- Tom Vosa, an economist at National Australia Bank (NAB)
Ahead of the final GDP report, which is likely to surprise markets to the upside, due to upside revisions of both construction and manufacturing output, the cable was trading 37 pips above 1.70-mark.
While domestic economy is on the right track, it seems that Mark Carney is constantly making life harder for himself. The Governor has already whipsawed investors twice during June month on the timing of the central bank's interest rates adjustments. Just a couple of days before his first anniversary investors are already urging the Governor should hone his game. His latest attempt to calm down markets was made last week, when the central bank introduced macroprudential tools to curb the excessive debt being piled-up on consumers amid soaring housing prices. The Financial Stability Report showed the central bank imposed caps on loan-to-income ratio at 4.5 times the income, or greater. Lenders will now have to apply interest rates stress tests in order to evaluate borrowers' ability to afford the mortgage in case the Bank of England raises rates by 3% during next five years. While this action is aimed at cooling housing market, some analysts believe Carney will need a bigger weapon to subdue risks from the booming market. His approach was less aggressive than analysts predicted and with no doubts, will have no immediate impact on mortgage approval and housing prices.
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