Posts belonging to Category Sovereign Debt

FED keeps loans interests rate unchanged

There was no surprise from this week’s FED meeting, as Janet Yellen announced there would be no loans interest rate hike in September.

There was no surprise from this week's FED meeting, as Janet Yellen announced there would be no loans interest rate hike in September.

The interest rate has not moved since last December’s decision to move interest rates from 0.25% to 0.5%. Another rate hike in December 2016 is now looking a shoe in.

It seems that unless global economic sentiment deteriorates in the next few months, December is seen as a good time to move again. As key data solidified in recent months, the Fed now want to see ‘economic progress’. Employment and inflation will be scrutinised until the end of the year, and the Fed members seem more aggressive as three voted to move rates, where as in July there was just the one.

UK’s public sector net borrowing falls

The UK’s Public Sector Net Borrowing fell in August, as the latest figures from the Office for National Statistics were released. The Public borrowing figure has dropped to £10.5 billion from July, down £0.9 billion from a year earlier, but the numbers had been expected to fall an additional £500 million. UK Borrowing in the present economic year to date has touched £33.8 billion, which is £4.9 billion lower than the previous year.

The ONS did say that ‘there was no clear sign of Brexit voting affecting the figures’. They also added that ‘receipts from income and corporation taxes rose strongly compared with a year ago, but VAT receipts rose at their slowest annual pace since March 2015′.

Also out was positive car production news in the UK, as car production touched a 14 year high in August. According to the Society of Motor Manufacturers and Traders (SMMT), just over 109 K vehicles were released from manufacturers hands, up 9.1% year on year.

Attention shifts to Sterling

Following a bit of an anti-climax after no policy changes from the FED on Wednesday we only saw a narrow trading range of about 100 points on the GBPUSD pairing yesterday. We surprisingly saw an even narrower trading range on GBPEUR yesterday considering we had the President of the ECB, Mario Draghi speaking at 2 pm. Further to this, he gave a speech at the first annual conference of the ESRB (European Systemic Risk Board) where he discussed overbanking in Europe and macro-prudential policy. We didn’t see too much market movement during this speech as it was mainly focussing on the broader picture of the over European banking system.

Attention focuses on Eurozone and US PMI

With not much news to drive the market today, the attention will be focussed on Eurozone and US PMI. So far, both have shown resilience in the face of the UK’s vote to leave the EU although analysts will be watching for hints of pre-election nerves within the US economy.

Wise Money waiting for key US data on Friday

Today we have US employment data which will give us a taster as we build up to the key non farm payroll data on Friday.

wisemoney US employment data which will give us a taster as we build up to the key non farm payroll data on Friday.

Feedback from the labour market is the highest consideration, as the FOMC judge whether it is appropriate to increase interest rates. On Friday the payroll data is expected to come in at a healthy 175k, and average earnings are likely to increase by 0.2%.

We could also see the unemployment rate fall slightly to 4.8% from 4.9%. If we see positive US data this week, it will build expectations for a September rate hike and lead to USD gains.

Eurozone inflation softer for August

In the Eurozone, CPI for August (y/y) has come in slightly softer than expected at 0.2% vs 0.3% expected. In addition, the unemployment rate for July has been confirmed at 10.1% which is in line with forecast. This morning the euro has been on the back foot and disappointing inflation data will not help this trend.

Pound finds tentative momentum

The Pound has managed to pick up this morning against the euro and the USD. Following a better run of UK data this week, the pound is finding some tentative momentum. Tomorrow we have UK Manufacturing PMI, and on Friday Construction PMI to give further feedback for the UK economy.

Bridging finance- great interest rates available

Wise Money is pleased to be offering competitive bridging finance at only 0.6% interest rates per month.

Wise Money is pleased to be offering competitive bridging finance at only 0.6% interest rates per month

Wise Money is part of a select group who have access to a Bridge that offers a monthly rate of 0.60%. There is a substantial but limited “test the water” fund, on a first come first served basis. You will also note that the lending criteria is quite a bit “tighter” than you would usually expect but this is driven by the lower rate.

