In his speech at the European Central Bank Watchers Conference in Frankfurt on Wednesday, ECB president Mario Draghi said the stimulus measures adopted by the bank since January will stabilise inflation in line with its target and that the measures are working their way into the real economy.
The ECB, in conjunction with the eurozone countries’ national central banks, last week began purchasing eurozone sovereign bonds under its massive $1.1 trillion quantitative easing programme announced last January, through which it will buy €60 billion worth of bonds every month until September 2016, or until inflation moves in line with the ECB’s aim of “below, but close to two per cent”.
Meanwhile, in the UK, industrial output fell by 0.1 per cent in January compared with December, the Office for National Statistics (ONS) said last week. Economists were expecting output to rise by 0.2 per cent, according to a Reuters survey.
Moreover, the ONS said manufacturing output slid 0.5 per cent in January from December. The biggest decline came from the computer, electronic and optical sector, in which output plummeted by 9.5 per cent. The December manufacturing figure was skewed to the upside by a one-off public sector defence contract, an ONS official said.
Over the three months to January, manufacturing increased by 0.4 per cent compared with the previous three months. Britain’s economy grew by 2.6 per cent in 2014, the fastest growth rate of the developed economies. However, the economy lost some steam towards the end of the year when GDP rose by 0.5 per cent.
Lastly, in the US, retail sales unexpectedly dropped 0.6 per cent in February, a third consecutive monthly decline, according to figures published last week by the Commerce Department. The severe cold that affected parts of the US in February dampened retail sales, as the world’s largest economy began the year on weak footing.
Separately, the Labour Department’s February employment report, issued on March 6, indicated the US jobs machine powering on. Employers added 295,000 jobs, exceeding expectations, while the unemployment rate fell to an almost seven-year low of 5.5 per cent.
This report was compiled by Bank of Valletta plc for general information purposes only.