The Bank of England’s Monetary Policy Committee (MPC) released their inflation report for May 2014. The dovish tone of the pre-prepared text, led to sterling trading new session lows in the FX market, as the optimism for an interest rate hike in the near term was dampened as Carney attempted to lower expectations. The BoE left their forecasts for both inflation and growth almost unchanged from the previous release, reinforcing the expectation for a rate hike will not be until 2015.…

The Bank of England has the enviable position that the UK economy is growing and needs to time the exit of ultra-loose monetary policy. Interest rates have been at the record low (0.50%) for over 5 years, and the economy is in recovery mode. The majority of economists are pencilling in a rate rise for Q1/2 in 2015. How is the economy doing? Economic growth: 3% for 2014 and 2.4% in 2015 (Confederation of British Industries) 2.9% for 2014 and 2.7% in 201…

The eagerly anticipated monthly US employment release is today at 13:30 BST (London). The Depart for Labor releases the Non-Farm payroll employment report, which covers jobs in goods, manufacturing, and construction companies but excludes farm workers, non-profit organisations and private households. This release will closely watched by traders following the abysmal US Q1 GDP release of 0.1% growth. The figure was a huge disappoint, though the cold weather has been largely blamed for t…

The Markit/CIPS UK Manufacturing PMI for April released at 9:30am beat analysts expectations with a print of 57.3 for April vs 55.8 March. The manufacturing index rose to a 5 month high, registering one of the best readings over the last 3 years. This is a significant boost to the UK government, as the economic recovery begins to really take hold, though this puts further pressure on the Bank of England. Carney reiterated that increasing interest rates would happen when the slac…

The Federal Open Market Committee (FOMC) will release their policy update at 19:00 (BST) this evening. It is expected that Chair Janet Yellen will announce that they will taper the amount of monthly asset purchases by a further $10 billion. The asset purchases are split between Treasuries and Mortgage Backed Securities (MBS). Since the tapering begun under previous Chairman Bernanke, the FOMC has voted unanimously each month to reduce the purchases by $10bn; any deviation from this is…

The Office for National Statistics (ONS) has released its first estimate for UK growth for the last 3 months at 0.8% slightly below analysts’ expectations of 0.9% for the quarter. The UK economy has grown by 3.1% over the last year, the ONS says. That's the strongest year-on-year change in GDP since the Q4 of 2007, after the near-collapse of Northern Rock.Though the figure is "disappointing” compared to expectations the key point to remember is that is shows the economy…

The Office for National Statistics (ONS) released their March statistics for UK retail sales. The volume of sales edged up by 0.1% compared to February, a marginal improvement though the year-on-year figures were significantly higher, up 4.2% compared with March 2013. This difference has in part been attributed to the freezing cold weather that was experienced last year, which hampered sales. The headline for the release is that that the Non-Food stores saw the highest YoY increase (+9…

The Bank of England released the minutes of the Monetary Policy Committee meeting for the 9th April this morning. The MPC voted unanimously (9-0) to leave interest rates at the record low level of 0.50% and the level of asset purchases unchanged at £375bn. Following the release in the FX markets sterling has been choppy as some would have hoped that a member of the MPC might have voted for a raise in rates. Cable is trading at a 5 year high with traders betting on the economic gr…

The Office for National Statistics released the ILO Unemployment rate for the 3-months to February, which dropped to 6.9% from the previous reading of 7.1%. Employment was 239,000 higher than for September to November 2013 and 691,000 higher than a year earlier (ONS). The release shows a significant improvement in the unemployment rate, and poses a headache for the Bank of England. Mark Carney detailed under his forward guidance that the threshold for increasing interest rates would be the u…

The Office for National Statistics released inflation data for March this morning, showing that the Consumer Price Index (CPI) had fallen since February; 1.7% to 1.6%. The may contributors to this fall were from the costs of transport and food, with a small impact from clothing and household goods. The full ONS CPI release for March The Retail Price Index (RPI) grew by 2.5% in the year ending Mach 2014, down from 2.7% in February. The macro release should be a positive for…

The Bank of England has left interest rates at the record low of 0.50% to help stimulate the economy, following the financial crisis. There has been significant coverage in the media over the concerns of a new bubble emerging in property prices, specifically in London. The UK economy is beginning to fire on all cylinders (though unevenly) the focus is on the timing of the Bank of England’s raising of interest rates. The latest release from the Royal Institute of Chartered Surveyo…

The UK economy is growing, and recently releases of macros data have beaten economists’ expectations: According the Office for National Statistics (ONS), UK industrial output has surged significantly above economists’ expectations; production increased 0.9% in February, compared to January with expectations of a +0.3% increase. The better than expected data, gave sterling a bid in FX markets, surging to above 1.6700 to trade at session highs. The British Chamber…