The government's draft energy bill is predicted to lead to a 'dash for gas' and fresh boost for nuclear. But will this knock the UK's carbon targets off course? Leo Hickman, with your help, investigates. Post your views below, email leo.hickman@guardian.co.uk or tweet @LeoHickman

10.40am: The government publishes its long-awaited draft energy bill today. Much of the advanced publicity seems to be centred on how the nuclear, renewables and gas sectors will each fare.

There seems to be a consensus, particularly among environmental groups, that the bill will largely favour the nuclear and gas industries, with the new long-term contracts known as "contracts for difference" disadvantaging the smaller renewables companies.

But if the bill does lead to, say, a "dash for gas", or an extension in the working life of our existing nuclear power stations, what will this all mean for the UK's carbon reductions targets? The government is committed to decarbonising electricity generation by 2030, as well as slashing overall carbon dioxide emissions by 80% by 2050. Will it likely blow such ambitions off-target, or can they still be achieved?

What are your views? If quoting figures to support your points, please provide a link to the source. I will also be inviting various interested parties to join the debate, too. And later on today, I will return with my own verdict.

10.57am: John Sauven, executive director of Greenpeace UK, has already issued this statement ahead of the draft bill being set out in the Commons later today:

This is a looming energy omnishambles. The energy bill could be a huge opportunity to get energy bills and carbon emissions under control, and to bring security to our power supplies. But ministers seem hell-bent on scuppering all of these aims by encouraging a big increase in our dependence on burning expensive gas to generate electricity. This would increase the burden on families and businesses, and see money from bills going to countries like Qatar and Norway instead of back into the British economy.
It's obvious that plans for new nuclear power stations have crumbled. The government now has to drop its misguided affair with this hugely expensive pipe dream. Energy secretary Ed Davey should ramp up the efficiency of our energy system and invest in home-grown renewable energy to boost the economy and reduce consumers' exposure to rocketing gas prices.

11.14am: Ed Davey, the climate and energy secretary, was quizzed on BBC Radio 4's Today programme this morning. You can listen to the interview here. It largely focuses on whether the nuclear industry will receive public subsidies - Davey tries to argue not - but he also insists the energy bill will focus on carbon targets, as well as "keeping the lights on":

What our reforms today do is they try to keep the lights on through energy security and getting investment in infrastructure and they get the low carbon transition we need to hit our climate change targets and get to clean energy, and we need to do that at the most affordable way for the consumer.

• Christine Lagarde: Bank of England should ease policy now
• Austria blasts François Hollande's proposals as 'nonsense'
• Financial markets rally early
• Today's agenda

10.58am: The IMF's call for the Bank of England to launch more monetary policy easing (see 10.35am) comes at a very interesting time. Tomorrow, the minutes of the last meeting of the Bank's monetary policy committee will be released, showing whether any members of the MPC voted for more quantitative easing (last month one member did, and eight did not).

In the longer term, it comes amid speculation over Sir Mervyn King's successor. The message from Christine Lagarde is that the IMF wants to see a governor prepared to ease monetary policy when needed.

An ambush on Threadneedle Street, by the IMF and the Treasury? The Wall Street Journal's Simon Nixon suspects as much:

I suspect Lagarde comments on BOE bank funding coordinated with her friend George. HMT exerting max pressure BOE ahead of new Guvnor appt.

— Simon Nixon (@Simon_Nixon) May 22, 2012

10.39am: These are the key quotes from Christine Lagarde on the UK economy:

The quality of fiscal adjustment can be improved to provide support for growth, and this includes budget neutral shifts towards more infrastructure spendings and measures to shield the poor.

In other words, the UK government could adjust its current economic programme today, without altering the pace at which it is lowering the deficit.

If the economy turns out to be significantly weaker than forecast, fiscal easing should be considered.

Ie, Osborne's Plan A may have to be torn up if the UK economy does not recovery strongly enough from its double-dip recession.

10.35am: On monetary policy, Christine Lagarde reiterated that the Bank of England should do more now to protect and stimulate the UK economy.

What we are saying now is that more tools can be used.... in terms of quantitative easing.

We also believe there is room in interest rates that could be used as well.

That is a clear shot at Sir Mervyn King and the rest of the Bank of England's monetary policy committee, which has left UK interest rates at their record low of 0.5% for more than three years, and recently stopped its quantitative easing programme at £325bn.

10.26am: The UK government should take advantage of its record low borrowing costs to stimulate the British economy, if growth continues to disappoint, says IMF chief Christine Lagarde.

As her press conference in London continues (see 10.02am onwards), Lagarde argued that extra borrowing could needed to avoid a recessionary spiral.

