Federal Reserve policymakers said at their last meeting that the central bank may raise interest rates “fairly soon” and “potentially at an upcoming meeting”, if the economy continued to improve as expected. The Fed said that some officials want the bank to increase interest rates gradually due to uncertainties surrounding the new Trump administration.

However, a number of Fed members remained cautious “in anticipation of policy proposals that might not be enacted, or that, if enacted might turn out to have different consequences for economic activity and inflation than currently anticipated”.

The Federal Open Market Committee said that maintaining low interest rates could drive unemployment down to an unsustainable level and lead to more inflation.

In the meantime, according to data released by IHS Markit, the rate of the Eurozone economic growth improved significantly to hit a near six-year high in February. Inflation rose from 1.1 per cent in December to 1.8 per cent in January.

A similar reading was last seen in February 2013 and a higher figure was last registered in January of that year. The inflation figure was below but close to the 2 per cent European Central Bank inflation target.

Separately, according to the preliminary ‘flash’ estimate, the Markit Eurozone manufacturing Purchasing Mangers’ Index (PMI) registered 56.0 in February up from 54.4 in January. The latest reading was the highest since April 2011.

In the UK, a second estimate published by the Office for National Statistics showed that the UK’s gross domestic product grew more than initially expected in the fourth quarter of 2016. The overall growth for the year was less than originally forecast due to weak stock-building.

GDP grew by 0.7 per cent on a quarterly basis in the three months to the end of December and above the previous estimate of 0.6 per cent. UK GDP has grown in 16 consecutive quarters and the strongest growth since the fourth quarter of 2015.

GDP growth for 2016 was revised down from 2 per cent to 1.8 per cent from the preliminary estimates. This figure was also lower than the 2.2 per cent GDP growth seen in 2015.

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