GBP
Britain had its smallest fiscal deficit for any May month since 2007 as tax
revenue jumped, handing a boost to Chancellor of the Exchequer George Osborne
as he prepares to unveil the first Budget of the new Conservative-only
government. Net borrowing excluding public-sector banks was 10.1 billion pounds
compared with 12.4 billion pounds a year earlier. Government income rose 4.1
percent and spending climbed just 0.6 percent.

GBP
Britain had its smallest fiscal deficit for any May month since 2007 as tax
revenue jumped, handing a boost to Chancellor of the Exchequer George Osborne
as he prepares to unveil the first Budget of the new Conservative-only
government. Net borrowing excluding public-sector banks was 10.1 billion pounds
compared with 12.4 billion pounds a year earlier. Government income rose 4.1
percent and spending climbed just 0.6 percent.

Osborne is due to set out his tax and spending projections on July 8 after the
Tories won a surprise parliamentary majority in May’s election. He’s warned
there will be no let-up in austerity as he seeks to erase a budget deficit of
almost 5 percent of gross domestic product by 2018. Some economists have
questioned whether he can achieve the 30 billion pounds of spending cuts
required.

“There is no shortcut to fixing the public finances,” the Treasury said in a
statement. “That is why we will bring forward a strong new fiscal framework at
the Budget to entrench a permanent commitment to run a budget surplus in normal
times.”

The Bank of England’s Ian McCafferty reportedly said interest rates could rise
before the end of this year, ahead of the market and economists’ expectations,
depending on the strength of future economic data.

The Bank of England has held interest rates at a record low of 0.5 per cent for
over six years now – but recently officials have warned that a hike is getting
closer.

EUR
Stocks in Athens were up as much as two per cent Friday afternoon, after the
European Central Bank (ECB) offered a lifeline to Greece this afternoon,
increasing the amount of emergency liquidity its banks can draw on for the
second time this week. It was reported on Friday that the ECB had extended
emergency liquidity assistance (ELA) for the country by €3.3bn (£2.4bn). That’s
on top of a €1.1bn hike earlier this week. 

The move came after reports suggested savers in Greece may have withdrawn as
much as €3bn from banks in recent days. Greek savers had been slowly
transferring their funds out of the country.

Although it had been feared Greece may be forced to introduce capital controls,
the ECB’s decision suggested this is now unlikely over the next couple of days.
 

Negotiations broke down on Thursday at a meeting of the Eurogroup of finance
ministers, at which there had been slim hopes of an accord. George Osborne
said Friday that the UK must “be prepared for the worst” on Greece.
In a tweet on Friday, the chancellor said that “while we hope for the
best, we now need to be prepared for the worst”.

Meanwhile, reports suggested Russia was planning to finance a gas pipeline
sending Russian gas to Greece. Alexis Tsipras, Greece’s prime minister, has met
with Russian President Vladimir Putin in recent days to thrash out a deal. The
meetings had been seen as provocative to the European leaders Tsipras is
attempting to thrash out a deal with.

After Fridays talks broke down an emergency summit has been agreed between
Greek Prime Minister Alexis Tsipras, German Chancellor Angela Merkel, and
French President François Hollande in a last-ditch attempt to come to an
agreement.

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