She argued that the UK government should use its current "extremely favourable financing costs" to provide new financing for small businesses and households.

Important to note that Lagarde is not criticising George Osborne's performance to date. Indeed, she reiterated that the UK would not be in a position today to consider such as fiscal stimulus, if the UK deficit was higher.

Lagarde said:

The UK authorities' policy approach has reinforced credibility at a time of intensified global uncertainty.

Lagarde added that she "shivers" when she considers what would happen if the UK's record deficits of a couple of years ago were in place today.

10.11am: Christine Lagarde, managing director of the IMF, has stated that the British government should ease the pace of its austerity progaramme if the UK economic recovery fails to take off.

Announcing the conclusions of the IMF's review of the UK economy, Lagarde
said that the need for fiscal consolidation needs to be balanced against the danger of several years of lost growth.

In a frank assessment of the UK, Lagarde said:

Growth is too slow and unemployment, including youth unemployment, is too high. Policies to bolster to demand before low growth becomes entrenched are needed.

Should things deteriorate, the government's current plan (George Osborne's Plan A) may need to be revised, Lagarde said, stating:

If the economy turns out to be signifciantly weaker than forecast, the pace fiscal consolidation should be eased...and fiscal stimulus should be considered.

Lagarde did also give the UK government credit for its approach to Britain's budget deficit, saying its policy approach had "reinforced credibility at a time of global uncertainty."

But she was clear that action should be taken to avoid low growth becoming entrenched in the UK.

10.08am: Chancellor George Osborne and Christine Lagarde are holding a press conference in London now, to discuss the final stage of the IMF's review of the UK economy.

Osborne speaks first, saying he welcomes the fall in UK inflation this morning. He went on to warn that the eurozone crisis has now reached a "critical point", telling a press conference that:

The eurozone needs to stand behind their currency or risk Greece exit, with all the dangers that holds.

Osborne added that while Britain hopes for the best, we prepare for something worse...

10.02am: Breaking news -- the International Monetary Fund has called on the Bank of England to launch more quantitative easing or cut interest rates to stimulate economic growth.

In its latest assessment of Britain, the IMF also warned that there are large dangers to the UK economy, mainly from the escalation of the euro crisis.

More to follow!

9.52am: Spain has seen its borrowing costs rise again, an auction of €2.5bn of short-term debt this morning.

The Spanish Treasury sold €1.5bn of three-month bills, at an average yield* of 0.846% – up from 0.63% at an auction last month. The yield on €1bn of six-month bills also rose to 1.737%, from 1.58% last month.

Rising yields is a sign that investors are pricing Spanish debt as more risky. More reassuringly, though, Spain received bids for over €10bn of debt, so was able to sell the full amount on offer.

Reaction to follow...

* - effectively the interest rate that Spain will pay to bond buyers

9.33am: Quick bit of UK economic data -- the Consumer Prices Index came in at 3% for April, lower than expected (and sharply down on March's 3.5%).

That's the lowest CPI since February 2010, which means that Sir Mervyn King will not have to write another letter to the chancellor explaining why the cost of living is racing well ahead of target.

The Retail Price Index, though, only fell back a little, to 3.5% year-on-year.

9.27am: The OECD also slashed its forecast for the eurozone economy in 2012 this morning to a contraction of 0.1%, from growth of 0.2%.

Within that forecast, the OECD expects Europe's two-speed economy to continue, with peripheral countries in the south suffering deep recessions.

OECD chief economist Pier Carlo Padoan told Reuters:

We also see flat growth in the euro area which hides important differences, with northern countries growing and southern countries in recession.

9.19am: The spiraling eurozone crisis - and the region's focus on austerity - risks blowing the world's economic crisis off course, the Organisation for Economic Co-operation and Development has just warned in its latest assessment of the global economy.

In an important intervention, the OECD signal to Germany that it should drop its resistance to new measures to ease the crisis, or risk dragging the global economy back into a repeat of the recent downturn.

Pier Carlo Padoan, the OECD's chief economist, said:

The risk is increasing of a vicious circle, involving high and rising sovereign indebtedness, weak banking systems, excessive fiscal consolidation and lower growth.

It added that further easing was possible in Europe -- pointing out that the euro area could move toward common euro bonds, and that its firewall could be used to directly recapitalise banks.

More to follow...

8.44am: In Greece, the news last night that a small splinter party has teamed up with the mainstream New Democracy party is getting plenty of attention.

As Kathimerini explains, ND's Antonis Samaras and Dora Bakoyannis (head of the liberal Democratic Alliance) plan to create a "a patriotic, pro-European front", that would focus on staying in the eurozone while "resisting and changing the course of things."

