U.K. industrial production and manufacturing output shrank in May, taking both indexes to their lowest level since 1992 and highlighting the challenges still facing the U.K. economy.
Industrial production is highly volatile and three-month output data is seen a better guide. In the three months to May, industrial production fell 1.8% from the previous three-month period, while manufacturing output declined 1.2%.
At its two-day meeting ending Thursday, the Bank of England’s Monetary Policy Committee is widely expected to increase the size of its quantitative easing program, through which it is buying public and private-sector securities with freshly created central-bank money, to £150 billion from the current £125 billion.
Tuesday’s data support the case for such a move, as they will add to policy makers’ concerns about the sustainability of any improvement in the economy, and could help persuade the committee to consider further increases in bond-buying in the future.
In the US, delinquencies on credit card debt and home equity loans reached all-time highs in the first quarter as a record number of cash-strapped consumers fell behind on their bills. Delinquencies on the value of all card debt soared to a record 6.60% from 5.52% in the fourth quarter as more cardholders relied on plastic to meet day-to-day expenses, the American Bankers Association said. Late payments on home equity loans rose to 3.52% from 3.03%, and on home equity lines of credit climbed to 1.89% from 1.46%.
UK and European markets have opened flat, and U.S. markets are currently pointing to a slightly negative opening when their markets open this afternoon.
Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times:
Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia:
Please note this report provides a guide to some of the relevant areas that individual investors should consider discussing with an authorised adviser in relation to their specific circumstances, it does not constitute individual advice. As a result no action should be taken or refrained from being taken as a result of its content.
