29/12/16 - Brits Hold On To Cash

GBP

According to the British Bankers Association, British people are holding on to their cash as the country faces potential economic uncertainty in the coming months and years. Many economists predict a slowdown in 2017 as businesses look for more clarity on the UK’s future relationship with the EU.

Personal deposits grew by an annualised 4.8 percent in November, increasing by 32.4 billion pounds in the first 11 months of the year, compared to a growth of 19.8 billion in the same period of 2015.  The BBA figures also showed that home loans approvals fell 9 percent in November compared to the previous year. In the first 11 months of the year, approvals had declined by 4 percent.

Dave Penman, head of the senior U.K. civil servants union, has criticized Prime Minister Theresa May for not acknowledging the “complexity” of Brexit.

“The politics around Brexit are the biggest risk to Brexit,” the FDA General Secretary was quoted as saying. “Ministers lack the political courage to admit how complex and time-consuming this will be.”

This most recent criticism of the government’s approach to Brexit  adds to concerns that the U.K. has not put the resources to deal with such a large task in place.

 

USD

Contracts to buy previously owned U.S. homes fell in November to their lowest level in nearly a year, in a sign that rising interest rates could be having an impact on the housing market, according to the National Association of Realtors.

The pending home sales gauge dropped by 2.5 percent (the forecast was for 0.5 percent gain), after rising 0.1 percent the prior month.

The drop in contract signings was the first in three months and shows the impact of an increase in borrowing costs that began after the U.S. presidential election. 

 

Key Announcements

13:30 - USD : Unemployment claims, forecast at 277K against a previous of 275K