BOE Governor Andrew Bailey has said that the UK banking system is "resilient" and the main focus for the Bank of England remains tackling high inflation, and that he is not unduly worried about the recent banking issues that Credit Suisse and SVB faced. Mr Bailey said that despite "big strains in parts of the global banking system" he remained confident UK banks were "resilient, with robust capital and liquidity positions, and well placed to support the economy."
The pound rose after the comments particularly against the dollar reaching 1.12353, the highest level since the beginning of February.
The Office for Budget Responsibility (OBR) has stated that impact of Brexit on the UK economy is on the same scale as the Covid pandemic and energy price crisis. Chairman, Richard Hughes also warned that it would take five years before people’s spending power recovers to pre-coronavirus levels.
Economists are forecasting that the chance of the U.S Economy going into recession now stands at 65% compared to 60% in February. The uplift in views is down to the recent steady hikes in interest rates from the U.S Fed and the risk of tighter credit conditions in the banking sector.
Despite this, U.S Consumer confidence rose slightly from 103.4 to 104.2 in March. The rise reflects the recent strength in the Labor market and optimism about the future of the economy.
Eurozone PMI showed signs that the economy is coming back to life as March figures posted a 10 month high. Activity rose for the fifth consecutive month to 54.1 from 52 in February.
The Euro gained ground on Tuesday pushing to 1.0860 against the dollar, up from 1.0750 on Monday and made slight gains against the pound pulling back to 1.1364.
News to watch out for this week includes U.S Q4 GDP figures on Thursday and UK Q4 GDP figures on Friday morning.
