Morning part of Tuesday's session was marked by UK Services PMI data.UK Services PMI registered 55.8 in December, down from 58.6. Analysts were forecasting slight increase to 58.9. The latest reading was the lowest recorded for 19 months, amid some reports that insufficient unit capacity or lower enquiry levels compared to earlier in the year had weighed on the rate of activity growth.
Thursday's session brought Halifax HPI figures as well as BoE interest rate and asset purchase decision. UK house prices rose by 0.9% in December beating market expectations on a smaller incline by 0.3%. House prices in the final three months of 2014 were 0.3% higher than in the preceding three months. The quarterly rate of increase has now fallen for five successive months. Annual price growth also eased further, to 7.8% in December. This compares with a peak of 10.2% in July.
As it was largely expected the Bank of England’s Monetary Policy Committee at its meeting today voted to maintain Bank Rate at 0.5%. The Committee also voted to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion, and so to reinvest the £4.35 billion of cash flows associated with the redemption of the January 2015 gilt held in the Asset Purchase Facility.
From the UK, on Friday, Industrial Production and Trade Balance figures were released. UK Industrial Production decreased by 0.1% between October 2014 and November 2014, missing forecasts on 0.2%. This reflects an increase of 0.7% in manufacturing, above expected increase on 0.4% incline. Partially offsetting this increase were decreases of 3.7% in mining & quarrying, 1.3% in the electricity, gas, steam & air conditioning sector and 0.4% in the water supply, sewerage & waste management sector.
Trade Balance figures beat prediction on deficit of £9.5 billion. Seasonally adjusted, the UK’s deficit on trade in goods and services was estimated to have been £1.4 billion in November 2014, compared with £2.2 billion in October 2014. This reflects a deficit of £8.8 billion on goods, partly offset by an estimated surplus of £7.4 billion on services.
This week markets will be looking at:
CPI/PPI (Tuesday 10:30)
