Britain’s energy prices have been a hot topic over the past month, political parties attempting to use energy prices as a political weapon, forced providers such as Npower and British Gas to raise prices by up to 11%. The recent deal between EDF and a Chinese consortium to build the first nuclear power plant for a ‘generation’ provided a glimmer of hope to household’s annual spend. Energy Secretary Ed Davey announced this would help counteract planned price raises and could reduce household energy bills by up to £77 a year. Last night however Mr Davey backtracked somewhat stating “I can’t guarantee that” taking away from the credibility of his statement. Although this is unlikely to be the end of the energy rollercoaster the deal does provide other potential positives, such as signalling that the UK is a viable investment option for China, further investment should follow providing a boost to the economy and further strengthening inter-country relationships.
In a theme that seems to have captured the UK with recent news announcing house prices rose 10% last month, the Bundesbank has announced that house prices in the largest cities in Germany could be overvalued by up to 20%. Concerns over this potential bubble have brought criticism on the ECB’s fiscal policy for the country, seen as too loose. With refinancing rates at 0.5%, a record low, is encouraging international investors which is further inflating the bubble.
Non-Farm employment change results will be released today at 1.30pm, delayed 18 days due to government shutdown, investors tentatively wait for the first major economic data since the government shutdown.