Daily Economic Commentary: United Kingdom

Trading Discussion News and Economy
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With no major news being released, there was no catalyst to bust GBP/USD out of the 100 pip range it traded in yesterday. After seesawing up and down the charts throughout the day, at the end of the day, Cable ended up right where it started at 1.5510.

Preliminary mortgage approvals data came in slightly weaker than anticipated, posting a figure of 45,000 after it was expected to come in at 47,000. This is probably what kept the pound from regaining any of its losses from last Friday.

Earlier today, the GFK consumer confidence report was also released, and as predicted, the figure wasn’t that rosy. The report printed a score of -21, which indicates that British consumers have the same level of pessimism that they did in the previous month.

I have to wonder, will the recent snowstorms hitting the U.K. continue to affect consumer sentiment? Apparently, these are some of the worst snowstorms in almost 2 years and the last time we saw weather like this, consumer spending took a hit. We’ll have to wait and see in the coming months whether it did indeed affect Christmas shopaholics.

For today, we’ve got one red flag going up the economic pole in the form of public sector borrowing figures. The report, which basically measures how much the government spent (or saved) in the previous month. Consensus is that the government will post a deficit of 17 billion GBP for the month of November. Will a worse than expected figure send the pound tumbling down the charts?

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Thanks to some poor public finance figures, the pound found itself with the short end of the stick yesterday. GBP/USD closed 48 pips lower for the day to finish at 1.5462.

Apparently, the government has been spending too much on Beatles songs from iTunes, as public spending posted larger than anticipated deficit for the month of November. The public sector net borrowing report showed a figure of 23.3 billion GBP, much larger than the 17 billion GBP that was expected.

Okay, fine, they actually spent the money on health care and paying off some debt, but it is interesting to see that government spending went up, considering that it has supposedly taken up austerity measures. Perhaps it just felt like spending a little bit more before the start of the new year?

For today, we’ve got a few more red flags, as current account data, final quarterly GDP figures, and the latest MPC minutes are all due at 9:30 am GMT.

The current account is expected to show a deficit of 8.5 billion GBP during the third quarter. But don’t expect this report to make big waves in the market, as this data has been previously released via the trade balance report earlier this month.

Instead, keep your eyes peeled for the final GDP and MPC minutes reports. Many expect that there will be no change from previous reports that showed 0.8% growth during the third quarter. If today’s report were to suddenly show a different figure, it could serve as a catalyst to push pound trading in either direction.

As for the MPC minutes, it’ll be interesting to see whether there were more cat calls for any additional stimulus. If there were indeed more discussions for adding more quantitative easing to the economy, we may just see the pound sink across the board.

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Blimey, look at the pound fall! The Sterling continued to lose ground against its major counterparts yesterday when risk aversion maintained its hold in markets, and the U.K. posted less-than-awesome economic reports. GBP/USD fell for the fourth day in a row to its 1.5382 closing price. Meanwhile, GBP/JPY joined the 4-day sell-the-pound marathon by dropping 95 pips to 128.52.

The U.K.’s current account deficit gave the pound bulls a thrill when it surprisingly clocked in at 9.6 billion GBP from the second quarter’s 5.2 billion GBP deficit. Apparently, the increase in exports was offset by the bad figures from foreign investments. Tsk tsk.

The minutes from the Monetary Policy Committee meeting also failed to reassure the markets when it showed that the MPC members continued to play rock-paper-scissors on the U.K.’s economy. MPC member Andrew Sentance still hollered for a rate hike, Adam Posen pushed for more quantitative easing, while the rest of the members took a chill pill and voted for a sit-and-watch strategy.

The U.K.’s final GDP figures for the third quarter was last to come out yesterday, and even that failed to put a smile on the pound bulls’ faces. The data slipped to a 0.7% growth from its 0.8% preliminary figure. Given that the U.K. economy is expecting a ginormous tax increase and a series of steep budget cuts next year, a weak GDP ain’t exactly what the U.K. wanted for Christmas.

Maybe the BBA mortgage approvals report can give the pound a breather from its losses as it is expected to show 31,300 approvals in November, up from October’s 30,800 figure. Be sure to catch it at 9:30 am GMT!

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Boom baaaaby! Just like fireworks, the pound lit up the charts as it welcomed the New Year by exploding upwards. It was one of the biggest gainers last Friday as a positive HPI helped boost GBP/USD from 1.5422 to 1.5595.

