England holds borrowing costs at the record-low and commits GBP 127B in asset purchases .

Mortgage approvals in the U.K. slipped to 52.3K in August from a revised reading of 52.4K in the previous month, which topped expectations for a rise to 51.5K, while secured lending for homes increased GBP 1.0B after falling GBP 0.2B in the previous month. At the same time, consumer credit fell for the second month as households repaid GBP 0.3B in debt, which is the most since April 1993, and the data foreshadows a dour outlook for private-sector spending as individuals face a weakening labor market paired with tightening credit standards. Nevertheless, as the Bank of England holds borrowing costs at the record-low and commits GBP 127B in asset purchases to shore up the ailing economy, the extraordinary efforts taken on by the government should help to stem the downside risks for growth and inflation as policy makers see the nation emerging from the worst recession since the post-war period.
A wild session of trade overnight with the slew of economic releases out of the UK appropriately resulting in an equal amount of volatility in Sterling. The initial data releases at 8:30GMT were tempered, with Q2 GDP coming in as expected, and mortgage approvals slightly exceeding analyst forecasts. However, the later release of CBI retail sales which shocked to the upside after coming in at +3 versus an expectation for a -14 print, sent the single currency off to the races, with notable losses highlighted in Eur/Gbp as a result. Eurozone economic sentiment data was also firmer, but failed to materially factor in price action, with the Euro weighed down by some USD supportive comments, and a reduction is risk appetite as reflected by lower US equity futures. Elsewhere, data in other regions was not promising with the Swiss UBS consumption indicator showing weakness, while retail sales out from Sweden were also surprisingly much weaker than consensus. Finally, the Russian rate cut today has also left a sour taste in many investor mouths, forcing a liquidation of some of their higher yielding and risky investments. In fact, news out that the Russian central bank would be looking to add Aussie and Cad to their reserves triggered a violent intraday swing in the Aussie and Cad crosses. Looking ahead, US Case Shiller (-14.25% expected) is due at 13:00GMT, followed by consumer confidence (57.0 expected) at 14:00GMT. On the official circuit, Fed Plosser is slated to speak at 23:00GMT.