BOE & ECB Rate; Initial Claims; Iceland Raising Rates

BOE & ECB Rate Announcements

ECB steady at 4%: "Advertised" consumer prices in the euro region rose 3.5% in March from a year earlier, the biggest increase since June 1992.

ECB Head Jean Claude Tricky Trichet: "We are experiencing a rather protracted period of temporarily high annual rates of inflation."

BOE cut 25 bps to 5%, 3rd cut since Dec., Former Chancellor of the Exchequer Nigel Lawson:

"We are probably facing a recession of some sort in the western world. Not a severe recession,

but in the U.S. and U.K. one that might be quite prolonged
."

Britain is headed for a "prolonged" recession as the seizure in credit markets prompts banks

to choke off the cheap loans that fueled a decade-long boom in consumer spending.

The Bank of England: "Credit conditions have tightened and the availability of credit appears to be worsening"

Electronic outage... DSG International, the biggest U.K. consumer electronics retailer, said today earnings

may drop 32% this year amid "challenging" business conditions.

Raising rates to contain inflation..

Iceland's central bank today unexpectedly raised its benchmark rate to a record 15.5% to shore up the krona and damp inflation that is running at three times the target.

Initial Claims 04/05 -53K at 357K vs prior 410K Full Report

Inside the number: prior revised up 3K. Seasonally adjusted: 4 week MA +2.5K at 378.25K. Continuing unemployment +3K at 2.940M; 4 week MA +36.5K at 2.8985M.

Unadjusted initial claims +13K. See states with +1K increase for the broad based bleed from housing into other sectors.

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