The Consumer Price Index remained unchanged for the month of May at 4.5%, however it is expected that inflation could spike up in August as the increase in domestic fuel bills take effect.
The UK housing market remains under pressure with the government’s own house price survey showing that prices fell by 1.1% in April.
UK unemployment fell to 7.7% from 7.9% in the previous quarter, the biggest drop since the summer of 2000 according to the data released from the Office for National Statistics.
China’s inflation hit the highest level in 34 months even with the government trying to curb rising prices. Food prices have continued to be the biggest factor at 11.7% Xu Biao of China Merchants Bank said “For now, it seems certain that China’s CPI will hit 6% in June.”
The US Federal Reserve chairman Ben Bernanke warned that the country’s coveted AAA credit rating would be at risk if the borrowing limit increase was not approved by congress. It is so severe that should an agreement not be reached by August the USA may start to default on its obligations.
Following the downgrading of Greece’s credit rating to the lowest possible of any country (CCC), Moody’s have said that they may also downgrade the French Banks Credit Agricole, BNP Paribas and Societe Generale because of their exposure to the Greek debt.