The Nationwide house prices index gave the pound just what it needed to end the year on a high note. After printing back-to-back declines in house prices, most recently a 0.3% drop in November, the report finally let out a positive figure. House prices rose 0.4% in December, surpassing forecasts for a 0.2% tick down.

I would hold off on any further celebrations though. If you take into consideration the timing of the pound rally last Friday, and the general weakness the currency had been showing in the weeks leading to the end of the year, it could be argued that the pound’s last-minute rise was actually due to investors covering their pound short positions. This, of course, could mean that more losses await the pound in 2011.

In any case, today is a banking holiday in the U.K., so you’ll have to take a chill pill for now and wait until tomorrow to get your first taste of 2011 economic data.

Due tomorrow, the Halifax HPI is expected to print a 0.3% decline following November’s 0.1% fall. Will this report follow in the footsteps of last week’s Nationwide HPI? You’ll just have to see for yourself at 8:00 am GMT tomorrow morning!

Also, the manufacturing PMI is scheduled for release tomorrow. The index is slated to fall from 58.0 to 57.5 in December. Catch it at 9:30 am GMT.

The last tier 1 report for the week is due on Thursday. The services PMI, which measures the economic health of the services sector, is forecasted to slightly drop its reading from 53.0 to 52.9.

As usual, be on the lookout for better-than-expected results that may ignite another pound rally!

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Was December 31’s rally a mere fluke? Not even the lack of data could save the pound from sliding yesterday. Worries over the outlook for the U.K. in 2011 kept the pound grounded as GBP/USD fell 90 pips to close at 1.5476.

The pound didn’t have the best start to the year. But given the bleak outlook for the U.K.’s economy, what did you expect?

Inflation is anticipated to climb to 4.0% this year, double the target of the BOE. I’m sure the VAT increase, which is supposed to be implemented this month, has something to do with the forecasted rise. And let’s not forget the austerity measures that await the U.K. in 2011! It certainly looks like the central bank will have quite the battle on its hands if it wants to tackle inflation without slowing the economy further.

Let’s see if today’s data can lift pound bulls’ spirits a bit.

The main report to watch for is the manufacturing PMI, which is slated to show a drop from 58.0 to 57.3 in the month of December. Even though the index will likely print a decline, if the reading manages to stay above 50.0, it will still be indicative of growth in the manufacturing sector. Still, you’d best be on the lookout for worse-than-expected figures that may weigh down on the pound when the report comes out at 9:30 am GMT.

Net lending to individuals data may also be worth a second look today. According to forecasts, new credit issued to consumers is expected to reveal a 0.9 billion GBP net increase in November, a decline from the previous month’s 1.3 billion GBP net increase. It’ll be interesting to see the results of this report since it usually gives us an idea of the level of confidence of consumers.

That’s all for today, pip-folk. Now go out there and grab some pips!

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Let’s give a round of applause to the old chap! After losing ground against its major counterparts at the beginning of the week, the pound bounced back up the charts on better-than-expected economic reports in the U.K. GBP/USD rocketed by 111 pips to 1.5584, while EUR/GBP dropped by 96 pips to .8533. Boo yeah!

It seemed that the pound bulls got all excited when the U.K.’s manufacturing PMI rose significantly from 57.5 in November to a 16-year high of 58.3 in December. We’re talking about levels not seen since Tom Hanks was struttin’ his stuff in the box office with Forrest Gump! The mortgage approvals data also gave the pound bulls traction when it increased by 3,000 from October to November.

In fact, the high from the better-than-expected economic data got so contagious that markets were able to shrug off the drop in the net lending data from 1.5 billion GBP in October to 700 million GBP in November.

Only the construction PMI report is due for release today, but keep your eyes on the Sterling pairs! Analysts expect the data to slip a bit from November’s 51.8 figure, but an upside surprise can extend the bulls’ party.

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The daily chart of GBP/USD is starting to look like Pipcrawler’s favorite Christmas-themed striped shirt the way the pound has been alternating big wins and big losses! Yesterday, thanks to a disappointing construction PMI report, the bears’ were able to take over, pushing Cable down 75 pips to 1.5511.

Far worse than the expected reading of 51.0, the construction PMI report gave the U.K. its first below-50 reading in 10 months! The index fell from 51.8 to 49.1 in December, indicating that the construction industry contracted.