It's a clear response to the popularity of Syriza, and their charismatic leader Alexis Tsipras. Today he is heading to Berlin to meet the leaders of Germany's Left Party, Gregor Gysi and Klaus Ernst, after yesterday's meeting in Paris.

We'll have more on Tsipras shortly....

8.32am: Another event this morning - George Osborne and Christine Lagarde are meeting in London. A press conference is scheduled, so we should get an update from the International Monetary Fund chief on the state of the crisis.

Here's the full agenda:

• OECD economic outlook data: 9am BST 10am
• UK inflation data for April: 9.30am BST
• UK public finances for April: 9.30am BST
• Lagarde + Osborne press conference: from 10am BST
• Eurozone consumer confidence for May: 3pm BST / 4pm CEST

Spain, Hungary and the Netherlands are holding bond auctions too – the Spanish sale could be interesting, given the state of the crisis.

8.12am: European markets are rallying in early trading, on hopes of progress in Brussels tomorrow -- and speculation that China will take steps to keep its economy growing briskly.

FTSE 100: up 54 points at 5358, + 1%
German DAX: up 57 points at 6388 + 0.9%
French CAC: up 28 points at 3050, up 0.9%
Spanish IBEX: up 49 points at 6564, + 0.6%
Italian FTSE MIB: up 175 points at 13188, up 1.37%

Andrew Taylor of GFT warned that the merry mood could soon turn sour:

Optimism that the EU summit will produce results (haven't they learnt!) and comments that 'China will make growth a priority' have also added to positive market sentiment.

Traders need to be wary of the uplifting tone that surrounds the Summit and China as it is merely talk at this stage with no real action plan for either.

8.02am: Evidence that the eurozone crisis is casting a shadow the global financial markets: Temasek Holdings, Singapore's sovereign wealth fund, has predicted that "markets may be entering a period of stress in the next 12 to 24 months due to the eurozone crisis". More here.

German finance minister Wolfgang Schäuble made a similar comment last week, saying the crisis will last another two years.

7.59am: Austria's finance minister has launched an outspoken attack on the new president of France ahead of tomorrow's summit.

Maria Fekter claimed that François Hollande's proposals, including the introduction of eurobonds, were "nonsense", and would push Europe deeper into the debt crisis. Fekter told Austrian newspaper Oberoesterreichische Nachrichten that:

Growth financed by debt? Those are the recipes from the day before yesterday.

The arguments that France's new president François Hollande is putting forward again are nonsense and got us into this whole mess in the first place.

Fekter's comments do chime with the concerns of some Germans, who fear that Hollande is planning to make them pay for the French banking sector's heavy exposure to Greece (where SocGen and Credit Agricole both own subsidies).

Fekter does have previous form on speaking out of turn - last week she managed to upset Germany by suggesting that Greece could be thrown out of the European Union.

7.45am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis.

There's just one day to go before European leaders meet in Brussels for an informal summit on growth. It's shaping up to be quite an event – with France pushing for radical new measures, and Germany resisting firmly (as reported last night).

Adding to the drama, Alexis Tsipras of Syriza will be holding talks in Berlin today, following Monday's visit to Paris – where he warned that a "wind of change" was blowing towards Europe, and that Greece's pain would soon be felt by other countries unless leaders change course.

On the economic front, we have UK inflation and public finance data this morning, and eurozone consumer confidence data this afternoon.

Financial markets are expected to open higher, on optimism that progress will be made at tomorrow's summit. So often, hopes have swiftly been dashed. But maybe this time it's different ...

Tesco said Philip Clarke, who took home in the region of £1.7m, had 'decided earlier this year' not to take his 2012 annual bonus

Tesco boss Philip Clarke has turned down his annual bonus worth nearly £400,000 after disappointing sales at the UK chain sparked the supermarket's first profit warning in 20 years.

Its top 5,000 managers received an annual cash bonus worth just 17% the maximum while executive directors got 13.5%, reflecting that "some performance targets in the UK were not met", according to the retailer's annual report. Although the grocer made "record" group profits of £3.8bn in the year to 25 February, the success of its international business masked a 1% fall in UK profits to £2.5bn.

The Tesco board has traditionally been one of the best paid in the FTSE but remuneration committee chairman Stuart Chambers said the profitability threshold for the annual bonus - which accounts for 70% of the possible award - had not been achieved, triggering a substantial reduction in pay for the company's top directors.

This meant that the pay of all bar one of the executive directors - US head and deputy chief executive Tim Mason - fell below £2m. Directors received 46.5% of long term awards tied to earnings and return on capital invested, according to the report.

