King positive over economy

With regards to the banking system
following the crisis where the tax payer had to bailout Britain’s
banks he admitted this would still be the case for any future
bailout but for a shorter period of time. “I think temporarily the
taxpayer would have to provide finance [if a big bank went bust]
but we would be able to get control of the bank very quickly as we
have a system that wasn’t in place when Northern Rock went
bust.”

He went on to discuss a recent
report Sir John Vickers which suggested banks cut their dependence
on borrowed money alongside a division of High Street and the
investment side, provided good solutions but had been watered
down.  “What we have to do is straightforward, we have to
change way banks finance themselves. “They don’t get money from
shareholders in the same way as businesses do, they fund themselves
by borrowings. It is important we impose limits on how much banks
can fund themselves through such borrowings.”

So far this morning we have seen UK
public sector borrowing figures announced as £14.4bn in August
according to the Office for National Statistics.  Sterling has
rallied following the announcement and cable is now trading above
1.63 which is the highest since September last year. EUR/USD is
back above 1.30 at 1.3040 after being as low as 1.2955 earlier in
the session.

Over to the US and growth in
manufacturing remained “modest” during September, according to the
Markit Flash US Manufacturing Purchasing Managers’ Index (PMI)
which was unchanged from August’s figure of 51.5. Although
manufacturing output continued to rise, “growth was only marginal
and the weakest for three years”, according to Markit.  Input
price inflation touched a four-month high, but there was a slight
increase in employment.  New domestic orders continued to
rise, but the number of export orders experienced its sharpest fall
since October 2011.The index score for new export orders was 47.9,
down from 48.8 in August, reflecting poor economic data from China
and the Eurozone.

As for the rest of the day it’s a
quiet end with just Canadian inflation figures this afternoon where
the number is expected to be 1.6% down from 1.7% last month.