Some say the recent bad weather is to blame for the slump in construction activity. Even employment and confidence seems to have been bogged down. But on the bright side, new order growth picked up, which could be a signal of better times ahead.

The highlight of the day for the U.K. is the release of its December services PMI. The index is estimated to drop slightly from 53.0 to 52.8, but a worse-than-expected figure may give pound bears their first back-to-back victory in over a week.

We saw how strongly the markets reacted to the manufacturing PMI released earlier this week. The services PMI might be just as explosive! Tune in at 9:30 am GMT to get a piece of the action!

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Finally, a bit of consistency! After over a week of being in a virtual stalemate with pound bulls, bears were finally able to string together back-to-back results. With a disappointing services PMI backing their cause, they were able to drag GBP/USD down from its intraday high of 1.5564 to 1.5475 at the end of the day.

The pound was actually staging quite the rally up until the services PMI report burst its bubble. Analysts had estimated a slight decline from the previous reading of 53.0 to 49.7. Markets were certainly surprised to see the index print such a steep drop to 49.7.

This caused a bit of alarm to investors because this figure is indicative of contraction in the industry. Fingers are pointed at the bad weather conditions as the culprit of the slump in the services sector. And the U.K.’s high inflation has been punishing companies with high input costs as well. Hmm… It looks to me like the U.K. will have to depend on the manufacturing industry for growth because the services sector certainly seems like it’s incapable of stepping up.

With that report, the economic data inflow comes to an end. Not the best way to end the week, but the pound may still have a chance to regain some of its losses as the U.S. is scheduled to publish its ground-shaking NFP report today at 1:30 pm GMT. Don’t miss it!

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The pound finished of the first week of 2011 on a steady note, as it posted a 70 pip gain versus the dollar on Friday. Still, the pair has largely remained with a tight range. Will it continue to do the same this week, or is a breakout imminent?

Why do I think there could be a break out in the making? Well, we’ve got the Bank of England’s MPC statement coming up this week!

This week’s statement could be a rim rocker, as some specialists now believe that due to rising inflation, the BOE will have no choice but to eventually raise rates sometime this year. So far, Mervyn King and his boys have repeatedly said that they do not believe that inflationary pressures will remain. They’ve pointed to austerity measures that have yet to be kicked in high gear as something that could drag down prices in 2011.

Watch out for the statement on Thursday at 12:00 pm.

For today, watch out for the monthly Halifax housing price index report, which is due at 8:00 am GMT. Take note that last month’s release showed a decrease in home prices of 0.3%. If Halifax announces another decrease in prices this month, we could see the pound tumble across the board.

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Back to back baby! For the second consecutive trading day, the pound finished ahead of the dollar. GBP/USD rose 55 pips to finish at 1.5579. Still, the pound hasn’t been as hot as the Heatles (ask Mr. Lebron James about that), as it failed to close above the 1.5600 handle.

The steadiness of the pound could have been confusing to some market participants, as the only piece of U.K. data release, the Halifax housing price index, wasn’t exactly encouraging. The report printed a decline in housing prices of 1.3%, much worse than the anticipated 0.3% figure. This indicates that the British housing market remains as weak as a woman’s knees once Prince William enters the room.

So how did the pound keep pace? Well, apparently there were some deals between China and the U.K. worth about 4 billion USD. This hinted at strong trade relations between the two nations, which apparently, the markets received quite well.

Moving on, we got some news earlier today, as the BRC retail sales report was released. Sadly, for the first time in 8 months, the report showed a negative figure, as retail sales fell by 0.3% last December. This was somewhat surprising, considering that it was the holiday season. Did people do their Christmas shopping earlier, or did people hold back on spending during the holidays? This is a trend we’ll have to keep an eye on in the coming months.

No other data due for today, so you’ll have some time to enjoy your tea. Let me remind you though, to always be ready since you never know what might hit the market! Good luck today!

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Overcoming a lousy report early in the day, the pound staged a magnificent rally to record its third straight victory again the Greenback. Cable rose from an intraday low of 1.5513 and finished the day off at 1.5619.

The lone report released yesterday was the BRC retail sales monitor report, which unfortunately, bore bad news. According to the latest set of data, same store sales dropped by 0.3% year-on-year last month, a disappointing follow up to November’s 0.7% increase. The main culprit behind the decline? None other than the snowstorms in the U.K.!

