Weekly News Bites - When Will Interest Rates Rise?
10th July 2017
The Bank of England is Warning Companies who Offer Finance Deals to Make Sure That Any Loan Takes Account of Affordability. The bank is concerned about the rising amount of debt that consumers are taking on to by new vehicles; British motorists currently owe £58bn on the cars they drive. There are concerns that if too many default on those loans another debt crisis could follow.
Equity Markets in the UK Finished Lower for the Final Week of the First Half of the Year. Hawkish comments from the European Central Bank President Mario Draghi, Bank of England Chief Economist Any Haldane and Governor Mark Carney regarding their views on inflation, interest rate rises as well as minutes for the Federal Open Market Committee last week all point towards the withdrawal of fiscal stimulus.
The Widespread Sell-Off of Fixed Interest Bonds Slowed. Despite this both US Treasuries and European bonds moved down between 1% and 3%.
The Office for National Statistics (ONS) Reported a Fall in Growth and Falling Household Income. UK GDP grew 0.2% in the first quarter of this year, down from 0.7% growth at the end of last year. The ONS reported household income is falling at the steepest rate since 2011, down 2% in the first quarter of this year. The primary cause touted was the rise in inflation.
Manufacturing Activity in the UK Dropped to a Three Month Low in June. This is in contrast with Europe which rose to a six-year high. Brexit negotiations entered the limelight again as the UK hopes to continue to work with Europe on medicine testing. Not only is this in the interest of patient safety, as fears mount over potential delays to testing pipelines and licensing, but there is also concern over the future research and investment in the industry.
Tesla’s High-Volume Model 3 passed all regulatory requirements for production. Musk said in May that Tesla was on track to begin production in July and expected to produce over 5,000 Model 3’s a week by the end of this year.
Volvo’s Chinese Owner has Announced that all Models Launched After 2019 Will Be Electric or Hybrid. The announcement makes that Swedish carmaker the first mainstream auto company to set a date for ending production of vehicles powered solely by an internal-combustion engine. China si the world’s largest manufacturer and distributor of electric vehicles; the Chinese government provides subsidies to the domestic electric carmakers.