Rise in eurozone CPI slowest on record

Tue, 31 Mar 09 05:00 am

Consumer prices in the eurozone slowed to a record low year-on-year increase of 0.6% in March, down from a 1.2% year on year increase in February, according to the Flash estimate released by Eurostat. Eurozone inflation rate has never been this slow 1996 when records began. This is just the latest reason for the ECB to cut interest rates on the next monetary policy meeting on Thursday.

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UK retail sales growth stalled in February

Mon, 30 Mar 09 05:00 am

Retail sales growth in the UK almost stalled in February as consumers cut back on spending, figures from the Office of National Statistics show. Sales growth slowed to 0.4% last month, the smallest increase since 1995, after a 3.6% rise in January. Analysts had expected retail sales growth to slow to 2.5%.

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UK economy continues to shrink

Mon, 30 Mar 09 05:00 am

The UK economy shrank even more than expected in the last three months of 2008, figures from the Office for National Statistics show. The economy shrank by 1.6% from the third quarter, the most since 1980 and more than the original 1.5% estimate. GDP also contracted by 2% in the fourth quarter from the previous year, worse than the 1.9% contraction originally estimated last month.

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IMF calls for unity ahead of G20

Mon, 30 Mar 09 05:00 am

The head of the International Monetary Fund has stressed the need for unity among world leaders at the G20 meeting in London next week. "It is absolutely necessary for leaders to find agreement," said IMF managing director Dominique Strauss-Kahn. The UN has also called for urgent action at the G20 to prevent the financial crisis developing into a "catastrophe for human development".

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Brown takes stimulus plan to the US

Wed, 25 Mar 09 05:00 am

Gordon Brown will repeat calls for greater fiscal stimulus and more financial regulation on a visit to the US as part of his pre-G20 summit tour. The prime minister's strategies for reviving the economy appear to have been broadly backed by US President Barack Obama. Brown is touring three continents ahead of next week's G20 summit, calling on governments to back plans for possible further stimulus action.

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Global trade will shrink by 9%

Tue, 24 Mar 09 05:00 am

Global trade flows are set to shrink by 9% during 2009, according to a forecast by the World Trade Organization. Developed nations will be hardest hit, with trade expected to fall by 10%. %. Poorer countries will see exports fall 2-3%. If correct, the drop in trade would be the biggest since World War II.

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Unions press G20 to take new tack

Mon, 23 Mar 09 05:00 am

Union leaders from the UK and overseas have put forward a global five-point plan they want G20 leaders to adopt as a way of tackling the economic crisis. The plan includes job creation, some bank nationalisation, tackling wage deflation, and climate change action. The G20 meeting, which will be held in London in early April, brings together leaders from industrial and emerging market countries that make up 85% of the world economy.

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World economy to shrink

Fri, 20 Mar 09 05:00 am

The head of the Organisation for Economic Cooperation has echoed a statement from the IMF by saying that the world economy will most likely shrink this year. Angel Gurria, head of the body that represents the 30 most industrialised nations, said, "We are probably seeing a world which will go negative."

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Bank chiefs face more questions

Thu, 19 Mar 09 05:00 am

Scottish MPs will question senior executives from Royal Bank of Scotland and Lloyds Banking Group - two of the banks given multi-billion pound bailouts by the government.

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UK recession will 'last longest'

Wed, 18 Mar 09 05:00 am

The International Monetary Fund has predicted that the recession will last longer in the UK than in any of the world's other major economies.

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Barclays in treasury debt talks

Tue, 17 Mar 09 05:00 am

Barclays have confirmed this morning that they are in talks with the Treasury over its potential participation in the government's Asset Protection Scheme. Lloyds Banking Group and RBS are already signed up to the scheme. Barclays said that any decision on whether it would participate in the scheme would be based on "the economic merits to shareholders."

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House price fall gathers pace

Tue, 17 Mar 09 05:00 am

The fall in UK house prices gathered pace in January, according to the government's own house price index. Prices were 11.5% lower than in January 2008, an increase in the 10.2% annual fall seen in December. The price of the average UK property is now down to £195,724, a fall of £26,034 in the past year. Prices have been falling fastest in Northern Ireland, down 14.3%, and are still highest in London, where the average home costs £301,383.

