In the UK last week a strong inflation report boosted the currency, with the Consumer Prices Index (CPI) rising by 0.1% which is better than forecast and up from 0.0% compared to June. The higher inflation reading caused the pound to strengthen, this raised expectations that the Bank of England would increase the likelihood that interest rates would rise earlier that anticipated. External MCP member Kirstin Forbes warned yesterday that keeping interest rates low for too long risks undermining Britain’s economic recovery, especially if the increase was rapid rather than the gradual path we expect. A Report also out from Markit revealed around half of British households expect the Bank of England to hike interest rates in the next six months. Markit's monthly Household Finance Index showed 48 percent of households predict the BoE will raise interest rates over the next six months, the highest figure since July 2014 and up from 34 percent last month. The housing market also shows no sign of easing up this summer with prices climbing and mortgage lending seeing its strongest month for seven years. City level house prices are seeing their fastest growth for over a decade; property market analysts Hometrack said last week that asking prices had increased 4.3 per cent in the three months to July. The Eurozone trade balance figure came in at a surplus of €21.9b against a €21.3bn consensus, which was the highest reading seen in the last 6-months. This has mostly been down to the recent weakness of the EUR, proving attractive for exporters of EU goods. The month-on-month figure showed a 1.4% increase in exports, and exports from the single currency area to the rest of the world rose 12% to €182.7bn in the year to June. Greece’s Prime minister Tsipras resigned seeking to crush a rebellion in his leftist Syriza party and seal public support for the bailout program, Greece's third since 2010, which he negotiated. Faced with a near collapse of the Greek financial system which threatened the country's future in the euro, Tsipras was forced to accept the creditors' demands for yet more austerity and economic reform - the very policies he had promised to scrap when he was elected in January. But a snap election should allow Tsipras to capitalize on his popularity with voters before the toughest parts of the latest program - including further pension cuts, more value-added tax increases and a "solidarity" tax on incomes - begin to bite. This may allow him to return to power in a stronger position without anti-bailout rebels in Syriza to slow him down. The US housing market index remains at the highest level since November 2005, and has registered above 60 for three straight months cooling US property market concerns. US manufacturing activity in New York State plunged to its weakest level in August since 2009 due to steep drops in new orders and shipments; although optimism on future business improved U.S. manufacturers have been struggling with a variety of headwinds, including weak overseas economies in Europe and China that have cut into exports. The dollar has also risen about 20% in value in the past year, which can also reduce exports by making them more expensive. Cheaper oil, meanwhile, has reduced demand for steel pipe and other drilling equipment. New-home construction in the U.S. rose in July to the highest level in almost eight years, indicating the industry will pick up in the second half of the year. The Commerce Department report in Washington showed that residential starts rose by 0.2% to 1.21 million from 1.2 million in the previous month, the most since 2007. The weekly jobs figure from the US was again strong with the number of Americans filing for unemployment benefits last week remaining historically low. The subdued level of firings has been accompanied by falling unemployment and steady job gains, signs the labour market continues to heal in its seventh year of recovery. Bigger advances in wages will be needed in addition to the strengthened job security to help convince consumers to boost spending, which accounts for 70 percent of the economy. While inflation remains soft, a strengthening economy, marked by a tightening labor market and a firming housing sector, should give the U.S. central bank confidence it will gradually move toward its 2 percent target.