The eurozone’s inflation rate unexpectedly turned negative in September for the first time in six months as consumer prices in the currency bloc fell by 0.1 per cent from a year earlier.

This preliminary data, released last week by the European statistics office, Eurostat, puts more pressure on the European Central Bank to step up its monetary easing programme to stimulate growth in the region.

Economists predicted an inflation rate of zero. In the meantime, Eurostat also released data that showed that the eurozone unemployment rate remained unchanged at double-digit level in August as businesses generated fewer jobs amid weak economic growth. The unemployment rate held steady at 11 per cent in August. Economists expected unemployment to decline to 10.9 per cent.

In the meantime, British manufacturing activity expanded at the slowest rate in three months in September, survey figures from the Chartered Institute of Procurement & Supply and Markit Economics showed. The report’s factory index slipped to 51.5 from a revised 51.6 in August. Readings above 50 indicate growth. A measure of new orders dropped to match the weakest rate this year. While declining commodity prices are lowering costs for businesses and domestic demand remains robust, a strong currency and cooling Chinese growth are undermining exports. Markit said its index is “broadly consistent with stagnation or even a mild downturn”.

Finally, in the United States, home prices rose in July, underscoring the housing market’s strong performance in the first half of the year, even as more recent reports indicate that momentum has been mixed in recent weeks.

The S&P/Case-Shiller Home Price Index, covering existing single-family homes across the US, rose 4.7 per cent in the 12 months ended in July, exceeding June’s 4.5 per cent increase.

The index of 10 major cities gained 4.5 per cent from a year earlier, roughly the same as in June. The report also said the 20-City Home Price Index was up by five per cent year over year in July, reflecting a modest acceleration from the revised 4.9 per cent growth seen in June.

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

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