Eurozone inflation failed to accelerate in August, adding to signs that the region’s economic outlook did not improve before a European Central Bank (ECB) meeting next week.

Consumer price inflation in the region was stuck at 0.2 per cent in August, leaving the central bank no closer to its inflation target than when it launched the first of a series of stimulus measures more than two years ago. The medium estimate by economists was for an increase of 0.3 per cent.

Other data released by Eurostat showed that in July the bloc’s unemployment rate was unchanged at a five-year low of 10.1 per cent, more than double the unemployment rate in the US. The figures could push the ECB to launch additional stimulus measures at its next policy meeting on September 8.

In the meantime, the Markit/CIPS factory purchasing managers’ index (PMI) for the UK rose to 53.3 in August from July’s figure of 48.3. The reading was expected to rise to 49. A figure above 50 indicates expansion. The month-on-month increase in the PMI reading was the joint-largest in its almost 25-year survey history.

The weakening of the British currency following the Brexit vote supported exports, the survey found. However, it also indicated that the weak pound had underpinned firms’ costs. A weakening of the pound makes UK goods cheaper for overseas buyers, but increases the cost of goods imported into the country. Since the Brexit referendum, the British currency has fallen in value by more than 10 per cent against both the US dollar and the euro.

Finally in the US, consumer confidence hit an 11-month high in August, after reporting a marginal decline in the prior month, the Conference Board research group reported. The board said that its consumer confidence index jumped to 101.1 in August from a downwardly revised 96.7 in July.The figures match other strong data on consumer spending, residential construction, durable-goods orders and industrial production, strengthening the case for an interest-rate rise later this year.

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