The FTSE 100 slipped 0.07pc to 5,662.43, the DAX gained 0.13pc to 6,565.72 and the CAC was flat at 3,179.9. 16.33 The IMF says: "Market conditions worsened significantly in May and June, with measures of financial market stress reverting to, and in some cases surpassing, the levels seen during the worst period in November last year. Here's how the Fund illustrates the turmoil: 16.21 IMF believes Spanish debt ratio will not stabilise even by 2016: Meanwhile, ecnomist Nouriel Roubini believes the US is in trouble: 16.08 We have another live blog running today. We'll be covering former Barclays COO Jerry del Missier's evidence to MPs live. It's due to get under way shortly. 15.40 Peter Garnry, an equity strategist at Saxo Bank, believes Italy is wrongly being portrayed as a country in crisis: Without hesitation most investors claim that Italy is a 'problem country', much like Spain, Ireland, Portugal and Greece. But, if you look at the forecast for budget balance as a percentage of GDP in 2012 and 2013 then Italy ranks second, only surpassed by Germany. Who would have thought that? The next interesting observation is that both Italy and Portugal seem to be paying a relatively higher interest rate on 10-year government bonds than other countries with projected budget deficits. I believe most would be surprised to see this large divergence. Italy's technocratic government has actually implemented reforms with broad support secured from political opposition parties and the population in general. The string of reforms in Italy is paying off. It seems to me that Italy is on the right track compared with, say, Spain. 15.33 Spain hopes to formally sign an accord with eurozone leaders on providing up to €100bn for its stricken banking system on Friday, Economy Minister Luis de Guindos has said. 15.30 IMF: "ECB should avoid any tightening of capital rules and consider the introduction of some form of QE." 15.28 IMF says cut in Chinese growth forecast - by 0.2 percentage points to 8pc for 2012 and by 0.3 percentage points to 8.5pc for 2013 - is due to weaker external demand from advanced economies, but slowdown in investment has bottomed out. Offical says fund expects economic drag on emerging economies from advanced economies will stabilize, not worsen. 15.22 Quick update on the markets: Dow -0.6pc 15.18 Economist Duncan Weldon: 15.07 More bad news. Americans cut their spending at retail businesses for a third straight month, as a weak job market has made consumers more cautious. Retail sales fell 0.5pc in June from May, the Commerce Department said. The IMF says a fiscal adjustment of one percentage point in the US would send a strong signal of fiscal responsibility adn would not be overly damaging to economy. IMF chief economist Olivier Blanchard says if the US fails to deal with "fiscal cliff" it could potentially be an "enormous shock" to other economies. 15.00 Louise Cooper at BGC Partners believes the future looks bad for Spain: As Spain implements austerity, the economy may begin contracting rapidly. As this occurs, the country's debt position will not improve as hoped, but is likely to get significantly worse as taxation revenue falls and spending increases (25pc plus unemployment is costly). This is exactly the path that Greece has trod. As GDP forecasts are slashed, economists will also take a red pen to Spanish debt forecasts, and then before long, Spain will be needing a bailout, too. Watch Spain's GDP releases closely to see when this downwards spiral of austerity, recession and debt will begin. 14.47 On the UK, the IMF cut its growth forecasts for 2012 and 2013 by 0.6 percentage points each, to just 0.2pc and 1.4pc respectively - well below what Britain's official forecaster, the Office for Budget Responsibility, predicted in March. Downside risks to this weaker global outlook continue to loom large. The most immediate risk is still that delayed or insufficient policy action will further escalate the euro area crisis. In case of a major shock to the recovery, fiscal policies may need to be recalibrated in countries with fiscal space, in the context of a reassessment of the overall macroeconomic policy mix... 14.45 The IMF says Spain will miss its deficit and debt targets this year and next, though noted the forecasts do not take in to account the €65bn austerity package announced last week. The IMF Fiscal monitor report said Spain's deficit will reach 7pc of gross domestic product in 2012 and 5.9pc in 2013. The country's debt would reach 90.3pc of economic output in 2012 and 96.5pc in 2013, the IMF said, although this figure could come down sharply if and once the direct recapitalisation of Spanish banks came into force. The International Monetary Fund has cut its global growth forecast and warned that the outlook could dim further if policymakers in Europe do not act with enough force and speed to quell their region's debt crisis. In a mid-year health check of the work economy, the IMF also cautioned the productive capacity in a number of emerging market economies, such as China, India and Brazil, may be lower than previously believed and future growth could disappoint. In the past three months, the global recovery, which was not strong to start with, has shown signs of further weakness. The IMF shaved its 2013 forecast for global economic growth to 3.9pc from the 4.1pc it projected in April, trimming projections for most advanced and emerging economies. It left its 2012 forecast unchanged at 3.5pc. 14.14 Just as we think the euro sliding back, it bounces.Forex Live tweets: Euro bounces agianst the dollar after hitting a two-and-a-half year low. Chart: Bloomberg 14.04 The European Central Bank would no longer oppose the forcing of losses on senior bondholders of eurozone banks, Bloomberg reports, citing two officials with knowledge of the central bank's thinking. This echoes what the Spanish Finance Minister said earlier (see entry at 13.22). Citigroup shares are up 3pc in premarket trading after the bank reported better-that-expected second-quarter profits. Net profits fell 12pc to $2.95bn as the group lost money on the sale of a stake in a Turkish bank and suffered from the drag of its troubled assets left over from the 2008 credit crisis. Euro slides against the dollar continues. 