Bridging Finance Product information

Maximum Loan to Vlaue: 50%
Minimum Loan Size: £100,000
Maximum Loan Size: £3,000,000
Length of the Term: 12 months maximum
Minimum property value: £200,000 per property
Interest Rate: 0.60% per calendar month
Administration fee: £350

Bridging Finance Underwriting Criteria

No works to be done to the property with our money (can use your own)
No off shore companies
No first time landlords
Purchases or refinances
No adverse credit in the last 3 years
You must have net assets of £500,000 (excluding marital home)
You must earn minimum of £30,000 (provable for employed via 2 x payslips and bank statements showing credits. If you are self employed SA302 or 3 x bank statements showing income being received)
3 months bank statements on all cases

Once again there are limited funds for this product so cases will be accepted on a first come, first served basis.

If you have any bridging finance enquiries, please call our team for a free, confidential and no obligation discussion on 0800 0147798 asking for the Wise Money. Com Service NOW!

Buy To Let BTL finance difficult or complex situations

Buy To Let (BTL) finance for people in difficult or complex situations

Buy To Let (BTL) finance for people in difficult or complex situationsWhen the high street says no, it doesn’t mean the case can’t be placed. Wise Money specialises in difficult and complex BTLs and can place the following unusual application types:

  • Ex-patriots
  • Complex corporate structures, Ltd’s, LLP’s, partnerships, trusts and SIPPs
  • First-time landlords
  • Adverse can be considered
  • HMO’s, light refurb properties, holiday-lets, multi-lets, commercial, etc.

We have many products to suit:

  • Up to 85%
  • Rates from 2.89%
  • Interest only products
  • England, Scotland & Wales

If you have any BTL, Commercial or bridging enquiries, please call our team on 0800 0147798 asking for the Wise Money Service
Please just click on the Get Started button- or fill out the free, no obligation form below:get started

Please just click on the Get Started button- or fill out the free, no obligation form below:get started

Buy To Let Mortgages for the retired

Buy To Let (BTL) mortgages for the retired and retirees.

Buy To Let (BTL) mortgages for the retired and retirees.

If you would like to purchase BTL properties but are struggling to find finance, Wise Money has access to products for applicants up to the age of 80 with a maximum term of up to 30 years (this includes Homes of Multiple Occupancy and Limited Companies).

Applicants to age 80
Rates start from 3.29%
Up to 80% LTV
No minimum income up to £1 million loan
Interest-only option available

If so then please just click on the Get Started button- or fill out the free, no obligation form below:get started

Please just click on the Get Started button- or fill out the free, no obligation form below:get started

Sterling remains flat as Osborne delivered Budget 2016

It was a big day for the UK yesterday as George Osborne released the Government’s budget for 2016.

It was a big day for the UK yesterday as George Osborne released the Government's budget for 2016.In a coup for small businesses, middle class workers, savers and energy companies, Mr Osborne’s tax cuts have been widely criticised as an attempt to woo UK voters in his last statement ahead of the EU referendum in June.

The UK economy’s growth and productivity forecasts were downgraded disguising a £56 billion ‘’black hole’’ in the Government’s finances as Osbourne favoured the more crowd pleasing approach.

Osborne warned that amidst a backdrop of slowing global growth and turbulence in financial markets, a possible Brexit would only hurt UK business and consumer confidence further.

Despite the budget receiving much attention here in the UK, foreign exchange markets refused to take notice and Sterling remained steady against all major currencies over the course of the day.

Yellen ends US interest rate rise speculation

Last night the Federal Reserve’s FOMC met in the US. Janet Yellen’s resulting speech stated that interest rates would remain unchanged for the time being and was much more dovish in tone than expected.

With all the clues suggesting that, the Fed won’t be discussing interest rates again now until June, the US dollar came under pressure. However, despite dollar weakness and the worrying state of the global economy, Yellen suggested that US economic activity had been expanding at a moderate pace.

Today markets will be spending the majority of the day deciphering Janet Yellen’s press conference from last night.

Later in the trading session, we will receive EU CPI data and an interest rate decision from the Bank of England. From the US, the Philadelphia Fed manufacturing survey and weekly Jobless Claims will be of interest.

Volatility day expected for UK Budget and FOMC meeting

Today is UK Budget day for George Osborne

Today is UK Budget day for George OsborneTonight brings us the US Federal Reserve (FOMC) interest rate decision. The FOMC are not expected to change interest rates tonight, but the meeting will give clues about the timing of the next move.

The most important aspect of tonight’s meeting will be the ‘dots’ – this closely watched graph shows the central bank’s forecast interest rates.

