Closing post
Time to wrap up….
US consumer confidence has taken a drop this month, as Americans worry about the health of their jobs market.
The Bank of England governor has predicted that UK interest rates will fall gradually, after the BoE left them on hold last week.
This helped push the pound up to a new two-and-a-half-year high, at $1.3398 against the US dollar.
Global stock markets have hit record highs, after China’s central bank announced a new stimulus package – although economists question whether it will revive the economy.
Anxiety over French political stability pushed France’s borrowing costs over Spain’s briefly today.
Business pessimism is on the rise in Germany.
Updated
The drop in US consumer confidence this month (see earlier post) suggests households are noticing the jobs market is cooling quickly.
James Knightley, chief international economist at ING, explains:
Historically this has been a major warning signal that unemployment is going to rise. This report suggests a breach of 5% is possible before year-end, which would undoubtedly raise the odds of a second 50bp Fed rate cut
