After the market turmoil in the credit markets all the european stock exchange opened with a -sign, and most financial institution are losing percentages points. The US subprime crisis in fact frightened also European investors and had bad consequences in the Asian market, from which several investors are fleeding. Also the UK hasn’t been left untouched by the financial hurricane, but at least it can report some good news. In fact, as the FT reports, the UK inflation dropped 0.5 in June from 2.4% to 1.9% surprising the investors who were expecting a modest drop to 2.3%. This was a consequence of a sharp monthly decline of the price of food an furniture. Even if Economists argue the falls were likely to be temporary The Bank of England’s monetary comittee voted 9-0 to keep interest rates at 5.75% earlier this month, relieving from the fear of the 0.25% expected rise. Nevertheless the City still believes the cost of borrowing will hit 6 per cent by the end of the year, and any change to that view would depend on softer economic data over the coming months.

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