Figures published last week by Halifax showed a rise in the house price index of 9.2 per cent annually. Analysts had projected a 9.0 per cent rise. Compared to the previous month, the average UK property price increased by 0.6 per cent in May, rebounding from a 0.8 per cent fall in April. Economists had expected a 0.4 per cent increase.

On a quarterly basis, house pri­ces in the three months to May rose by 1.4 per cent. The gain was less than the 1.5 per cent increase in April and the lowest since Novem­ber 2015. “Low interest rates, increasing employ­ment and rising real earnings, continue to support housing demand,” Halifax housing economist Martin Ellis said. “The strength of demand, combined with very low supply, is causing house prices to rise at a brisk pace in quarterly and annual terms.”

Germany’s industrial production bounced back in April, a sign that Europe’s biggest economy is benefiting from a pick-up in investment. The Economics Ministry said that German’s industrial production, adjusted for seasonal swings, rose 0.8 per cent in April from March when it fell from a revised 1.1 per cent rate. According to a Bloomberg News survey, economists had projected a 0.7 per cent rise. “Sentiment among manufacturing companies has brightened somewhat in recent months,” the ministry said in a statement, adding that “manufacturing is expected to continue its moderate recovery after foreign trade-related weakness in the second half of 2015.”

The US Labour Depart­ment re­ported that produc­tivity fell less sharply than pre­viously estim­ated in the first quarter. Labour-related costs surged as businesses re­crui­ted more staff to increase output.

The report said productivity con­tracted at an annualised rate of 0.6 per cent, compared to the 1.0 per cent drop reported in the previous month, which met economists’ estimates. Productivity decreased by 1.7 per cent in the fourth quarter.

In May, the government raised its first quarter economic growth fore­casts from 0.5 per cent reported in April to 0.8 per cent. Productivity has only improved in two of the last six quarters at a 0.7 per cent rate compared to 2015’s first quarter.

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