UK Deficit Propped by Investment Returns, Mortgage Approvals Down
THE TAKEAWAY: UK current account deficit closes -> Mortgage approval drop -> Market reaction muted as focus remains elsewhere
According to data released today from the UK’S Office for National Statistics, Britian’s account deficit (Q2) is now at its narrowest point in three years. The deficit closed to -2.0 billion Pounds against a projected -9.0 billion Pounds as investments from abroad showed strong returns. The deficit figure was bolstered by a modification to last month’s number, which was increased to -4.1 billion Pounds. The deficit was -0.5% of Britian GDP, the least since the third quarter of 1998.
Meanwhile, net mortgage approvals fell to 33,130 in September against August’s 35,069, weak news amid a recent trend of more positive housing data, although the figure was 7.7% higher when compared to last year’s.
Market reaction to the data was limited as players focused on the impending EU summit to resolve the debt crisis. Cable appears to be continuing it bullish trend against the Dollar after reaching a low in mid September, and risk appetite remains strengthened amid bailout optimism.
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