Britain exited recession during the third quarter of this year, during which period its Gross Domestic Product increased by one per cent over the previous three-month period. This reading was more than the 0.6 per cent gain expected by economists and was the fastest growth in five years.
This increase reflects a boost from the Olympics and a rebound from the second quarter when activity was affected by an extra public holiday. From the same quarter the previous year, GDP remained unchanged versus a 0.5 per cent decline predicted by the market.
Meanwhile, in the US, the Federal Open Market Committee statement contained no change to the monetary policy following the recent announcement of the latest round of quantitative easing (QE3).
The Federal Reserve (Fed) reiterated that interest rates are likely to stay close to zero at least until mid-2015. The Fed also said the economy is growing modestly and that unemployment remains elevated.
This was the last FOMC meeting before the US Presidential elections. The next meeting, in December, will be more critical as the Fed will have to decide what to do when Operation Twist ends.
Activity in the eurozone’s manufacturing and services sectors fell more than expected in October, with a composite index, based on a survey of purchasing managers in both services and manufacturing industries, coming in at 45.8 from the 46.1 the previous month.
This is the lowest reading since June 2009 and defied expectations for a rise to 46.4.
The decline that began in the smaller periphery countries of the euro area is now also being felt in Germany and France.
In fact, German business confidence has dropped to its lowest in over 30 months as Europe’s recession deepened. The economy contracted by 0.2 per cent in the second quarter of this year and is expected to have contracted by 0.3 per cent in the three months to September.
This report was compiled by Bank of Valletta plc for general information purposes only.