UK price pressures continued to build in supply chains after sterling’s fall, a report by the Bank of England showed last week. So far, the fall in in the value of sterling has impacted the prices of food and fuel. The bank expects this to affect a wider range of goods prices during the year, causing inflation to rise further.

The report also showed that employ­ment plans are set to change little in the next six months. Con­sumer spend­ing growth was resilient but was expected to ease during the year as prices rose, the report revealed. On the other hand, the housing market is forecast to remain sluggish over the coming year.

In the meantime, Germany’s industrial production unexpectedly declined in December at the fastest rate since 2009 on widespread weakness across sectors. Figures published by Destatis last week showed that German industrial output fell three per cent from November, when it grew by a revised 0.5 per cent. This was the largest decline since January 2009, when output fell by 6.9 per cent. Economists had forecast a 0.3 per cent rise for December. On a yearly basis, industrial production fell by 0.7 per cent, compared to November’s 2.3 per cent increase.

The ministry confirmed economists’ assumptions that the decline was largely due to less workdays during the Christmas season and said that the data do not alter the government’s positive economic outlook.

In US, mortgage applications rose by 2.3 per cent from the week earlier, according to data from the Mortgage Bankers Association’s weekly mort­gage applications survey for the week ending February 3. This after the number of applications fell in the previous week. The refinance index increased two per cent from the previous week, as the seasonally adjusted purchase index increased by two per cent from a week earlier.

The refinance share of mortgage applications fell to 47.9 per cent of total applications, its lowest level since June 2009. The adjustable-rate mortgage share of activity increased to 6.9 per cent of total applications.

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

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