Choppy day for the market
The amount of money that individuals in the UK borrowed in January increased £1.8B, in comparison with £0.9B in December, according to data released today by the BoE. Is this a good or bad thing? Well it shows an average increase in confidence in the UK economy which is has given GBP a small boost this morning.
Today is set to be a choppy day on the markets with the focus on Europe’s refinancing operation. The ECB is expected to make available a second tranche of €500 billion in 3-year liquidity funding (LTRO) to Euro zone banks. This will be followed by Federal Reserve Chairman Ben Bernanke’s 6-month monetary policy testimony to Congress at 15:00 GMT.
The ratings agency Fitch says the ECB is only delaying the collapse of some low rated banks. Some banks will work through their problems after buying time via the liquidity injections but others will ultimately meet their demise. Italian and Spanish banks are the most vulnerable (which should lead to immediate raids by Italian and Spanish investigators).
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