The minutes of last month’s Federal Open Market Committee meeting showed that several members were of the view that the economic data and outlook were likely to warrant that the Federal Reserve (Fed) sets off the process of raising rates as early as June this year. But other participants opined that that Fed should wait to raise interest rates later in the year so that it could assess the effects lower energy prices and the dollar’s appreciation have on inflation.

The Fed noted that “a couple” of participants suggested that the economic outlook may not call for “lift-off” (i.e. the first rate rise since the financial crisis) until 2016. Meanwhile, almost all participants noted potential risks to the economic outlook resulting from foreign economic and financial developments.

Against the backdrop of last week’s disappointing March payrolls report, markets will be looking at speeches from Fed presidents for hints on the Fed’s current thinking.

Separately, in the last monetary meeting before the UK general elections on May 7, the Bank of England kept its key interest rate unchanged at a historic low, as widely expected, amid fears that the threat of deflation looms. The Monetary Policy Committee (MPC), chaired by Governor Mark Carney, decided to keep its benchmark rate unchanged at 0.5 per cent, that is, the same level as it has been since March 2009.

The MPC also decided to retain its quantitative easing programme at the current level of £375 billion. The programme was first introduced at the March 2009 meeting.

Lastly, eurozone business activity surged in March as the services Purchasing Managers’ Index (PMI) rose to 54.2 from 53.7 in February. In the meantime, the composite PMI (i.e. manufacturing and services) powered to 54, an 11-month high, from 53.3.

The private sector in Germany, Europe’s largest economy, grew at its fastest rate in eight months while Italy’s service industry returned to growth, fuelling hopes of an economic recovery there after years of on-off recession. In the meantime, Spain expanded at its fastest pace since August.

The survey provided some welcome news for the European Central Bank just weeks after it embarked on a trillion-euro asset-purchase programme.

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