Sadly, the outlook for consumer spending doesn’t look any brighter for the first few months of 2011. The VAT increase scheduled to be implemented this month will probably weaken retail sales in the first quarter of the year.

Let’s see if today’s trade balance data can get the ball rolling for pound bulls. The trade deficit is expected to shrink from 8.5 billion GBP to 8.2 billion GBP. But with the way manufacturing activity has been picking up, we might get better-than-expected results. Catch the action at 9:30 am GMT!

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Blimey! For the fourth consecutive day, the pound got drunk chugging on the dollar’s pips. Cable was finally able to break away from the 1.5600 handle and end the day 150 pips higher at 1.5768! Now the question is, can the pound get its party going for five days in a row?

Well, for a sweep to happen, the pound needs all the support it can get on the economic front. Yesterday it got lucky that there was enough risk appetite to overshadow the U.K.’s worse-than-expected trade balance report. Imports were projected to have outpaced exports only by 8.35 billion GBP in November. However, the actual report showed that the trade deficit grew to a record-high of 8.74 billion GBP.

This means that at 9:30 am GMT, the Manufacturing production report for November probably has to show that manufacturing activity increased by 0.4% or more during the month, while the industrial production report has to print an at least a 0.5% uptick to convince traders to root for the pound.

More importantly though, I think it will be the BOE’s interest rate statement later at 12:00 pm GMT that will determine the pound’s fate on the charts.

As Forex Gump mentioned in his blog yesterday, it is widely expected that the central bank will keep the cash rate unchanged at 0.50%, and the asset purchase facility steady at 200 billion GBP. However, some have their hopes high for a more hawkish tone from BOE Governor Mervyn King.

Remember that inflation has been a pain in the hiney for the bank and yesterday’s BRC Shop Price Index for December which showed that prices were higher by 0.1% than in November at 2.1%, may just give them one more reason to be more aggressive. Tune in to that!

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And just like that snap, the pound scores its fifth consecutive win against the dollar. Hollah! GBP/USD staged a strong break above 1.5800 after consolidating around its opening price of 1.5768 during the Asian session. It then tapped its three-week high at 1.5884 before closing finally closing the day at 1.5823.

So what got the pound hustlin’ like there was no tomorrow?

Well, there were the positive economic reports that we saw yesterday. Manufacturing activity maintained a steady pace of growth at 0.6% in November and beat the market’s 0.5% forecast.

On the other hand, industrial production fell short of the consensus by 0.1% when it only printed a 0.4% uptick for the month. It wasn’t all that bad though. Its reading for October was revised up to -0.1% from -0.2%.

Then there was the BOE’s interest rate statement. Despite another call from Andrew Sentance to raise rates, the MPC chaps turned the other cheek and for the 22nd month in a row, decided to keep the cash rate at its historic low of 0.5%.

What might have gotten the traders craving for the pound was BOE Governor Mervyn King’s announcement that the bank will maintain its asset purchase program at 200 billion GBP. Remember that inflation is still above the BOE’s target and buying private sector assets is only making it worse. Yikes!

And so, rumors have got out that we may hear a rate hike this year amid a shaky recovery and austerity measures kicking into full swing as the bank attempts to tame rising prices.

With that said, you should tune in to the PPI reports for December which are due later at 9:30 am GMT.

Input prices are expected to come in at 1.7% indicating that the price of raw materials bought by manufacturers increased from 0.9%. Output prices are also expected to show that the price of goods sold by manufacturers increased by 0.4% during the month.

Note that businesses usually pass on additional costs to consumers and so, better-than-expected figures will probably be bullish for the pound. Good luck!

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And the pound completes the week with a clean slate! Goalkeepers around the world should take notes! With help from a strong PPI figure, the pound arose victorious last Friday, completing its shutout victory against the Greenback. GBP/USD rose to a new one-month high, rising 51 pips to end at 1.5873.

Good news to all you pound bulls out there! The latest PPI input report marked its highest reading in nine months! The report, which measures the change in the price of goods and raw materials purchased by manufacturers and is a leading indicator of consumer inflation, printed a 3.4% rise, more than double the forecasted 1.6%!

This figure, together with higher VAT, seems to be hinting at increasing inflationary pressures for the U.K. in the near future. If the pressure builds up, the BOE may have no choice but to raise interest rates!

Just a couple of hours ago, the Rightmove HPI was released and it revealed a 0.3% uptick in house prices following last month’s 3.0% drop, putting a stop to the two-month slide. However, this small recovery has failed to boost the pound so far.

