08.01 The FTSE 100 has opened up 27 points - or 0.5pc - at 5324.06. Sage and Intercontinental Hotels are main risers up 2.8pc and 3.2pc respectively. Insurer Admiral Group is the biggest faller - down 1.7pc - after the OFT said it has provisionally decided to refer the motor insurance market to the Competition Commission. The OFT has found evidence that insurers compete in a dysfunctional way that could be pushing up premiums for drivers by £225m a year. A final decision is expected to be reacehd by October 2012. 07.50 Charles Bean, the Bank of England Deputy Governor, says the central bank has scope to do asset purchases if "things take a turn for the worse." He also said in an interview with the Eastern Daily Press that some regional businesses in Britain are unable to pass on higher costs including from higher energy prices. 07.40 FuturesTechs makes this observation about financial markets: 07.35 10-year German Bund yield remained around lows of 1.27pc on Thursday, as rapidly rising Spanish borrowing costs intensified expectations that Madrid may need outside help to save its banks and stave off contagion from the Greek crisis. While the European Commission may be ready to offer Spain an extra year to reduce its budget deficit and direct aid to recapitalise its weak banks from the EU rescue fund, it can do nothing without the agreement of Germany. One trader said: It is going to get a lot worse before it gets better and the market perversely acts as it is not particularly long at these levels. Pedestrians carry shopping bags on the Kurfuerstendamm in Berlin. Photo: Bloomberg 07.28 Retail sales in Germany rose for the second month in a row in April, beating analysts' expectations. Sales were up 0.6pc in April compared with March, according to provisional figures by the federal statistics office Destatis. On a 12-month basis, however, retail sales slumped by 3.8pc in April, the statisticians calculated. Also, Volkswagen, Europe's largest carmaker, said it struck a pay deal with Germany's engineering union IG Metall for the bulk of its German workers, without disclosing the outcome. Nationwide's chief economist Robert Gardner said demand for homes remains subdued, but the lack of homes coming on the market is providing support for prices. 07.22 British house prices rose slightly more than expected this month to leave prices broadly unchanged on a year ago against a backdrop of generally subdued demand, according to mortgage lender Nationwide. However, a new report out by Fathom Consulting warns that London house prices could tumble 50pc if the euro breaks up. The report says foreign money seeking a refuge from the economic turmoil in the eurozone accounted for 60pc of acquisitions of prime central London property between 2007 and 2011. It believes that while a euro collapse would initially boost luxury house prices in the short term, once the break-up had taken place, demand for these assets as an insurance against this event would start to ebb. 07.20 Europe's escalating debt crisis continued to weigh on global stock markets, with pressure growing on Spain and Italy as borrowing costs in the two countries soar. Shares in Asia fell with Japan's Nikkei 225 sliding 1.35pc, Hong Kong's Hang Seng dropping 0.7pc, South Korea's Kospi down 0.7pc and Australia's S&P/ASX 200 shedding 0.6pc. Overnight, the Dow Jones industrial average closed down 1.3pc, and rising demand for safe investments pushed the yield on the benchmark 10-year US Treasury down to 1.61pc - reported to by the lowest in 60 years. In Germany, the yield on two-year bonds fell to zero. Financial bookmakers expect the FTSE 100 to open down around 0.2pc. 07.19 Ireland will be back in focus as it votes on the EU fiskalpakt today. Bruno Waterfield, our Brussels Correspondent who is in the country to cover the referendum, says the government is confident of victory as secret official polling forecasts that over 60pc of Irish voters will tick the Yes box. However, he warns not to expect an early result as polling stations will only close at 10pm today. The Irish referendum is the only popular vote to be held in the 25 European Union countries that have signed up to a treaty that enshrines eurozone austerity rules into national law. 07.12 In Greece, the election result is becoming too close to call. One poll puts anti-bail-out party Syriza in the lead: A Greek flag flies next to a statue of ancient Greek philosopher Socrates in the center of Athens (Photo: AFP) 07.10 Meanwhile, the Brussels machine continues to whirr. Louise Armitstead describes how the European Commission has put itself on a collision course with Berlin by calling for a eurozone "bank union," including collective bail-outs, and a relaxation of the Fiscal Pact rules: Unveiling detailed "report cards" on Europe's crisis-fighting efforts, the Commission also said that the European Stability Mechanism bail-out fund should lend directly to stricken banks. "Direct recapitalisation by the ESM might be envisaged," the report said. The recommendations, which will be discussed by leaders in June, advocate a radical shift in policy to address fears that Spain and other sinner states will be engulfed by their banks' debts. Jose Manuel Barroso, president of the EC, said: "The Commission will advocate an ambitious approach. The building blocks could include a banking union with integrated financial supervision and a single deposit guarantee scheme. And our ideas on euro bonds are already on the table. He added: "We have to establish a road map with a calendar ... early confirmation of steps to be taken will underscore the irreversibility and solidility of Europe." 07.02 Spain's benchmark borrowing costs spiked to 6.7pc yesterday, while the IBEX 35 index fell to a fresh nine-year low. Ambrose Evans-Pritchard reports: Chaos over the €23.5bn rescue of crippled lender Bankia has led to the abrupt resignation of central bank governor Miguel Ángel Fernández Ordóñez, who testified to the senate that he had been muzzled to avoid enflaming events as confidence in the country drains away. Markets are on tenterhooks as Spanish yields test levels that forced the European Central Bank to respond last November with its €1 trillion liquidity blitz. "Nobody is short Spanish debt right now because they are expecting ECB intervention," said Andrew Roberts, credit chief at RBS. "If it doesn't come -- if we take out 6.8pc -- we're going to see a hyberbolic sell-off," he said. 07.00 The red lights are flashing over Spain. Yesterday, Felipe Gonzalez, the country's former premier, said Spain was "in a situation of total emergency, the worst crisis we have ever lived through."