The Bank of England kept interest rates at their record low on Thursday giving Britain’s economic recovery more time to build. The BoE's Monetary Policy Committee left Bank Rate at 0.5 percent. This decision was no surprise to economists and did little to move the pound.
The currency movement from this decision will come out if there was any split on the voting in two weeks time when the BoE release the minutes from this meeting.
With Russia placing bans on agricultural imports from the EU there is talk amongst economists that this action could push the Eurozone further into deflation. With food prices having a high weighting on the inflation index and Russia accounting for nearly 10% of all EU agricultural exports. Some economists expect the surplus of food produced for export could push prices lower in the Eurozone.
The European Central Bank kept interest rates unchanged at record lows of 0.15% as the Ukraine crisis strengthened headwinds facing the euro area’s recovery. ECB President Mario Draghi reiterated that interest rates will remain low in Europe for an extended period and confirms that inflation will remain “Anchored” for some time still.
The ECB stated that they are still assessing the possible impact of sanctions with Russia on the euro area economy with one major risk being the price of energy.
Greek unemployment eased slightly in May but it is still shockingly high. The country’s statistics agency said the jobless rate inched down to 27.2% from 27.3% in April. That is more than double the Eurozone average of 11.6% in May.
In the US The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, pointing to a further strengthening of labour market conditions.
Initial claims for state unemployment benefits decreased by 14,000 to a seasonally adjusted 289,000 for the week ended Aug. 2 .The four-week average of claims fell 4,000 to 293,500, the lowest level since February 2006.
09:30 BST- GBP- UK Trade balance (June) expected improvement to -8.8 Billion
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