It’s anticipated that the rate run will contain another two or three hikes this year and four next year. The FOMC could present June as an opportunity to hike, and if so, this is likely to feed into USD strength. Overall, markets expect that the meeting’s sentiment will lean to the hawkish, with a firm focus upon the performance of global markets and the domestic labour market.

A day full of economic data

Before we get to the FOMC meeting we have plenty of economic data to digest. US CPI inflation data is projected to increase by 0.2% in February, and remain unchanged at 2.2% for the year. We also have US industrial and manufacturing production data, which is expected to weaken.

From the UK we have key unemployment data today. The unemployment rate is forecast to remain unchanged at 5.1%. Market focus will be on average earnings data; although numbers were flat in January there is optimism that wages should be now moving higher.

Finally, we get to hear Chancellor George Osborne present the Budget today. The Pound has softened in the run up to the announcement, over concerns for the potential aggressive fiscal tightening that could be delivered.

Commonwealth dream for Brexit

Eurosceptics campaigning for the UK to leave the European Union dismiss the idea that “Brexit” would leave the country economically isolated and bereft of trade alliances.

Eurosceptics campaigning for the UK to leave the European Union dismiss the idea that
They point out that the UK’s links with the 53 nation Commonwealth, composed mainly of territories that belonged to the former British Empire- predate its membership of the EU.

And the Commonwealth itself is eager to stress the trade advantages that its members enjoy by virtue of belonging to the association.

As it opens its 24th summit in the Maltese capital, Valletta, which runs from 27 to 29 November, its place in the global trade landscape is a topic high on the agenda.

At least one influential senior Commonwealth figure from outside the UK argues that the country has no need to choose between the EU and the Commonwealth – it can have both.

With the eurozone currently beset by economic troubles, some commentators feel that the UK should turn away from its stagnating neighbours in favour of broader global trade pacts.

They are assisted in this view by statistics such as those produced by the organisation World Economics, which has a growth tracker showing that the Commonwealth has already overtaken the eurozone in its share of world economic output.

“The Commonwealth accounts for 2.6% more than the eurozone in terms of world GDP share,” states World Economics. “Economic growth in the Commonwealth has accelerated over the post-1973 period in sharp contrast to the EU.”

However, such comparisons can be misleading, since the Commonwealth is far from being a unified or homogenous bloc.

As the Commonwealth’s own website says, “Our countries span Africa, Asia, the Americas, Europe and the Pacific and are diverse – they are amongst the world’s largest, smallest, richest and poorest countries.

“Thirty one of our members are classified as small states – countries with a population size of 1.5 million people or less and larger member states that share similar characteristics with them.”

In fact, just six Commonwealth countries account for more than four fifths of all trade conducted by the organisation’s members. Apart from the UK, they are Australia, Canada, India, Malaysia and Singapore.

As things stand, the UK isn’t exactly giving any of these countries the cold shoulder. Earlier this month, the UK and India signed commercial deals worth £9 billion during a visit to London by India’s Prime Minister Narendra Modi – a visit seen as giving an important boost to the UK’s relations with the world’s fastest-growing large economy.

Other big Commonwealth economies are not badly placed either. Some Conservative MPs, including Boris Johnson, feel that the UK “betrayed” countries such as Australia when it joined the EU in 1973, but the Australian government doesn’t seem to see it that way.

“We share an extensive economic, trade and investment relationship,” says the Australian government website’s country brief on UK relations, before going on to list the evidence.

Investment is particularly strong: the UK is “the second-largest source of total and direct foreign investment in Australia”, while Australia returns the favour, with the UK also being “Australia’s second most important foreign investment destination”.

For its part, the Commonwealth stresses that countries benefit economically from belonging to the club. According to its Trade Review 2015, members’ combined exports of goods and services amounted to $3.4 trillion in 2013, “which is about 15% of the world’s total exports”.

“When both bilateral partners are Commonwealth members, they tend to trade 20% more, and generate 10% more foreign direct investment inflows than otherwise,” says the review.

“This ‘Commonwealth effect’ implies bilateral trade costs between Commonwealth partners are on average 19% lower compared with those for other country peers.”

So the Commonwealth does seem to confer economic benefits on its members.

British academic Angus Deaton awarded Nobel economics prize

British academic Angus Deaton has been awarded the Nobel economics prize for 2015 for his analysis of consumption, poverty, and welfare.

