In the UK, GDP growth during the first quarter of this year came in at 0.3 per cent according to the Office for National Statistics. Economists surveyed by Bloomberg News expected growth of 0.1 per cent. During the same period last year, GDP had risen by 0.6 per cent.

The latest figures suggest that the UK has avoided a triple-dip recession. This will be a relief to the British Government, which has been criticised for its austerity programme and for failing to create the necessary condition to support a recovery.

It also reduces pressure on the Bank of England to increase its quantitative easing programme.

In the meantime, credit rating agency Fitch Ratings cut the UK’s credit rating from the coveted triple A to AA+, citing weak economic performance and high public debt. Fitch’s downgrade follows a similar move by Moody’s in February.

The eurozone’s services and factory output, as compiled by Markit Economics, contracted for a 15th consecutive month in April, as a sharp drop in German business activity overweighed an easing downturn in France.

The Purchasing Managers’ Index (PMI), which covers both the manufacturing and the services sectors, held at 46.5 for the month, in line with a survey by Bloomberg News. Any reading below 50 signifies contraction.

This indicates that the currency bloc is struggling to emerge from recession and adds to momentum on the European Central Bank (ECB) to cut rates in its meeting next week to underpin growth.

Finally, in the US, March sales of new homes rose, indicating that the real estate market is gathering momentum and is putting the economy on a firmer footing.

According to the Commerce Department, purchases of single-family homes notched 1.5 per cent in March to an annual rate of 417,000 units. The median estimate of economists polled by Bloomberg News forecasted March sales to rise to an annual rate of 416,000. Near record-low mortgage rates helped the housing industry achieve the strongest quarter since 2008.

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

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