90 seconds at 9am: Greek crisis worsens; BoE holds at 0.5% despite 3% inflation

Bernard Hickey details the key news overnight in 90 seconds at 9am in association with the BNZ, including news that the Greek fiscal and monetary crisis worsened overnight as bond prices plunged and yields rose sharply. The gap between German and Greek bond yields widened out to over 4.4%, a record high. This is a closely watched measure of how confident markets are in Greece's ability to roll over its massive debts. This is despite the ECB saying a Greek default was not an issue and Greece itself saying it doesn't need any help yet. However, markets are very nervous, particularly when they can see inter-bank lending between foreign and Greek banks drying up and deposits leaving the Greek banks for other banks. Markets are worried Greece will not be able to roll over its billions of euros of debt in the next 6 weeks. Meanwhile, the Bank of England held its official rate at a record low of 0.5% despite inflation there running at 3% and the petrol price hitting a record 120p/litre or NZ$2.55/litre overnight. The ECB held its key rate at 1%. The next 6 weeks are shaping up to be crucial in financial systems globally as a Chinese yuan float decision is near and Britain could have a hung parliament after its May 6 election. NZ markets will also be busy. The Reserve Bank makes its next Official Cash Rate decision on April 29 and delivers its Financial Stability Report on May 19. The budget is on May 20.