The US government went into its first partial shutdown in 17 years. The closure came after a deadlock in negotiations between the House of Representatives and the Senate that resulted in Congress failing to pass a Budget to fund the federal government. An exasperated President Barack Obama said there will be no discussion of Republican demands over a federal-funding Bill as long as the government stays closed.

“Negotiations now would lead to more demands... I have bent over backwards to deal with the Republican party,” Obama said. It is estimated that the shutdown will cost the country about $300 million (€221m) per day, but this is a drop in the ocean for a $15.7 trillion (€11.6tr) economy.

In the meantime, according to Markit Economics, a provider of business surveys, the eurozone manufacturing purchasing managers’ index (PMI) edged down slightly to 51.1 in September from 51.4 in August, but remained above the neutral level of 50 that delineates expansion from contraction. The index shows that the eurozone’s recovery remains broad-based, with output increasing in all EU member countries except France and Greece. Holland enjoyed a 29-month high and Ireland a 14-month peak.

Finally, a measure of factory activity in the UK declined in September to 56.7 from a revised 57.1 in August, Markit Economics said. Notwithstanding the fall, the gauge is above the 50 level, signalling that growth is still in place. Economists polled in a Bloomberg News survey had forecasted a reading of 57.5.

This means that Britain’s recovery has strengthened after growth accelerated to 0.7 per cent in the second quarter. British Chancellor of the Exchequer George Osborne said last week that the economy has “turned a corner”.

On the other hand, Bank of England Governor Mark Carney said he doesn’t see an argument for increasing its asset-purchase programme, known as quantitative easing (QE).

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