Headlines

The Bank of England signalled on Wednesday that it was close to releasing a wave of new money into the shrinking British economy because of the worsening euro zone debt crisis. Such a move would effectively involve printing money to buy government bonds, in turn lowering British borrowing costs. Coming on the back of last week's announcement of new BoE and government measures to spur lending to businesses, it underlines the depth of concern that exists about the state of Britain's economy as its main trading partners weaken.

A High Court judge has continued orders restraining the children of bankrupt businessman Seán Quinn, a nephew, two sons- in-law and a number of international companies, from dealing with assets owned or controlled by them worldwide below €50 million each, the Irish Times reported. The Quinn defendants will be allowed €2,000 living expenses each until the injunction orders return to court next Wednesday, plus legal and perhaps some domestic expenses subject to formal approval by the court.

After sputtering through four years of recession, most commercial activity has all but ceased over the past six weeks as the country endured two nail-biting elections with its future in the eurozone hanging in the balance, the Financial Times reported. The political paralysis has both quickened the outflow of deposits from Greece’s teetering banks and put on hold an EU-funded effort to recapitalise them. Business leaders say they can no longer obtain the most basic credit – even when they boast solid order books.

Angela Merkel is poised to allow the eurozone's €750bn (£605bn) bailout fund to buy up the bonds of crisis-hit governments in a desperate effort to drive down borrowing costs for Spain and Italy and prevent the single currency from imploding, The Guardian reported. Germany has long opposed allowing the eurozone's rescue fund, the European Financial Stability Facility, to lend directly to troubled eurozone countries, fearing that Berlin would end up paying the bill, and the beneficiaries would escape the strict conditions imposed on Greece, Portugal and Ireland.

The dismal market reaction to the euro zone's promise to pump as much as €100 billion ($125.75 billion) into shaky Spanish banks—underlined by the high yield the government paid on Tuesday to raise short-term funds—is prompting a rethinking of the rescue's mechanics, which have heightened worries over Madrid's ability to repay its debts, The Wall Street Journal reported.

Britain's beleaguered homeowners will have to wait until 2014 at least before they see a rise in the value of their properties, as weak demand and tight lending conditions keep the market in check, a Reuters poll found on Tuesday. Home prices, which have dropped about a fifth since their peak five years ago, will fall another 1.6 percent this year and only hold steady in 2013, according to the poll of more than 20 market watchers taken in the past few days. Housing has long been a bedrock of consumer wealth in Britain and average prices tripled during a property boom in the 10 years to 2007.

Indebted Russian coking coal and steel producer Mechel faces the risk of a further increase in already-stretched borrowings due to the financial struggles of subsidiary Estar, which owes it nearly $1 billion, Reuters reported. If Estar defaults on the loan - which falls due at the end of September - some analysts believe it could lead to renewed pressure on Mechel's debt covenants, less than six months after they were renegotiated for the second time in as many years. "If the loan is not repaid we will enforce the security, which is the pledge of shares of essentially all Estar assets ...

Several emerging-market countries Monday detailed their plans to boost the International Monetary Fund's coffers by more than $90 billion, to push the total new commitments to about $456 billion, The Wall Street Journal reported. China is pledging $43 billion, while India, Russia, Brazil and Mexico told Group of 20 officials they would commit around $10 billion each. Turkey committed $5 billion, and a handful of others offered about $1 billion.

Greece appears headed for a new clash with Germany over its rigid bailout program as the winners of Sunday's Greek election prepare to ask Europe for more time to cut public spending, The Wall Street Journal reported. Greece's conservative New Democracy party and its likely Socialist coalition partner, known as Pasok, are working on a proposal to ask other euro-zone countries for an extra two years to meet Greece's fiscal targets, officials involved in the preparations said.

A push by EU leaders to create a single supervisor for Europe’s largest banks is gaining momentum as support builds for giving the European Central Bank oversight powers in a big step toward “banking union”, the Financial Times reported. The leaders of France, Germany, Italy, Spain and Austria are willing to back a powerful supranational supervisor, and a decision to relinquish national control over cross-border banks is being prepared for next week’s EU summit, according to senior officials. One said the new-found political impetus was “astonishing”.