Markets buoyed by flow of good news
There was more good news for the US economy yesterday when, as expected, the GDP growth rate for the third quarter was revised up. The US economy expanded at an annualised rate of 2.7% in Q3 following an initial estimate of 2.0%. The revision was due to companies rebuilding their stock levels and a jump in public spending. This suggests that this pace of growth is unlikely to be sustained into the final three months of this year.
In the Eurozone, the European Central Bank stands ready to “intervene” again if necessary to preserve the euro’s stability, its president Mario Draghi said Friday, in a reference to the “unconventional means” the ECB has pledged to use. Draghi added that ” We have not yet emerged from the crisis and the recovery for most of the euro zone will certainly begin in the second half of 2013. It’s true that budgetary consolidation entails a short-term contraction of economic activity, but this budgetary consolidation is inevitable”.
In the UK , the mortgage approvals surprised on the upside for the second month in a row with a 5% rise in October to 53.0k. Although activity remains low, the Bank of England’s Funding for Lending Scheme looks to be feeding through into lending conditions. According to GfK NOP survey, British consumer confidence unexpectedly picked up to an 18-month high in November. The headline index rose to -22 from -30 in the previous month, the strongest reading since May 2011.
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