Tomorrow at 9:30 am GMT, we’ll see exactly how bad the inflation situation is getting in the U.K. as the latest CPI figure will finally be available. According to forecasts, December inflation should clock in at 3.3%, the same rate as that of November. Bulls, ready your attack! This potential has potential for a large upside surprise!

Then on Wednesday, we have employment data on tap. The claimant count change is expected to improve a bit and is expected to show a decrease of 1,400 in the number of people claiming unemployment benefits, slightly better than the previous month’s 1,200 decline.

Last but definitely not least, we have retail sales data coming our way at 9:30 am GMT on Friday. Can December defy all odds and beat November’s 0.3% growth? According to forecasts which expect a 0.1% decline, probably not! But be sure to catch the release anyway. We all know how the forex world is full of surprises!

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Aaaand, that’s seven in a row! The pound continued its winning streak against the dollar in yesterday’s trading, hitting an eight-week high at 1.5955 before ending the day at 1.5885 with a 15-pip win. Hollah! Now the question is, can it make it to eight?

Hmmm, judging from the data we saw earlier today, it just might!

It was reported by Rightmove that house prices in the U.K. didn’t plunge as much as the market had braced for. In December, the selling price of homes declined only by 36%, which is 3% lower than what experts had predicted.

There was also the Nationwide Consumer Confidence report for the same month which reflected optimism among the Britons when it printed at 53.0, topping both the 47.0 forecast and its 45.0 reading in November. Boo yeah!

However, the pound’s fate on the charts in today’s trading will largely depend on the December CPI report which is due later at 9:30 am.

Remember that inflation has been stubbornly staying above the BOE’s target for quite a while now. A lot of our buds in the FX hood think that because of this, the bank will be forced to hike rates earlier than it intends. And so, a figure higher than the expected 0.7% monthly uptick will most probably convince traders to root for the pound even more. Note that on an annual basis, prices are seen to have increased by 3.4%.

Make sure you don’t miss that, ayt? Peace out yo!

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There is just no stopping the pound! Its 61-pip win against the dollar yesterday marked its eight-day winning streak when it closed at 1.5946. Boo yeah! Against the yen, it tapped its 5-week high at 132.52 before ending the day at 131.77.

In case you missed out on the action yesterday, it was the higher-than-expected inflation figures for December that fueled the pound’s rally. The CPI report showed that on an annual basis, consumer prices increased at the fastest pace in eight months when it printed at 3.7%. This got traders rooting for the pound because the consensus was only a 3.3% uptick to match the rise we saw in November. Meanwhile, the core CPI which excludes volatile items, came in at 2.9% and beat the 2.6% prediction.

Now the big question is, will the BOE put its foot down on inflation and holler a rate hike?

Hmmm, I think that BOE Governor Mervyn King and his chaps, will wait for a while and see if the U.K. economy can handle an increase in interest rates. As my buddy Forex Gump has mentioned in his blog before, the decision is a lot more difficult to make considering that the government’s austerity measures will come in full swing and could weigh heavily on growth.

But perhaps positive economic data may just convince the BOE to take a stab at inflation. Yesterday we already saw that in RICS housing survey, house prices didn’t decline as much the 44.0% fall that the market had anticipated when it printed at -39.0% for December. It was also reported that consumer confidence rose to 53.0 in December from its 20-month low at 45.0.

For today, let’s tune in to the roster of labor data on tap later and gauge how it will affect the bank’s move.

At 9:30 am GMT, it is expected that the claimant count report for December will show that the number of people who filed for unemployment benefits during the month only declined by 300. On the other hand, both the unemployment rate and average earnings index are seen to match their previous readings, with rate of joblessness seen at 7.9% for December and the change in the price paid for labor anticipated at 2.2%.

Make sure you don’t miss the release of the actual figures later, aight? Peace!

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The pound moved sideways against the Greenback yesterday, as it encountered resistance at the 1.6035 area and support at 1.5950. GBP/JPY, on the other hand, wasn’t so lucky because it edged almost a hundred pips lower than its open price of 131.78.

Even though the U.K.'s claimant count change came in better than expected, printing a 4,100 decrease in jobless claims, it wasn’t enough to pull its unemployment rate down from 7.9%. A couple of disappointments in the labor market cramped the pound’s style, with a drop in average earnings and a decline in employment among the 16 to 24 year olds.

