German investor confidence fell for the 10th consecutive month in October, a report showed last week. The ZEW Centre for European Economic Research said its index of investor and analyst expectations dropped to -3.6 this month from 6.9 in September. That is the lowest level registered by the index since November 2012.

Separately, the German Economy Ministry reduced its 2014 economic-growth forecast to 1.2 per cent from 1.8 per cent, and its 2015 outlook to 1.3 per cent from two per cent These are the latest signs that the German economy is struggling to find a firm footing even as the European Central Bank tries to stimulate the ailing European economy.

UK inflation fell to a five-year low of 1.2 per cent in September, down from 1.5 per cent reported the previous months. Inflation, as measured by the Consumer Price Index (CPI), was the lowest since September 2009, when it stood at 1.1 per cent. According to the Office for National Statistics, lower energy costs and food prices were the main factors behind the lower rate. The news led many analysts to predict that an interest rate rise is now not likely until well into next year.

The CPI is the rate that the Bank of England targets and it is charged with keeping inflation at about two per cent. The UK economy is the fastest growing in the developed world, something that would normally trigger a rise in interest rates.

US retail sales fell last month for the first time since January with sales falling by 0.3 per cent in September when compared to the previous month, according to a report published by the Commerce Department.

A downturn in consumer spending is the latest domestic worry to mounting global turmoil. The broad-based decline in retail sales came alongside weakening consumer confidence and minimal wage growth that have hampered the recovery of the recent years.

These retail sales figures confirm a choppy pattern that shows many Americans are cautious as we enter the holiday shopping season.

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

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