Mark Carney hinted whilst being interviewed on Radio Friday that UK interest rates could be around 2.5% in three years’ time, up from the current level of 0.5%.
He also suggested that this wouldn't spark a surge in borrowing costs. Instead, the governor indicated interest rates will reach their "new normal" in the first quarter of 2017, which could be just half the historical average of 5%.
UK GDP figures were also released on Friday showing The UK economy grew at 0.8% in the first three months of 2014 which was on par with estimations. However the annual growth rate has been revised down a little, to 3.0% from 3.1% growth. These GDP figures did little to move the pound after they were released.
The ONS reports that business investment rose by 5.0% in the quarter, up from a previous estimate of 2.7%. That means it was responsible for 0.4% of growth, or half the total expansion.
The French economy failed to grow in the first three months of the year, GDP came in flat with Zero growth.
Growth in the euro zone's second largest economy was weighed down by a fall in consumer spending and investment by non-financial companies. France only avoided an overall economic contraction in the first quarter of the year due to government spending and companies rebuilding their stock
The European Commission's indicator of economic sentiment in the Eurozone fell by 0.6 points to 102.0.Not a huge move, but economists had hoped for a rise. The measure slipped by just 0.1 to 106.4, helped by a jump in confidence in the UK and Poland.
9.30 - GBP -Mortgage approvals for May. Expected to have fallen from 62.918 k to 61.600k
10:00 - EUR- Consumer price index for June expected to rise from 0.5% to 0.6%
15:00 - USD - Pending home sales May, expected to grow from 0.4 to 0.8%
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