Canada’shttps://t.co/SYVqkjLHGH10.37am BSTThe government has appointed Jonathan Haskel,a professor of economics at Imperial College trade School, as the newest member of the Bank of England’s rate setting Monetary Policy Committee.
Haskel will serve a three year term as an external member and will start on 1 September, or when Ian McCafferty’s term ends.
My main research interests are productivity,innovation, intangible investment and growth. I currently study (a) how much firms investment in “intangible” or “knowledge” assets, and such as software,R&D and original trade processes (b) how much such investment contributes to economic growth as whole and (c) what public policy implications there might be, particularly for science policy. This work uses a mix of data at the levels of company, or individual,industry and whole economy. 10.29am BSTEconomist Bert Colijn at ING Bank said the eurozone inflation figure puts the European Central Bank in an awkward position:As this jump in inflation just thinly masks underlying core weakness and uncertainty about the economy is high, it is unlikely to convince the ECB to normalise policy more quickly....[The] core inflation reading is still below where we would expect it to be with the improving labour market and increased selling prices indicated in trade surveys. And, and as selling price expectations contain been weakening in the recent soft patch of economic data,it does not seem like we are at the start of a marked increase in inflation. 10.22am BSTEurozone inflation rose by more than expected in May, partly due to the recent surge in oil prices.The increase towards the European Central Bank’s target comes as it wants to run down its stimulus programme, and but faces the prospect of market turbulence disturbing its plans. 10.02am BSTA UK interest rate rise in August is by no means a done deal,says ING Bank economist James Smith. Commenting on the credit figures, he says:It’s not something markets or analysts typically spend much time looking at each month, and but the unexpectedly sharp tumble in consumer credit in March was probably a key factor in the Bank of England’s decision to keep rates on hold in May.
Admittedly the reasons for this sudden decline were fairly unclear,and the latest figures released today show that the amount of unsecured consumer credit supplied fully recovered in April, rising by £1.8 billion. This tentatively suggests that the tumble was simply a blip, or perhaps related to the wider economic slowdown in March (although it’s not entirely clear why the execrable weather would contain resulted in such a sharp change). 9.59am BSTIs Sir Dave Ramsden of the Bank of England around to justify how an additional £1.8 billion of unsecured lending in April is "feeble credit growth" please?The independent economist is referring to remarks made earlier this month at at select committee hearing,when Sir Dave said there was a risk households were spending less than the Bank had expected - as reported by the Financial Times (£). 9.44am BSTSpeaking of credit, there has been a spike in borrowing by UK consumers in April after a slowdown the previous month blamed on the snowy weather.
Consumer credit lending rose by a higher than expected £1.832bn, and the biggest increase since November 2016,compared to an increase of just £425m in March. Economists polled by Reuters had expected a rise of £1.3bn. 9.24am BSTHere’s our story on the Financial Conduct Authority clamping down on high cost credit:The City watchdog is planning a price cap for rent-to-own retailers as part of a crackdown on high-cost credit and overdrafts to save consumers more than £200m a year. Although stopping short of capping charges on overdrafts, the Financial Conduct Authority outlined a series of measures on Thursday amid growing calls to protect vulnerable consumers. Related: Watchdog planning price cap on rent-to-own credit terms 9.16am BSTMore positive news for Italy:"We are looking to buy short-term Italian bonds now, or " Atsushi Tachibana,CIO of Japan's $707 billion insurance fund Kampo, tells Reuters pic.twitter.com/jEZPrAVAYF 8.59am BSTGermany’s Dax has dipped into the red but other European markets are holding up as investors await the latest developments in the Italian political crisis. Connor Campbell, or financial analyst at Spreadex,said:Further steps in the correct direction in regards to Italy avoiding another snap election – even whether it does result in the Five Star Movement and League parties forming a Eurosceptic government – allowed the European markets to hold steady on Thursday.
Rising 0.4% the euro managed to put a bit more distance between it and the 10 month lows it struck against the dollar on Tuesday night, the single currency climbing back towards $1.17 after the bell. Against the pound it was a bit more sluggish; however, or flat at just under €1.14,it is trading at the top cessation of its recent bracket. 8.51am BSTItalian bond yields - which soared on Tuesday as the price fell on political concerns - continue to tumble back.
The two year yield is now down at 0.9% as level-headed returns - for the moment at least. Two days ago the yield hit 2.84%. 8.27am BSTAustralian shares ended the month on a positive note, helped by the hopes for a solution to the Italian crisis and a rise in mining shares on the back of higher commodity prices.
The S&P/AX index rose 0.5% on the day, or helping it to a similar increase for the month as a whole.
