GBP:
Britain’s public finances deteriorated again in August after a weak start to
the financial year, posing a challenge for Chancellor George Osborne as next
year’s national election approaches. Public sector net borrowing, totalled 11.6
billion pounds in August, up 6.1 percent from a year earlier. A deficit
reduction has been the focus of the Conservative-led coalition since it came to
power in May 2010 when the shortfall was 11 percent of GDP, one of the highest
for a major all the world economies. 

GBP:
Britain’s public finances deteriorated again in August after a weak start to
the financial year, posing a challenge for Chancellor George Osborne as next
year’s national election approaches. Public sector net borrowing, totalled 11.6
billion pounds in August, up 6.1 percent from a year earlier. A deficit
reduction has been the focus of the Conservative-led coalition since it came to
power in May 2010 when the shortfall was 11 percent of GDP, one of the highest
for a major all the world economies. 

UK Mortgage lending ground to a halt in August as lending volumes ground to a
12 month low. A total of 41600 new loans were issued compared to 42,900 in
July. Higher house prices to earnings ratios, tighter lending conditions and
the prospect of rising interest rates have caused the figure to fall. Business
lending did move slightly higher to 1.5B this month, the first increase since
September last year.

USD:
The US manufacturing sector expanded again in September, matching the previous
month’s growth rate. The purchasing manager’s index for manufacturing was
unchanged from August’s figure of 57.9, the highest since April 2010. Continued
strong improvement in overall business conditions in September reflected
further marked rises in output and new business volumes.

The Federal Reserve Bank of Richmond’s monthly manufacturing index for
September also rose from 12 in August to 14, another sign that the US economy
is doing well. Producers remain positive about business conditions for the six
months ahead and expected solid growth in shipments and new orders.

St Louis Federal Reserve president James Bullard suggested a rise in US
interest rates could come in the first quarter of 2015. Bullard who is a
non-voting member of the Fed made the remarks at a banking conference in light
of a strengthening US economy.

EUR:
Growth across the Eurozone’s private sector slumped to its lowest rate in nine
months, fuelling fears over the strength of the Eurozone recovery. Markit’s
measure of output across the euro area has fallen back to 52.3, from 52.5,
showing a slower pace of expansion. Euro area business activity grew in
September at the lowest rate seen so far this year.

Concerns over the Ukraine Crisis and Russian sanctions are out weighing the
moves by the ECB to stimulate the Eurozone with record low interest rates and
cheap credit.

Key Announcements:

12:00 BST – USD – MBA Mortgage applications ( Sept 19)

15:00 BST – USD – New Home sales (Aug) expected to rise from 412K to 430K

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