Macro Horizons: Spain, U.K. Data Highlight Continued European Rebound
By relaxing its fiscal austerity drive, Spain put itself on the road to recovery. Consumption picked up, as shown by car registrations data, while unemployment has started to shrink. Deflation is still a worry, as consumer prices barely stay in positive territory in annual terms. On the other hand, spreads on Spanish debt yields continue to shrink relative to their German benchmark, with the yield of the 10-year government bond getting below 4% Thursday for the first time in more than three years.
U:K. November mortgage approvals were their strongest since the start of 2008 while December U.K. house prices clocked their biggest monthly gains since August 2009 and their biggest annual increases since the summer of 2010 during what’s normally a slow season. It seems U.K. policymakers are once again chasing property bubbles in order to sustain economic growth. It’ll be interesting to see whether the outcome is any better this time than it was in 2008.
Source: WSJ
