Yesterday we had Mark Carney speak about the matter of Scottish independence and he indicated that the Bank of England had drawn up contingency plans if there is a vote to break away on September 18.
Mark Carney was also questioned about the currency implications for an independent Scotland, and he reiterated to the MPs that in the event of a yes vote Scotland would need to accumulate billions of pounds of currency in reserves if it uses sterling without a formal agreement with Westminster.
Mark Carney also stated he would not provide new information to the Treasury select committee on such a politically sensitive topic, but indicated that a Scottish central bank could need at least 25% and possibly more than 100% of GDP in reserves if sterling was used after independence.
Although he managed to keep avoiding saying an exact figure throughout the conference, Carney did state that Scotland's banks had assets around 10 times the country's GDP and the size of the banking sector would ultimately determine the scale of their currency reserves.
Greece is still in deflation, although the pace of decline slowed last month, according to the latest consumer prices figures.Prices fell by 0.3% in August, compared to a year earlier, following a 0.7% drop in July. That’s a smaller decline than expected, but means prices have fallen for the last 18 months running as the country’s austerity programmes hit demand and dragged down wages.
French Finance Minister Michel Sapin announced yesterday that France will not hit its deficit goals. It now expects to run a deficit 4.4% of GDP up from a previous pledge to borrow 3.8% of GDP. All European nations are expected to run deficits below 3% of GDP. This figure is a further sign that the the French economy, Europes second largest, is continuing to struggle.
13:30 USD: Initial Jobless Claims expected to be higher at 306K
20:00 EUR: ECB President Draghi's making a speech
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Daily Market Report - 11/09/2014