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CNN Live At Daybreak

Bank of England Not Expected to Raise Rates

Aired August 01, 2002 - 05:18   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: The Bank of England meets today to set interest rates. Will that have an effect on stocks, you ask?

For that and a check of the European stocks, we turn our attention to Todd Benjamin in London -- good morning, Todd.

TODD BENJAMIN, CNN CORRESPONDENT: Good morning, Carol.

Not only do we have the Bank of England meeting today, but we have the European Central Bank. That's the equivalent of the Fed here in Europe. And both central banks, the European Central Bank and the Bank of England, no one's expecting that they will raise interest rates. The thinking now is it could be several months before the Bank of England moves and could even be some time next year before the European Central Bank moves.

We're getting a lot of economic data here in Europe that is not encouraging. Business confidence in big, big countries like Germany, the biggest economy in Europe, has fallen for the past two months. It's fallen in France, another big country, the past two months. It's fallen in Italy. It's fallen in Belgium.

We just got consumer confidence numbers out of France today and they are the worst they've been for three months. Unemployment has risen to a 20 month high there.

So a lot of uncertainties about the consumer. The latest retail sales out of Germany also showing a decline.

Nevertheless, the markets in general are up today, with the exception of the British market, which is down about a half percent. But the DAX in Frankfurt is up one percent and in Paris and in Zurich, those two big markets, they're both up about a half of one percent.

Of course, the Dow yesterday had been down most of the day then ended up on an up note, up about a half percent. That may have helped these markets slightly.

Also, some banks in focus today like Deutsche Bank in Germany following its latest results. And that stock is rising sharply. So that's helping to underpin the German market.

All we can say here, Carol, is thank goodness July is over. It was just a dismal, dismal month for markets here in Europe and the U.S.

Let me just tell you what happened to the U.S. You know, the benchmark indexes in the U.S., the Dow, for instance, the S&P, they completed their fourth consecutive losing month. The Dow hasn't fallen for four straight months since 1982. That's going way back. And in July, the Dow slid five and a half percent. The S&P dropped nearly eight percent and the Nasdaq lost nine percent. So let's hope that August is a better month. But the economic statistics we got out yesterday aren't real promising -- back to you.

COSTELLO: Oh, thanks for depressing us this morning. I know you can't help it.

Thank you, Todd Benjamin.

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