13.30 The euro has fallen against the dollar to $1.2185 - the lowest since the height of Greek debt crisis in April 2010. Markts are worried about growth and continued uncertainty over Europe's bailout plans. Sarah Hewin, senior economist at Standard Chartered in London, said: 2012 is turning out to be a slightly worse year for the U.S., for China and for Europe. We're seeing the three large regions of the (global) economy all experiencing below potential growth and, in the case of Europe, we think we'll see a recession for the year as a whole. 13.22 Luis de Guindos, Spain's economy minister, is talking in Barcelona today. He has said that companies should share the effort of Spain's austerity drive and that he will ask IBEX 35 companies to be "conscious of situation" and "conscious of efforts being asked of people." He expect the memorandum of undestanding (MOU) on the EU bank bailout to ease pressure on markets which he said was "unsustainable" - yields on Spanish 10-year bonds widened to 6.6pc today. In an attempt to calm fears of debt investors, the minister stressed there was no mention of senior bondholders in the MOU. 13.12 DJ FX Trader tweets details of a Spanish sale this week: Jamie McGeever of Reuters also tweets: 13.04 Here's a snap from Reuters of anti-austerity demonstrators in Madrid during the early hours of this morning. The banner reads: "Together we can." 12.50 Yet more protests in Spain. After civil servants took to the streets on Friday to protest against sweeping cuts, AFP reports that hundreds of firemen, police officers and nurses demonstrated today against Spain's latest austerity plan. "Hands up, it's a hold-up," the protestors cried, repeating a slogan echoed across the country in the ever-frequent protests. The Madrid demonstration was in response to calls to protest on social networking sites, including under the hashtag £graciasfuncionarios on micro-blogging site Twitter. Mass discontent has grown following a new €65bn austerity package announced by Prime Minister Mariano Rajoy last week, after the European Union ordered new cuts and tax increases to meet deficit-cutting commitments. Spanish civil servants protested against austerity on Friday 12.29 Madrid's regional government is to sell 100 office buildings in the centre of the city over three years, reports Bloomberg, to cut its deficit and pay for services as the country makes its deepest budget cuts on record. Jose Luis Moreno Casas, the government official who is overseeing the sales, said: We're not a real estate company. Our job is to ensure there is adequate health care, education and mobility for our people. The first 15 properties to go on sale have a total value of €62m, according to Tinsa, Spain biggest appraisals company. 11.48 While Italy and Spain's yields continue to tick higher, yields on Dutch two-year securities have dropped to fresh lows as investors head for 'safer' assets. The Dutch two-year rate slipped one basis point to minus 0.005pc, falling to as low as minus 0.010pc. The Netherlands sold €2.38bn out of a maximum €4bn of bills, with the three-and-a-half month security issued at a record low rate of minus 0.041pc. 11.26 One victim of Greece's financial crisis is a reception to mark the fall of the military dictatorship in 1974. Greek president, Carlos Papoulias, has cancelled the lavish event, held annually at his mansion on July 24, due to the economic travails facing the country. 11.10 On the markets this morning, equities are a little under the weather as investors await speeches later this week from Federal Reserve chairman, Ben Bernanke. The FTSE 100 is down 0.27pc to 5651, Germany's DAX is off 0.2pc to 6543 and Spain's IBEX is down 0.69pc to 6618. Jim Reid, an analyst at Deutsche Bank, pointed out that Bernanke's double-appearance "could be a key event for markets": He will first testify before the Senate Banking Committee on Tuesday on his economic and monetary policy outlook before a testimony in front of the House Financial Services Committee on Wednesday. Markets will clearly be watching closely for any discussion around policy options and possible hints of further accommodation given recent data disappointments. 11.02 Late last night in the US, The Wall Street Journal reported that the European Central Bank had shifted its view on bond losses. According the newspaper, the ECB advocated imposing losses on holders of senior bonds issued by the most severely damaged Spanish savings banks, although finance ministers have for now rejected the approach. The ECB's new position was made clear by its president, Mario Draghi, at a meeting of euro-zone finance ministers discussing a rescue for Spain's struggling local lenders in Brussels the evening of July 9. It marks a contrast from the position the central bank adopted during the 2010 bailout of Irish banks - which, like Spain's, were victims of a property meltdown - when it prevailed in its insistence that senior bondholders in bailed-out banks shouldn't suffer losses. 10.44 The European Central Bank has said that the number of counterfeit euro notes slipped 15.2pc in the first six months of this year, compared with the same period last year. The most commonly forged notes are €20 and €50. No reason was given for the decline, although one theory goes that counterfeiting fell as people become better acquainted with the decade-old currency. 10.24 A gloomy prognosis is expected from the International Monetary Fund today at 2.30pm, when it issues its outlook. The IMF is expected to cut its forecast for global economic growth in its quarterly assessment. Christine Lagarde, head of the IMF, indicated earier this month that the organisation will lower its forecast. She did not say which nations or regions were contributing to the lowered assessment for 2012, characterising it as "tilted to the downside" compared with the IMF's 3.5pc global growth projection given three months ago. She said in a speech on July 6: