No Change From The Bank Of England
The Bank of England released its minutes from this months interest rate meeting and once again it offered no surprises. The voting remained at 7-2 and whilst there remains a few in favour of a rate hike, the majority remain firmly against raising rates as there are few signs of inflation pressure building. A couple of months ago, it seemed likely that we would see the Bank of England move away from record low interest rates, this is currently not on the horizon.
The Euro struggled yesterday after a news report was published in Spain, hinting that 11 Eurozone banks will fail ECB stress tests. This provoked a dismissive reaction from the ECB stating that “any inferences drawn as to the final outcome of the exercise would be highly speculative until the results are final on the 26th October”.
Further weakness for the Euro ensued after higher than expected US inflation data and ECB members further discussions on what to do moving forward. Mersch commented on the vulnerability of the Eurozone and unless governments make sufficient efforts to boost growth, the economy would remain vulnerable. Nowotny commented that purchasing corporate bonds remains an option in increasing the balance sheet.
Todays data releases include PMI from the Eurozone, retail sales from the UK and jobless claims, PMI and housing price index from the US.