EU advances towards single banking union
European Union leaders took a big stride towards establishing a single banking supervisor for the eurozone, agreeing it would enter into force next year, opening the way for the bloc’s rescue fund to inject capital directly into ailing banks. The 27 EU leaders agreed at a Brussels summit to adopt a legal framework by the end of this year giving the European Central Bank overall responsibility for banking supervision. This means that all 6,000 banks in the single currency area would gradually come under ECB supervision by 2014, starting with banks receiving state aid, then large cross-border institutions. Most day-to-day oversight would be delegated to national bodies.
In the UK retail sales rose in September as consumers bought new winter clothing and school uniforms according to the latest data from the Office for National Statistics. Sales volumes, including automotive fuel, rose 0.6% in September, more than making up for the 0.1% dip the previous month. This is a welcome return to growth after two months of contraction and may have been assisted by the positive employment data reported earlier in the week. However, with inflation still outpacing wage growth, consumers will be unable to raise their spending significantly.
Meanwhile, fears regarding the state of the real economy in the US were heightened by US Initial Jobless Claims data. Jobless claims increased by 46,000 to 388,000 in the week ending 13 October. This compares to 342,000 the previous week which was the lowest since February 2008. The figure suggests that the pronounced dip in the overall rate of US unemployment which was announced earlier this month, may well prove to be a ‘flash in the pan’.
Chinese Q3 GDP growth data showed that economic activity in the world’s second largest economy slipped from an annualised 7.6% during Q2 to 7.4% in the three months to the end of September, suggesting that it’s now a case of the world catching a cold when the eurozone sneezes. The continued slowdown in China’s economy is blamed on decreased demand from the nation’s key export markets, and in particular the EU; recent trade figures have shown that the region is sucking in less imports than in previous years as self-imposed austerity measures in several states begin to bite.
On the FX markets, Sterling rose against the USD after the better than expected retail sales data added to signs of an improvement in the economy, while successful Spanish bond auction send the GBP/EUR exchange rate back into the 1.228 region.
Currency UK will offer you the best exchange rates available and ensure that your subsequent international transfers are handled as quickly and as efficiently as possible.
Do you want to earn some extra money? Then you can profit from our affiliate program by referring a company or friend that may benefit from our services and earn a commission in return. Contact us now on +44 (0)20 7738 0777 or click here.