The European Central Bank (ECB) kept its interest rates unchanged for a fifth session in a row and maintain­ed its bond-buying stimulus pro­gramme, as it seeks more data on the strength of Europe’s modest economic recovery. The refi-rate was retained at a record low of zero per cent, the deposit rate was kept at -0.40 per cent and the marginal lending facility rate at 0.25 per cent.

The ECB kept its asset-buying, or quantitative easing (QE) pro­gramme at €80 billion per month, reinforcing expectations that the programme will be extended be­yond the end of March 2017. In a statement, the ECB said “the govern­ing council continues to expect the key ECB interest rates to remain at present or lower levels for an exten­ded period of time, and well past the horizon of the net asset purchases”.

The UK unemployment rate held steady at a near 11-year low of 4.9 per cent in the three months to August. The Office for National Statistics (ONS) said that in September there was a “minimal” increase of 10,000 in the number of unemployed people to 1.66 million, while the one-month measure of unemployment rose to five per cent.

ONS figures also showed that the number of people in employment remained at a record high of 31.81 million. ONS statistician Nick Palmer said “employment continued to grow over summer and va­can­cies remain at high levels, suggesting confidence in the economy”.

In the US, a Commerce Depart­ment report last week showed that in September, new residential con­struc­tion in the US fell unexpectedly to its lowest levels in over a year. Housing starts fell nine per cent to an annual rate of 1.047 million units in September following a fall of 5.6 per cent to a revised 1.150 million in August. Economists had projected housing starts to rise to 1.180 million from 1.142 million initially reported in the prior month. The drop resulted from weakening in multi-family home starts that fell by 38 per cent from 426,000 in August to a rate of 264,000 in September.

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

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