Daily Market Report – 27/06/2014

GBP
Yesterday the Bank of England released their financial stability report and
announced tougher new rules on mortgage availability to avoid the housing
market destabilising the UK economy .

The Bank of England announced new affordability test on banks, they must
now calculate the impact on borrower’s ability to repay their mortgages if
interest rates rise by three percentage points.The have also announced a
lending cap of no more than 15% of any lender’s total number of new residential

GBP
Yesterday the Bank of England released their financial stability report and
announced tougher new rules on mortgage availability to avoid the housing
market destabilising the UK economy .

The Bank of England announced new affordability test on banks, they must
now calculate the impact on borrower’s ability to repay their mortgages if
interest rates rise by three percentage points.The have also announced a
lending cap of no more than 15% of any lender’s total number of new residential
mortgages should be at or greater than 4.5 times the borrower’s income.

Mark Carney explained that the Bank of England is acting now, to avoid the
housing market spiralling out of control and threatening financial
stability.The governor says that the UK economy is broadening and
strengthening, but the housing market is the main risk to financial stability.

Carney explained that it is not the Financial Policy Committee’s job to control
house prices but it is worried about the state of household indebtedness
in the UK.Carney explained that household debt isn’t an immediate
threat but it is a worry for the future.

USD
In the US yesterday new applications for unemployment benefits fell slightly
last week, a sign of an improving labour market.Initial claims for unemployment
benefits fell by 2,000 to a 312,000 in the week ended June 21.

However yesterday’s report also showed the number of workers continuing to draw
unemployment benefits rose by 12,000 to a seasonally adjusted 2.57 million in
the week ended June 14. Continuing claims are down by about 400,000 from a year
earlier so this is good sign that conditions are improving in the US 

Today 
09:30 – GBP – UK Gross Domestic Product (YoY) – expected to come in at 3.1%
from 2.7%
09:30 – GBP – UK Gross Domestic Product (QoQ) – expected to come in at 0.8%
from 0.7%
13:00 – EUR – German Consumer price Index – expected to come in a 1% from 0.9%

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