Pressure mounting on ECB to solve Eurozone debt problems

If there is one lesson that the markets ought to have taught the authorities regarding crises, it's that piecemeal solutions don't work. Take the sub-prime mortgage crisis in the US, which only started to get better when the US authorities stepped in to recapitalise the system en masse.

Herein lies the dilemma for the Eurozone which is trying to suggest that bailouts may not be needed on a more widespread basis for the likes of Spain, Belgium and Italy and they may have a point, but the mere suggestion of difficulties in Portugal and Spain sends capital markets into another tailspin on the belief that different economies may be treated differently.

A credible system of bailout rules would alleviate the discomfort and the European Central Bank's meeting this week would be a good place to start trying to shore up confidence in the system. Without this the markets are likely to continue their attacks unabated and the Euro suffer.

Yesterday's news from London for the UK was better than expected, but can't be described as good. The Office for Budget Responsibility revised down their forecasts for public sector job losses, in light of the Comprehensive Spending Review's changes to welfare payments.

However, the creation of credit (secured or unsecured) remains lacklustre, which still suggests there is more work to do in terms of supporting a stronger private sector recovery. This is emphasised by consumer confidence falling to -21 in November from -19 in October which disappointed versus forecast.

On the economic calendar, Eurozone figures on consumer prices and unemployment dominate the morning agenda as there is no UK data of note today. US data releases pick up after the holiday weekend with October house prices, the Chicago PMI and the Conference Board's November measure of consumer confidence.