German economic growth accelerated in the fourth quarter of 2014 as it grew by 0.7 per cent compared with the third quarter, official data shows.
The growth figure, reported by the Federal Statistical Office, contrasted with a meagre increase of 0.1 per cent in the third quarter and a decline of 0.1 per cent in the second quarter. It was also much better than the 0.3 per cent rise economists had expected.
For 2014 as a whole, the German economy grew by 1.6 per cent compared with 2013; this was better than an initial estimate of 1.5 per cent.
Meanwhile, in its inflation report published last week, the Bank of England (BoE) said it expects inflation to breach its two per cent target in three years’ time, even though it may turn negative in the near term due to the fall in energy prices.
The bank expressed readiness to take whatever action needed to ensure that core inflation returns to the two per cent target in a timely fashion. Any interest rate hikes would still be more gradual and limited, it said.
The BoE expects the strong rate of growth seen in the UK in 2014 to be sustained in the near term. Gross domestic product is estimated to rise by 2.9 per cent in 2015 and 2016. For 2017, the bank estimates 2.7 per cent expansion.
Finally, the US non-farm jobs market expanded more than anticipated in January, although there was an uptick in the unemployment rate. According to the Labour Department, non-farm payroll employment rose by 257,000 jobs in January compared to economists’ average forecast for an increase of 230,000 jobs.
Revisions on the November and December data showed employment jumping by 423,000 jobs and 329,000 jobs, respectively. Nonetheless, the unemployment rate crept up to 5.7 per cent in January from 5.6 per cent in December.
This had been expected to remain unchanged from December, when it was at its lowest level since June of 2008. However, the unexpected increase in the unemployment rate reflected a substantial increase in the size of the labour force, which surged up by 1.05 million people, implying that Americans feel that their prospects of finding a job has improved.
This report was compiled by Bank of Valletta plc for general information purposes only.