Britain’s unemployment, as measured by International Labour Organisation methods, hit a five-year low of 6.9 per cent for the three-month period ending in February. This rate of unemployment is now far below Britain’s European rivals and shows that its economy is picking up momentum one year before the general elections.

According to the Office for National Statistics, the unemployment rate for the period beginning November through January was 7.2 per cent. The report also showed that, during the same period, wage growth accelerated to 1.7 per cent, matching the inflation rate in February.

In the meantime, European Central Bank president Mario Draghi said the central bank will provide “further stimulus” to the eurozone economy if inflation in the 18-nation bloc continues to remain low. Mr Draghi also said a stronger euro would act as a trigger to looser monetary policy.

The recent strength of the euro is one of the main reasons why inflation in the eurozone is at the dangerously low level of 0.5 per cent. One of Mr Draghi’s stimulus options would be a bond-buying programme, known as quantitative easing. Another option hinted by Mr Draghi is negative interest rates, whereby banks will be ‘taxed’ for holding funds with the ECB. The euro has risen six per cent against the dollar and nine per cent against the yen in the past year.

Finally, US retail sales posted their biggest rise in 18 months in March, figures released last week by the Commerce Department show. This is further evidence that the US economy is shrugging off the effects of the third-coldest winter ever recorded, which dented economic activity.

Sales were up by 1.1 per cent last month, the biggest increase since September 2012 and beating analysts’ expectations. Furthermore, sales growth in February was revised up to 0.7 per cent, more than twice the increase initially reported.

The pick-up in sales came too late to boost economic growth in the first quarter but will probably underpin a marked rebound in the April to June quarter.

This article was compiled by Bank of Valletta for general information purposes only.