Talks between three parties on forming a new coalition government in Greece are set to resume today, amid intense international pressure. Pasok leader Evangelos Venizelos said a new government could be formed by today. New Democracy leader Antonis Samaras's three-day mandate to form a government expires today. It is unclear whether Pasok, which came third in the vote, will join the government, or merely support it. All eyes will be on Athens today as talks resume at 1 p.m.
European leaders have however indicated that there is limited room for manoeuvre and are expecting details on how the new government intends to make another €11.7 billion (£9.4 billion; $14.8 billion) of cuts by 2014.
UK inflation fell unexpectedly in May to its lowest level in two and a half years due to slower price rises for food and fuel. The Consumer Prices Index (CPI) measure fell to 2.8% in May from 3% in April and Retail Prices Index (RPI) measure fell to 3.1% from 3.5% in April. This is likely to bolster the case for more emergency cash to be pumped into the economy through the Bank of England's quantitative easing programme.
Meanwhile, United States homes declined in May, falling nearly 5 % from the previous month, underlining the slowdown in the new homebuilding and the housing sector. An extension to the fed’s Operation Twist (QE2) may also be on the cards helping the USD to weaken further.
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