Morning papers: King gives Osborne green light to break rule
Sir Mervyn King has given the coalition government a green light to break its self-imposed deadline to start lowering the nation’s debt within three years, reports the Financial Times.
In an interview with Channel 4 news on Thursday evening, the BoE governor said if there was a genuine excuse, the government could afford to allow the burden of public debt to continue to rise after 2014-15.
EU in talks over Spanish rescue plan
EU authorities are working behind the scenes to pave the way for a new Spanish rescue programme and unlimited bond buying by the European Central Bank, by helping Madrid craft an economic reform programme that will be unveiled next week, reports the Financial Times.
According to officials involved in the discussions, talks between the Spanish government and the European Commission are focusing on measures that would be demanded by international lenders as part of a new rescue programme, ensuring they are in place before a bailout is formally requested.
Italy, Spain won’t seek aid unless yields surge, official says
Italy and Spain won’t request bailouts unless a new surge in bond yields leaves them shut out of markets as no government will voluntarily accept conditions imposed for the aid, a senior Italian government official told Bloomberg.
“There won’t be any nation that voluntarily, with a preemptive move, even if rationally justified, would go to an international body and say -- ‘I give up my national sovereignty,’ ” Gianfranco Polillo, undersecretary of finance, said in an interview in Rome late on Thursday. “I rule it out for Italy and for any other country.”
Russia eyes UK funding for $1trn energy push
Russia is to step up its push for UK investment in its energy sector with meetings in London next month to showcase opportunities in the country.
Russia is to step up its push for UK investment in its energy sector with meetings in London next month to showcase opportunities in the country, reports The Telegraph.
Russian energy minister Alexander Novak said the meetings would form part of Russia’s plan to attract $1trn (£617bn) investment in oil, gas and power by 2020. He did not specify the potential investors but told Bloomberg the meetings would showcase investment opportunities as well as Russia’s energy companies.
IMF cuts South Korea’s growth forecast as Europe caps exports
South Korea should continue to support the economy with government spending and low interest rates as growth is set to trail earlier forecasts, the International Monetary Fund said, reports Bloomberg.
Korean growth will be 3 per cent this year, down from a June forecast of 3.3 per cent, the IMF said in a report on Thursday. The Fund projects around 4 per cent growth next year. The Bank of Korea on July 13 forecast 3 per cent growth for 2012 and 3.8 per cent for 2013.