British academic Angus Deaton has been awarded the Nobel economics prize for 2015 for his analysis of consumption, poverty, and welfareThe 69 year old professor of economics and international affairs at Princeton University was previously at Cambridge and Bristol universities.

His research focused on health, wellbeing, and economic development.

Professor Deaton had been in the running for the prize several times in past years.

The Nobel economic sciences committee said that individuals’ consumption choices must be understood before economic policy promoting welfare and reducing poverty could be formulated.

“More than anyone else, Angus Deaton has enhanced this understanding. By linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics, and development economics,” the committee members said.

The work for which Edinburgh-born Professor Deaton has been honoured revolves around three questions:

How do consumers distribute their spending among different goods?
How much of society’s income is spent and how much is saved?
How do we best measure and analyse welfare and poverty?

The secretary of the award committee, Torsten Persson, said Deaton’s research has “shown other researchers and international organizations like the World Bank how to go about understanding poverty at the very basic level.”

Persson praised Deaton’s work for illustrating how individual behavior affects a broader economy and demonstrating that “we cannot understand the whole without understanding what is happening in the miniature economy of our daily choices.”

Deaton, who was born in Edinburgh, and holds U.S. and British dual citizenship, said he was delighted to have won the prize and was pleased that the committee had awarded research that concerns the world’s poor.

“His research has uncovered important pitfalls when comparing the extent of poverty across time and place,” the committee said.

In his 2013 book, “The Great Escape,” Deaton expressed skepticism about the effectiveness of international aid.

He noted, for example, that China and India have lifted tens of millions of people out of poverty despite receiving relatively little aid money. At the same time, many African countries have remained mired in poverty despite receiving substantial aid.

“His view is that we don’t have these ready-made solutions, and money is not going to be the answer to many things,” Rodrik said.

The award includes prize money of 8m Swedish kroner (£637,000).

The economics award was not created by Alfred Nobel in 1895, but was added by Sweden’s central bank in 1968 as a memorial to the Swedish industrialist. The Nobel prizes will be given to winners on 10 December at ceremonies in Stockholm and Oslo.

UK interest rate debate continues

The Bank of England’s deputy governor for monetary policy has said that it would be “foolish to preannounce” a date for an interest rate increase.

UK interest rate debate continuesYesterday the Bank’s Monetary Policy Committee voted to keep interest rates at their current historic low of 0.5%.

Deputy governor Ben Broadbent said the Committee had no specific time in mind for a rise and comments by governor Mark Carney had been misinterpreted.

The interest rate has remained unchanged for 78 months.

The ultra low interest rate regime has boosted the housing market as homeowners enjoy record low mortgages rates, but penalised savers whose returns have dwindled to almost nothing.

Speaking to Radio 5 live’s Wake up to Money programme, Mr Broadbent said: “We are responding to things that are essentially… unpredictable.  And that means that it would not just be impossible, it would be foolish to pre-announce some fixed date of interest rate changes.”

Mr Broadbent said he saw no “urgency” to increase interest rates at present.

He added: “The economy clearly is recovering, but we had the most almighty financial crisis and there is still a bit of spare capacity left.”

“There is not that much inflationary pressure at the moment, [although] we expect that to build over time.”

The Consumer Prices Index, the most commonly used measure of inflation, fell to 0% in June, while earlier this week, the cost of a barrel of crude oil fell below $50, its lowest point since April.

Despite problems in the wider global economy, caused by the continuing crisis in Greece and fall in Chinese stock prices, Mr Broadbent said the overall outlook for the UK remained steady.

“We’ve seen unemployment come down pretty steeply,” he said, “and some signs of improving productivity growth. We’ve seen a material pick-up in wage growth, not sufficient to give us any big inflationary risk.

“But all of that would naturally lead to the case for some normalisation of interest rates to start building.”

He added that the economic recovery looked “well embedded and solid”, with the Bank expecting “steady growth over the next two years”.

Mr Broadbent was responding to media coverage of remarks made last month by the Bank’s governor, Mark Carney.

In a speech at Lincoln Cathedral on Monday Mr Carney gave what was interpreted as his clearest hint yet that the cost of borrowing would go up before 2016.

He said: “The decision as to when to start such a process of adjustment will probably come into sharper relief around the turn of this year.”