httpvh://www.youtube.com/watch?v=C_25R5PcNYI

The cost of UK clothing is meant to rise this year by 4.4%, which is the highest level since 1986. This is due to Britain’s borrowing issues and labour unrest in China. UK spending on aid projects in Afghanistan is set to rise by 40% as the government announced on Sunday that it would prioritise Afghanistan to ensure that troops can begin leaving the country by 2015. As Cameron prepares for a trip to Washington he has said that he with support BP for the sake of the economy and shareholders in the UK, as the group have continued to stop the leaking since Friday.

China supported euro with a vote of confidence on Friday when Premier Wen Jiabao said that Europe would always be one of the main investment markets for China’s foreign exchange. He also said that ‘Europe will certainly overcome its difficulties’. These comments come after China bought several hundred million dollars worth of Spanish bonds, which was a sign that Asian investors are returning to eurozone markets after two months of absence. One of the top economic experts in Merkel’s party has said that Germany will not introduce any tax on financial transactions without international agreement, this comes from fears of excessive German financial regulation after the ban on short selling was deemed ‘not helpful’.

The IMF wants finance agreed in advance and specially designed to individual countries to calm market nerves, it announced that it is also planning on boosting its lending resources to $1000 billion up from $750 billion.

Consumer Confidence in the US fell to its lowest level almost a year in July from 76 in June to 66.5, this was much bigger than expected and eradicated any sentiment gains over the past year. Not even the lowered energy prices or the cost of food remaining flat for the second month could boost the consumer confidence. This is due to the majority of Americans who believe that the economic situation is the same as or worse than it was last year, when the US was still in recession. Goldman Sachs agreed last Thursday to pay a €550million fine to settle the accusations over fraud, although they did not admit or deny charges the fine will resolve all SEC accusations. Although it is the largest ever levied against a Wall street bank, it only account for a week’s worth of trading revenue for the bank.

Today is very quiet on the data front, with the EMU Construction Output and Current Account being followed by the US Housing Market Index later this afternoon, neither of which should cause much market movement.