Finally, some good news for the Bank of England?
UK Average Earnings numbers in the three months to November came in a little lower than expected yesterday at 4.1% while the number of people claiming jobless benefits fell for a third straight month in December. The ONS said claimant count was showing the longest run of falls since the period between Oct 04 and Feb 05.
While this provides some good news for the Bank of England its influence is only limited. Far more important to inflation and interest rate prospects is what now happens to pay over the coming weeks.
The Bank of Japan kept interest rates steady overnight, sending the yen to a 13-month low and raising questions over whether the BOJ had succumbed to government pressure to hold off on a tightening. The BOJ said its board voted 6-3 in favour of keeping rates at 0.25 percent -- the lowest in the developed world -- and the market was now eyeing the chance of a rate rise as early as next month.
Japanese media, in the run-up to the meeting, had reported the BOJ was unlikely to raise rates. Many in the market suspected the government of trying to sway the central bank so that it would not potentially damage the economy with a hasty move. Prior to those reports, investors had been braced for a rise.
Bank of Japan governor Toshihiko Fukui responded by saying the BOJ would retain independence by taking responsibility for its own decisions. Fukui said the BOJ judged it prudent to watch for more data given that indicators had been mixed. He added that consumption was in a rising trend but the pace was only moderate.
In the U.S yesterday Producer Prices rose in December at a more moderate pace than a month earlier and industrial output ended the year on a strong note, suggesting little need for the Federal Reserve to alter its steady-as-it-goes interest-rate stance. The Labor Department's Producer Price Index increased 0.9 percent in December.
Excluding volatile food and energy prices, the index advanced a smaller 0.2 percent. The Fed reported industrial output that was stronger than expected in December, rising 0.4 percent on robust gains in manufacturing and mining. For all of 2006, industrial output grew 4 percent, the biggest annual gain in six years.
Both reports strengthened the belief the Fed was not likely to cut interest rates over the next few months, particularly as the economy still showed some risks of inflation.
On that note the important economic release today is likely to be the U.S Consumer Price Index where a rebound in energy costs is expected to push the December reading higher. Forecasts are for the headline number to increase by 0.5% after a flat reading last month.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
While this provides some good news for the Bank of England its influence is only limited. Far more important to inflation and interest rate prospects is what now happens to pay over the coming weeks.
The Bank of Japan kept interest rates steady overnight, sending the yen to a 13-month low and raising questions over whether the BOJ had succumbed to government pressure to hold off on a tightening. The BOJ said its board voted 6-3 in favour of keeping rates at 0.25 percent -- the lowest in the developed world -- and the market was now eyeing the chance of a rate rise as early as next month.
Japanese media, in the run-up to the meeting, had reported the BOJ was unlikely to raise rates. Many in the market suspected the government of trying to sway the central bank so that it would not potentially damage the economy with a hasty move. Prior to those reports, investors had been braced for a rise.
Bank of Japan governor Toshihiko Fukui responded by saying the BOJ would retain independence by taking responsibility for its own decisions. Fukui said the BOJ judged it prudent to watch for more data given that indicators had been mixed. He added that consumption was in a rising trend but the pace was only moderate.
In the U.S yesterday Producer Prices rose in December at a more moderate pace than a month earlier and industrial output ended the year on a strong note, suggesting little need for the Federal Reserve to alter its steady-as-it-goes interest-rate stance. The Labor Department's Producer Price Index increased 0.9 percent in December.
Excluding volatile food and energy prices, the index advanced a smaller 0.2 percent. The Fed reported industrial output that was stronger than expected in December, rising 0.4 percent on robust gains in manufacturing and mining. For all of 2006, industrial output grew 4 percent, the biggest annual gain in six years.
Both reports strengthened the belief the Fed was not likely to cut interest rates over the next few months, particularly as the economy still showed some risks of inflation.
On that note the important economic release today is likely to be the U.S Consumer Price Index where a rebound in energy costs is expected to push the December reading higher. Forecasts are for the headline number to increase by 0.5% after a flat reading last month.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
posted by Drs Search @ 10:34 AM
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