The pound strengthened against the euro yesterday as investors look for clues from projections due in the central bank’s Inflation Report as to when it will begin raising interest rates.
According to analysts at BNP Paribas, if we continue to get an indication from Carney that rate hikes are on schedule for November, then there’s scope for sterling to rebound this week. The Inflation report and Carneys speech is released on Wednesday.
Mortgage lending rose 6% in June to £17.9bn, according to Bank of England data. This is 20% higher than June last year. Lending is driven by house buyers, rather than people re-mortgaging their houses, says the Council of Mortgage Lenders. Lending to first-time buyers increased 19% on June last year.
Scottish First Minister Alex Salmond commented yesterday on Scotland adopting the UK Pound if there is a vote for independence. He said nothing will stop an independent Scotland from using UK Pound and dismissed UK opposition to a currency union.
Stanley Fisher a member of the Federal Reserve stated yesterday in a speech that the global economic recovery has been disappointing and could signal lower growth in the long run. He states that growth in many advanced economies have underperformed expectations of growth as economies exited from recession. This has led to repeated downgrades of forecasts for short term growth.
10:00 BST- EUR -ZEW Survey Economic
Sentiment (Aug) expected to decrease to 41.3
19:00 BST - USD - Monthly Budget statement (July) expected to show higher deficit of $98 Billion
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