UK Public Sector Net Borrowing showed an improvement in May reporting a deficit of £8.8 billion. This was significantly lower than the expected £12.6bn shortfall and way better than the £15.6bn figure posted in May 2012. However, this figure was improved by a one off repatriation of £3.2bn from Switzerland following a deal on tax avoidance and an additional coupon from the Bank of England’s QE bond holdings added a further £3.9bn.

Last week saw global financial markets drop sharply after Ben Bernanke talked of cutting the pace of QE provided the economy continues to improve. This prompted St. Louis Federal Reserve Bank President, James Bullard, to issue a statement criticising the decision adding neither the central bank's own economic growth forecasts nor its expectations for continued weak inflation supported a decision to taper back the $85 billion a month programme.

The Eurozone and IMF finance officials said Greece is assured of its next aid payment as long as it presses ahead with an economic overhaul programme reporting that austerity remains a condition for continued payments. The assurances came amid further political fallout resulting from the Greek government’s decision to shut down public broadcaster ERT and suspend 2,600 jobs. A condition of the bailout is Greece has to reduce the number of workers on the state payroll by 15,000 by the end of 2014.

The US dollar made gains against both Sterling and the Euro. GBP/USD trading around $1.5350, EUR/USD fell around 1.3100 and GBP/EUR now trading at the 1.1730.