Europe’s second largest bank, UniCredit has warned investors that Britain is at serious risk of a bond market and sterling debacle and could face more budget difficulties than Greece. The bank said that Britain’s tax structure will make it difficult to raise new revenue quickly enough to restore confidence in the UK. Yesterday, it was revealed that the US trade deficit narrowed in January, showing that America’s economic recovery could be slowing, which has been partly caused by a slump in demand for overseas oil. During the month the deficit shrank to $37.3bn (£24.8bn). According to official data published yesterday, in China consumer inflation has risen to a 16-month high. In Feb the annual consumer price inflation rose to 2.7% compared to the previous month’s 1.5%.

Due for release today is the CAD Unemployment Change, CAD Employment Change, USD Core Retail Sales m/m and the USD Prelim UoM Consumer Sentiment.

By Greg Secker