UK Economics Correspondent, London
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Jun 20, 2014

UK May public finances show little sign of lower borrowing

LONDON (Reuters) – Britain’s public finances showed little or no fall in underlying borrowing two months into the fiscal year, suggesting the government will have to increase the pace of deficit reduction to meet its latest borrowing targets.

Official data on Friday showed headline measures of borrowing were sharply higher than a year ago – largely due to one-off effects – and only weak growth in tax receipts despite a stronger economy.

Jun 19, 2014

Bank of England’s McCafferty says coming months’ data key for rate-hike timing

LONDON (Reuters) – Bank of England policymaker Ian McCafferty said that economic data over the next few months will have a critical influence on when the central bank raises interest rates, adding to signs that a rate rise is possible later this year.

McCafferty’s comments on monetary policy in a speech in London on Thursday largely echo those he gave in a radio interview 10 days ago, and follow BoE Governor Mark Carney’s warning last week that markets had underpriced the risk of an early rate rise.

Jun 19, 2014

UK retail sales fall in May for first time since January

LONDON, June 19 (Reuters) – Strong sales of replica football
shirts last month as the World Cup approached were not enough to
save British retail sales from their first drop since January,
official data showed on Thursday.

The dip in sales was expected and followed a stretch of
robust demand. Sales for the three months to May compared with
the same period a year ago rose by the largest amount in nearly
a decade.

Jun 18, 2014

New BoE policymakers eye case for early action on rates

LONDON (Reuters) – Three Bank of England policymakers set out reasons to favour raising interest rates sooner rather than later on Wednesday, more evidence that opinion at the central bank may be shifting towards a rate rise before the year is out.

New BoE chief economist Andy Haldane and Monetary Policy Committee members Kristin Forbes and Martin Weale all highlighted the costs of keeping rates on hold for too long, though none said rates should increase straight away.

Jun 18, 2014

Premier Li says China’s economy won’t suffer hard landing

LONDON (Reuters) – Chinese Premier Li Keqiang said on Wednesday that China’s economy would not suffer a hard landing and would continue to grow at a medium to high pace in the long term without strong stimulus.

Li made the comments during a speech in London’s financial district on the final day of a visit which has yielded trade and investment deals worth 14 billion pounds ($23.76 billion) and strengthened Britain’s bid to become the dominant centre for the Western trade in offshore yuan CNH=.

Jun 18, 2014

BoE says surprised that markets saw low chance of 2014 rate hike

LONDON (Reuters) – Bank of England policymakers were surprised earlier this month that markets had not priced in a higher chance of an interest rate rise this year, minutes of their June meeting showed on Wednesday.

BoE Governor Mark Carney shocked markets last week when he said a rise in interest rates could come sooner than markets had been expecting, in comments that pushed sterling up toward a five-year high against the dollar.

Jun 17, 2014

UK inflation falls to 4 1/2-year low in May, but house prices soar

LONDON, June 17 (Reuters) – British inflation slumped to a 4
1/2-year low last month but house prices surged in April,
according to data that clouded the view for Bank of England
policymakers gauging Britain’s economic recovery.

Consumer price inflation dropped to 1.5 percent in May from
1.8 percent in April, its lowest since October 2009, after the
first year-on-year fall in food prices since 2006, the Office
for National Statistics said on Tuesday.

Jun 13, 2014

British rate rise in 2014 less certain than market thinks

LONDON (Reuters) – A Bank of England interest rate rise before the end of the year is a distinct possibility after unusually hawkish comments from Governor Mark Carney – but it is perhaps less certain than financial markets now think.

Carney surprised investors late on Thursday by saying that rates could rise sooner than markets had previously expected, causing sterling to soar to near a five-year high against the dollar and interest rate futures to price in a rise this year.

Jun 13, 2014

UK construction data revised higher, policy moves may hold sector back

LONDON, June 13 (Reuters) – British construction output grew
faster than previously thought in the first quarter, new figures
showed on Friday, but could slow in the next three months,
particularly after the government took steps to cool the housing

Finance minister George Osborne said on Thursday that he
would give the Bank of England stronger powers to curb mortgage
lending, while BoE Governor Mark Carney said interest rates
could rise sooner than financial markets expect.

Jun 13, 2014

Carney signals earlier British rate rise, sterling soars

LONDON (Reuters) – Britain could become the first major economy to tighten monetary policy since the 2008 financial crisis, Bank of England Governor Mark Carney signaled, sending sterling shooting to a five-year high against the dollar on Friday.

Government bond yields soared, construction stocks tumbled and interest rate futures priced in a first hike by December after Carney said rates could rise sooner than financial markets had thought – his most hawkish signal to date.

    • About David

      "David keeps a close watch on the UK economy, the Bank of England and the British government debt market. Previously he worked in Frankfurt, covering the European Central Bank and euro zone economy, and in Brussels where he reported on everything from EU summits to Belgian supermarkets."
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