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US retail sales boost markets

Fri, 13 Mar 09 05:00 am

Yesterday the US data showed better than expected retail figures for February and Bank of America announced that they expect to operate profitably in 2009. This led to a surge in equity markets and a rise in risk appetite for investors with the MSCI world index making its biggest rally since November. Japan and China also signalled an increase in efforts to boost growth leading Asian and European equities higher.

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Markets remain muted

Thu, 12 Mar 09 05:00 am

Equity markets remain neutral this morning ahead of retail sales figures and jobless claims due in the US this afternoon. Stocks posted minor rallies yesterday as JP Morgan Chase announced a profit in the first two months of 2009 although risk trends continue to drive international currency exchange rates.

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Market rallies exclude Sterling

Wed, 11 Mar 09 05:00 am

Yesterday brought an improvement in risk appetite with the news that Citigroup operated profitably in the two months of 2009. Accompanied by a speech from Ben Bernanke, this news restored market confidence and equity markets rallied which was reflected in currency exchange rates. This rally however has excluded Sterling, which remains weak on the back of unease surrounding Bank of England policy and a sharp decline in industrial production figures.

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Limited risk appetite returns

Tue, 10 Mar 09 05:00 am

European equities have rallied this morning and the US Dollar has declined as markets regain limited appetite for risk. Sterling however, has been excluded from this rally as it remains battered by weak manufacturing and industrial production figures out this morning. Uncertainty over the stability of the UK banking sector is also putting Sterling under pressure.

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US unemployment 8.1%

Mon, 09 Mar 09 05:00 am

Markets returned to risk aversion on Friday as figures out in the US showed unemployment has reached a 25 year high. The Pound is significantly lower against the US Dollar this morning as the government is set to take control of Lloyds banking group. International equities remain risk averse as the World Bank has predicted the global economy will contract for the first time since WW2 due to the current downturn.

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Quantitative easing to begin

Fri, 06 Mar 09 06:00 am

The Bank of England announced yesterday that it is to take unprecedented steps to ease the recession; ?75 billion will be injected into the British economy over the next three months.

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Eyes on MPC, ECB

Thu, 05 Mar 09 06:00 am

Markets are anticipating the release of interest rate decisions from the Bank of England and ECB this afternoon. Both are expected to make a 0.5% reduction to the current base rate with quantitative easing looking likely for the UK economy in future. It is unclear as yet how this will affect the value of Sterling. Some economists predict added uncertainty will damage the Pound, while others maintain an end to rate reductions could provide support for Sterling.

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Market Unease Continues

Wed, 04 Mar 09 06:00 am

Stock markets have recovered from their bout of extreme risk aversion with Sterling and the Euro trimming losses against the US Dollar overnight. Ben Bernanke warned yesterday that the US banking sector is yet to achieve stability and interest rate decision are due from the ECB and Bank of England tomorrow. The prospect of quantitative easing and more unconventional policy is fuelling investor uncertainty which is impacting on currency exchange rates.

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Risk trends dominate

Tue, 03 Mar 09 06:00 am

Risk trends remain the primary determinant of currency exchange rates this morning as the US cash injection for AIG yesterday renewed fears of institutional failure. Deemed too big to fail by the US authorities, AIG has received a further $30 billion in Federal funding and is now 77.9% taxpayer owned. Markets plummeted around the world on the back of this news sending the Pound and Euro to the bottom end of their trading ranges versus the US Dollar and Yen.

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Global equities plunge

Mon, 02 Mar 09 06:00 am

Global stock and equity markets have plunged around the world following worse than expected US GDP figures released on Friday. The US economy contracted at an annualised 6.2% in the fourth quarter of 2008 and this sent investor confidence plummeting and fuelled a rise in risk aversion. Reports this morning of further trouble in the banking sector and a potential bail out of AIG have kept risk aversion high on the international agenda, capping currency exchange rates.

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