For today, the only piece of U.K. data on tap is the CBI industrial orders expectations report. This could show that the reading for January climbed from -3 to -1, indicating that industrial conditions improved slightly. If the actual figure lands in the positive zone, which indicates expectations for increasing orders, the pound could resume its rally. Keep an eye out for the actual report due 11:00 am GMT.

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It looks like the 1.6000 handle was too much to handle! For the first time in 10 days, GBP/USD found itself on the losing end, dropping almost 100 pips to close at 1.5896. Is this is a reversal in the making?

Today’s retail sales report may give us a clue, but before I get to that, lemme give you the lowdown on what drove pound trading yesterday.

The CBI industrial orders report was partly responsible for the pound’s weakness, as it printed a score of -16, way off the predicted -1 mark. This indicates that the recovery is still unstable, as orders have decreased.

Interestingly, the report showed that manufacturers expect prices to continue to rise. Remember, rising inflation has been sparked speculation that the BOE may just raise their rates in order to avoid a run of hyperinflation. It’ll be interesting to see whether inflation will continue to rise, or will taper off as many BOE officials are expecting.

In other news, concerns about Ireland (politics) and Portugal (credit rating), as well as rumors that Chinese may be raising rates, sparked risk aversion, which also sent the pound lower.

As for today, as I mentioned above, we’ve got retail sales data on deck at 9:30 am GMT. My buddy Forex Gump recently wrote about how to trade this week’s retail sales reports – you should check it out!

In any case, expectations are that sales dropped by 0.2% last December. Some believe that the poor weather conditions (don’t tell me you forgot about those snow storms already!) last month may have stifled even the most Louis Vuitton loving shoppers from hitting the streets. Do watch out though, because a better than expected result maybe just send GBP/USD above the 1.6000 handle!

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Whoa! Despite disappointing economic data, the pound was still able to erase its loss against the scrilla with a 107-pip win when GBP/USD ended the week at 1.6003.

It was reported on Friday that retail sales for December declined by 0.8% which was four times worse than the 0.2% fall that the market was eyeing. Yikes! Economic gurus say that the perhaps the bad weather in the U.K. during the Christmas season is one of the reasons why the report printed its lowest reading since 1988.

Making matters even worse was the BOE’s report on mortgage approvals in December that came in at 40,000 and fell short of the 49,000 approvals that the market was anticipating.

I guess the pound got lucky with traders during Friday’s trading. But without anything from the U.K. on our economic calendar today, will it be able to continue its rally? Hmm… I guess we’ll just have to wait and see.

Take note though, that tomorrow at 9:30 am GMT, we’ll have the initial GDP estimate for the fourth quarter of 2010 which is expected to show that the economy grew by 0.5%. And because of this much-anticipated report, we may see some profit-taking happen ahead of the release.

Along with that, the public sector net borrowing report for December will also be announced. Analysts are expecting to see an 18.3 billion GBP budget surplus to follow the 22.8 billion reading we saw in December.

That’s all I have for y’all today. Good luck!

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Hang in there, bro! Despite the lack of reports from the U.K. yesterday, the pound was able to cap the day with mixed results against its major counterparts. GBP/USD inched up by 14 pips to 1.6000, but EUR/GBP rose to .8529 and GBP/JPY slipped to 131.98.

Only Monetary Policy Committee member Andrew Sentance took the spotlight yesterday, and in his speech he stressed the importance of hiking interest rates amidst the rising inflation pressures in the U.K. Recall that for the past few months only Sentence has been the lone hawk among the MPC members, much like how Lemuel Gulliver was the only big bro in the island of Liliput.

Let’s see if the other MPC members were right to hold back from hiking interest rates when the U.K.’s economic reports are released. GDP for the fourth quarter of 2010 is expected to cool to a 0.5% growth from its 0.7% figure in the third quarter, but we’ll have to wait till 9:30 am GMT before the bulls or bears party in the pip streets.

Also scheduled at 9:30 am GMT is the report on public sector borrowing. The data is estimated to drop to 18.2 billion GBP in December, but a higher number might highlight the need for the government’s steep budget cuts.

Last to hit the stage is the BOE Governor Mervyn King himself at 7:40 pm GMT. As the head of the central bank markets usually pay attention to his speeches to gauge the BOE’s sentiments on the economy. Don’t let me catch passing up on this one!