In the US, purchases of previously owned houses dropped 1.8 per cent month on month in August with the share of properties sold to investors being the lowest in almost five years. Transactions at the lower end of the market are suffering as the potential for higher interest rates makes housing less appealing for investment purposes.

In the meantime new home sales surged in August to the highest level in more than six years, in a sign that the demand for such homes is making progress. Purchases of new houses jumped 18 per cent to an annualised pace of over half a million, the strongest since May 2008 and surpassing the highest forecast. The monthly increase was the biggest since January 1992.

Euro area manufacturing and services growth unexpectedly slowed to the weakest pace this year, increasing pressure on European Central Bank president Mario Draghi to increase stimulus to the economy.

Draghi pledged that ECB officials will become more active in their fight to restore growth, saying the recovery is losing pace and risks are “clearly” to the downside.

Eurozone expansion halted in the second quarter as its three biggest economies failed to register any growth and inflation slowed to the lowest level in almost five years.

Last week was characterised by crucial economic surveys for the month of September.

The purchasing managers’ indices for the euro area came in line with the modest expectations while the manufacturing index and the service sector recorded another slight drop.

Across the Atlantic, the Markit manufacturing survey again confirmed the very robust dynamics of the US economy with the sentiment indicator remains unchanged.

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