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BoE hints at interest rate cuts

Bank of England Governor says interest rates likely to be cut by this summer

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Following the Brexit verdict and UK’s decision to leave the EU, the Bank of England Governor Mark Carney expressed confidence that the UK would find its footing. He however cautioned that the central bank was likely to cut interest rates by summer. He said that the policy committee members would be assessing the impact of Brexit in July and expects to release a full report by the August meeting including inflation and GDP forecasts. Carney said that besides rate cuts, the BoE could also look into additional policy tools, hinting that the central bank could look into restarting its asset purchase program.

Japan's industrial production falls in May


Industrial production in Japan fell 2.30% n May on a seasonally adjusted basis, according to data from the Ministry of Economy, Trade and Industry in its preliminary estimates. The 2.30% decline in May was below the forecasts which estimated a 0.20% decline. In April, Japan's industrial production increased 0.50%. On a year over year basis, industrial production was down 0.10% on the month below estimates of a 1.90% gain following April's 3.30% year over year declines. The METI said that industrial production was fluctuating indecisively. Chemicals, general purpose, production and business machinery and electronic parts contributed to the industrial production growth. Analysts estimate that industrial production is expected to rise 1.70% in June and 1.30% in July.

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French consumer price index rises in June


Preliminary data from French statistics office Insee, on Thursday showed that consumer price index or CPI in France grew at a pace of 0.20% on the year in June. The increase in June's preliminary inflation reading comes following a smaller than expected declines in energy prices. On a month over month basis, French consumer prices rose 0.10% in June from May and it was lower than forecast of 0.20%. French producer price index data was also released which showed a rebound in producer prices, which jumped 0.30% in May from April. The rebound follows April's 0.40% declines. Compared to a year ago, French PPI is down 3.50%.

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UK GDP remains steady at 0.40% q/q


The final revised estimates of the first quarter GDP growth in the UK confirmed that the economy expanded at a pace of 0.40% on a quarter over quarter basis. UK's economy expanded 2.0% compared to the same quarter a year ago, data from the Office for National Statistics showed on Thursday. Growth was however slower than expected and below the 0.60% average GDP growth rate. Business investment in the UK was 0.60%, lower than the previous quarter's 0.80% increase on an annual basis. The revised current account showed a deficit of 32.6 billion GBP compared to forecasts of 28 billion in the first quarter. The fourth quarter's current account also widened from 32.7 billion to 34 billion.

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Canadian GDP rises 0.10% in April


The Canadian economy expanded 0.10% in April, after a contraction of 0.10% in March, to 1.66 trillion Canadian dollars, data from Statistics Canada showed on Thursday. The economy expanded with a broad strength in manufacturing and utilities which managed to temper declines in non-conventional oil extraction. On a year over year basis, Canada's GDP was up 1.50% in April, higher than an upward revised 1.20% in March. In a separate report, Canada's producer prices index also increased strongly. The raw materials price index surged 6.70% beating estimates of 5.0% and rising from 0.70% in April. Industrial prices also increased, rising 1.10% during the reported month.

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