Tesco said Clarke, who still took home in the region of £1.7m, had "decided earlier this year" not to take his 2012 annual bonus which was worth £372,000 due to the "weaker than expected performance in the UK". In the report Clarke admits it "has been a tough year to be a Tesco shareholder". "Whilst the year gave us many things to be proud of, overall it was not the most pleasing performance," he said, adding. "My team and I are resolved to get Tesco back to winning, particularly at home."

Last year Tesco overhauled its pay policy for top executives after an embarrassing shareholder revolt at its 2010 annual meeting, when almost half its investors failed to back its remuneration report. The new "collegiate" approach saw Tesco's current four long-term incentive plans merged into one single plan. The shakeup also involved scrapping a controversial incentive scheme previously enjoyed by Mason.

Clarke earned less than Mason, who runs loss-making US start-up Fresh & Easy and took home a pay and shares package worth £2.1m, half the previous year's haul. California's based Mason's pay was boosted by a benefits package worth £555,000. The four-year-old US chain made a loss of £153m on sales of £638m.

The annual report shows Richard Brasher, who was ousted as UK head in March, earned roughly £1.6m last year. Brasher, who had worked at Tesco for 25 years, owns shares worth nearly £5m. Details of his pay off will appear in next year's annual report.

Shopfloor staff will share £110m from the all-employee cash bonus scheme which vests in 2015. All staff can participate in the plan but payouts for directors are capped at £3,000.

Conrad Black, having been freed from jail in the United States and deported to Canada, is now fighting to stay in the country of his birth.

He finds himself as the target of several Canadian politicians who would prefer that he was not around.

The pugnacious former Telegraph owner is particularly exercised by claims that he asked for help to obtain his one-year temporary visa from the current government, led by Stephen Harper.

He called the accusation - by Thomas Mulcair, the leader of the main opposition party, New Democratic Party - "demagogic rabble-rousing".

Lord Black, who gave up his Canadian citizenship to obtain a British peerage, entered Canada on 4 May after being released from a Florida prison, where he served a 42-month sentence for fraud and obstruction of justice.

But he is still maintaining his innocence. In a CBC television interview he said he was unjustly convicted. "I was shafted," he said. "Keep in mind, I won 99% of this case."

He said he was worried that Mulcair's attack on his temporary-resident permit might result in the Harper government rescinding it.

"I deliberately had absolutely no contact direct or indirect with anyone," Black said.

Black, renowned for his turns of phrase, also said he would like to move beyond his conviction rather than being "stigmatised for life, like a medieval leper, with bells on my head to warn the unsuspecting of the approach of moral taint and turpitude."

Black was coy about his future interests, beyond writing. "There's some interesting prospects," he said. "But since they're not public companies I don't talk about them."

Source: Globe & Mail

Sir Mervyn King will not have to write letter of explanation as CPI inflation comes within a percentage point of target

A sharper than expected drop in inflation spared Sir Mervyn King the embarrassment of writing a 10th successive quarterly letter to the chancellor about Britain's high cost of living.

Figures from the Office for National Statistics (ONS) showed that tough competition in the high street meant inflation as measured by the Consumer Prices Index fell from 3.5% to 3% last month.

After peaking at 5.2% in September 2011, inflation is now at its lowest level since February and for the first time in the current parliament Sir Mervyn will not have to write a letter of explanation to George Osborne.

The bank's task is to hit the government's 2% inflation target, and the governor has to give a public explanation if it deviates by more than a percentage point from that goal.

With poor spring weather making life tougher for retailers, the ONS reported that clothing and footwear prices rose by 0.2% last month compared with 1.4% in April 2011. Smaller budget increases in excise duties and cheaper air fares due to the timing of Easter also helped keep prices in check.

So-called "core inflation", which strips out energy costs and food, also dropped sharply last month, from 2.5% to 2.1%.

Chloe Smith, the economic secretary to the Treasury, said: "Inflation is down and back within the target range for the first time since 2010, which is good news and will provide some welcome relief for family budgets."

Separate government data saw government borrowing flattered by the transfer of the Royal Mail pension fund to the public sector last month. This swelled receipts by £28bn and resulted in a £16.5bn surplus for the exchequer in April.

Excluding the effects of the pension fund transfer, the deficit in the first month of the 2012-13 financial year was £11.5bn – higher than the City had been expecting. A Treasury spokesman said: "Despite the challenges the recovery is facing from the eurozone and elsewhere, the government is making good progress in dealing with the deficit: today's data shows that in 2011-12 we cut borrowing by almost £12.5bn."