It appears UK borrowers are more vulnerable to an interest rate rise than ever before after new figures showed unsecured household borrowing hit an all-time high last year. Unsecured debt rose nine per cent in 2014 to a record £239bn, or £9,000 per household, driven by an increase in student loans and credit card borrowing.
The rate of growth is the fastest in a decade, and represents an additional £19.6bn borrowed last year. With borrowing set to reach £10,000 per household by 2016, Brits are even more exposed to a hike in the Bank of England’s base rate, currently at a record 0.5 per cent low.
Also a new report from think tank "Open Europe" looked at the potential for the UK to leave the European Union indicating Britain's economy could take a hit of up to 2.2 per cent of GDP or £56bn by 2030. The report argues that in the worst case scenario, the negative effects of a British exit would not wholly be offset by a new free trade agreement with the EU.
The Dollar weakened on Friday after the US interest hike again dominated the headlines, this time Atlanta Federal Reserve President Dennis Lockhart played down the certainty of a June rate hike. Lockhart indicated it could be during June, July or September policy meetings, barring a significant downturn in the economy. The lower economic forecasts issued by the Fed earlier this week reflect mostly "transient" changes that do not fundamentally change its outlook for continued U.S. growth Lockhart told reporters.
EUR - 15:00: ECB President Mario Draghi makes a speech
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