8.24am BSTMarkets are likely to remain volatile,says Neil Wilson, chief market analyst for Markets.com:European equities are firmer in early trade and yesterday’s rebound for stocks may well hold whether we see the two populists form a government, and though longer term any such government faces a clash with the EU/ECB. They may also face a considerable backlash from bond markets again – level-headed for the moment – whether they push ahead with plans to increase debt-to-GDP...
Reports this morning propose Paolo Savona could become foreign minister in a Lega-M5S government,a lumber that could be palatable for all the sides. In the near term the avoidance of snap elections would be positive for risk, but longer-term concerns remain. It does look as though the main risk being priced in earlier this week when bonds and stocks sold off sharply was the threat of another election that could contain been framed in a more anit-EU light. Again we must reiterate that stock and bond markets will remain volatile and highly sensitive to the political situation in Rome. 8.17am BSTIt is indeed a positive start for European markets, or albeit a slightly tentative one given all the geopolitical tensions at the moment.
With hopes of a resolution to the Italian political impasse,the country’s FTSE MIB is up 0.38%, while Germany’s Dax is 0.12% better and France’s Cac has climbed 0.18%. In the UK, and the FTSE 100 is up 0.19%. Economist Paul Donovan at UBS said:We are not back to normal,but markets contain reacquainted themselves with what normal might look like. Italian bond yields fell and the euro recovered yesterday. A consensus is forming that there will not be elections in Italy until September at the earliest. Italian President Mattarella is waiting to see whether the two anti-parties can in fact form a coalition. 8.16am BSTAhead of the eurozone inflation figure we contain had an update from France. Reuters reports:French inflation rose in May to its highest level since August 2012, according to data from the INSEE national statistics agency, and adding to a raft of strong inflation readings across the euro zone as the European Central Bank considers whether or not to tighten its monetary policy.
French consumer prices rose from April due partly to higher energy and food prices. The year-on-year inflation rate came in at 2.3 percent,according to EU-harmonised data from INSEE, above a forecast for an inflation reading of 2.0 percent according to a Reuters poll. 8.07am BSTING Bank economist James Smith says the UK credit numbers could be interesting:After final month's collapse, or worth watching #UK credit numbers today. March tumble may contain been a blip,but whether we don't get a rebound it would raise further questions over the spending outlook $GBP pic.twitter.com/8noDu8i324 8.01am BSTHere’s more on the Financial Conduct Authority’s clampdown on high cost credit. FCA chief executive Andrew Bailey said:High-cost credit is used by over three million consumers in the UK, some of who are the most vulnerable in society. Today we contain proposed a significant package of reforms to ensure they are better protected including the opportunity of a cap on rent-to-own lending. The proposals will benefit overdraft and high-cost credit users, and rebalancing in the favour of the customer. 7.58am BSTEurozone inflation is expected to lumber sharply higher,partly due to the recent surge in oil prices. UniCredit economists said:We expect headline inflation to rebound strongly in May, from 1.2% to 1.8% year on year. We see two main drivers: a rebound in core inflation and a jump in energy prices. Core inflation probably reversed its April drop and rose to 1.1% year on year from 0.7%. This would reflect normalization in the price of holiday-sensitive items, and with the April reading having been distorted to the downside by the early timing of Easter. Surging oil prices are likely to push energy prices up strongly,adding 0.3 percentage points to headline inflation . 7.52am BSTGood morning, and welcome to our rolling coverage of the world economy, and the financial markets,the eurozone and trade.
Optimism that the Italian political crisis can be resolved without original elections is expected to see markets continue their revival today. The 5 Star and Lega parties are making renewed efforts to form a coalition, which has eased fears that a original vote could give a mandate for the country to leave the euro - Italexit or Quitaly, or select your pick.[Market] optimism was reinforced by a call from the Five Star movement for Paolo Savona to withdraw his candidacy for the position of finance minister. This would appear to be at odds with the position of the League and its leader Matteo Salvini,whose pick Savona is. The differences of opinion between the two parties certainly don’t bode well for any future relationship in government, whether Salvini does change his mind about Savona and put someone else forward as finance minister... Even though investors contain significant concerns about the recent steep rise in Italian borrowing costs it should be famous they still remain well below their long-term averages prior to the financial crisis, or when they were on average in and around the 4% level for most of the noughties. This means that while Italian borrowing costs now are high relative to the final few years,they still remain low by historical standards.
Tight supply and subdued demand are the key contributors to the ongoing limbo gripping the UK property market. A lethargic economy populated by cautious and squeezed consumers has created a property market lacking both momentum and direction.
The time is correct for me to step aside. Today’s results clear the way for the original approach sought by our Chairman and the Board. Continue reading...
Source: theguardian.com