph.

The bank will define an upper limit for borrowing costs in countries such as Spain and Italy and intervene in the markets to ensure it is not breached, Spiegel said, without citing its sources.

Earnings prospects in Europe scaled back

A disappointing second-quarter earnings season in Europe has prompted analysts to scale back markedly their expectations for earnings growth for the rest of the year, reports the Financial Times.

More companies missed than beat expectations in the second quarter of this year, with 48 per cent of those listed on the Stoxx 600 reporting lower than expected consensus quarterly earnings, according to data from Thomson Reuters.

Merkel ally says ‘no room for Greece concessions’

Conditions of Greek aid programme must be adhered to, insists Germany’s Volker Kauder ahead of eurozone talks, reports The Guardian.

As Greece’s leftwing prime minister, Antonis Samaras, prepared to meet eurozone leaders this week for the first time since taking office, a senior ally of German chancellor Angela Merkel has insisted there is no room for concessions to Greece on the conditions of its aid programme and no appetite for a third rescue package.

UK GDP growth ‘will be revised higher’

Many economists expect second-quarter gross domestic product in the UK to be revised higher this week as the second assessment of the country’s economic performance is delivered, reports the Financial Times.

The flash estimate of the April-June period, published last month, came in much weaker than expected, showing that the UK economy shrank by 0.7 per cent over the quarter to give an annual GDP growth reading of minus 0.6 per cent. Persistently weak output in the industrial and construction sectors was exacerbated by the extra public holiday, the initial figures indicated.

Chancellor needs radical rethink on policy, top economists say

The chancellor must consider radical action including spending on infrastructure and abolishing stamp duty to put the UK back on the path to growth, according to some of the country’s leading economists, reports The Telegraph.

A series of opinion pieces to feature in The Daily Telegraph this week from economists including Paul Johnson, director of the Institute for Fiscal Studies, and Andrew Sentance, former member of the Bank of England’s Monetary Policy Committee, add to the growing swell of opinion formers arguing for a policy rethink.

Treasury weighs German ‘mini jobs’ scheme

Treasury ministers are considering the introduction of German-style “mini jobs”, which exempt workers from tax and national insurance, as part of a swathe of labour reforms to reboot the economy, reports the Financial Times.