4:00 PM London – The UK indexes edge lower after a sharp decline in commodities. The BoE reports a decline in housing equity and Miles reaffirms his loose monetary policy stance. UK first quarter productivity rises. The IMF notes Ireland needs to strengthen its financial stability network.
U.S. and European markets surge on better-than-expected earnings from JPMorgan. Manufacturing output in Ireland rises 2% in May.
FTSE 100 Index traded lower 49.30 or 0.94% to 5,209.96 and the pound edged higher to close at $1.5389.
The Bank of England said today individuals injected a net £3.2 billion into housing equity in the first quarter, down from the fourth quarter''s revised £3.4 billion injection.
Individuals injected £38.3 billion into housing equity since the second quarter of 2008, according to the BoE.
Housing equity withdrawal as a percentage of post-tax income was also slightly less negative than the previous quarter, at minus 1.3% compared to minus 1.4% in the fourth quarter of 2009.
David Miles, the Bank of England monetary policy committee member stressed the need for loose monetary policy in the current economic climate. His views are different from the other policy committee member Andrew Sentance, who prefers gradual interest rate tightening.
""I look forward to the day when it will be appropriate to tighten monetary policy since a return to more normal levels of interest rates would be a welcome sign that economic conditions were also more normal,"" he said in a speech to the Bristol Business Forum.
The UK''s economic output per worker increased 1.3% year-on-year in the first quarter, reversing from a 0.9% fall seen in the fourth quarter, according to data released by the Office for National Statistics released today. That was the first increase since the first quarter of 2008.
On a sequential basis, output per worker increased 0.6% in the first quarter, lower than the 0.7% growth n the fourth quarter of 2009.
Unit wage costs for the whole economy grew 3.9% annually in the first quarter.
The International Monetary Fund said on Wednesday Ireland needs to strengthen the financial stability framework.
The IMF said the government has implemented a series of consolidation measures to help contain the deficit below 12% in 2010. The authorities'' multi-year plan is intended to achieve a sustainable fiscal position.
According to IMF, the Irish economy is undergoing a profound adjustment to unwind the imbalances created during the boom years. The economy is expected to contract around 0.6% in 2010. Following the crisis, lower investment rates, the fallout of the banking crisis, and higher structural unemployment further dampened the growth potential, the lender noted.
Ireland''s factory gate prices increased in May.
The manufacturing output price index rose 2% year-on-year in May, compared to a 0.4% fall in the previous month, according to data released by the Central Statistics Office today. Prices increased for the first time since July 2009.
On a monthly basis, output prices rose 1.1% in May, faster than a 1% rise in the preceding month.
GlaxoSmithKline Plc confirmed that a joint advisory committee to the U.S. Food and Drug Administration voted to allow the company''s diabetes drug Avandia or rosiglitazone maleate to remain in the market.
Europe Markets Review
FTSE 100 Index traded higher 0.54 or 0.01% to 5,254.06, in Paris CAC 40 Index increased 7.65 or 0.21% to 3,640.63 and in Frankfurt DAX index traded higher 18.70 or 0.30% to 6,228.46. In Zurich trading SMI increased 6.95 or 0.11% to 6,339.23.