Minutes of the January Federal Open Market Committee meeting made public last week showed that many committee members suggested that it was not yet clear what adjustments to the target range for the federal funds rate may be appropriate later this year and see little risk in leaving interest rates alone.

Policymakers also noted that some risks to the downside had increased and pledged to stop letting go of the $4 trillion in bonds and other assets held by the central bank before the end of 2019.

Participants noted that some risks to the downside had increased, including the possibilities of a sharper-than-expected slowdown in global economic growth and a rapid reduction in fiscal policy stimulus.

In the meantime, the eurozone’s preliminary composite Purchasing Managers’ Index (PMI) for February came in at 51.4, up from 51 in January. This is the fastest rate of expansion of the region’s private sector in three months. The expansion was led by stronger growth in services, while manufacturing contracted. Economists had forecasted a PMI reading of 51.1. A score above 50 suggests expansion in the sector.

The services reading climbed to a three-month high of 52.3 in February from 51.2 the prior month. In contrast, the manufacturing sector contracted, with the PMI falling to a 68-month low of 49.2 from 50.5 in January. The report comes as European Central Bank officials try to analyse the severity of the slowdown in the currency bloc.

Finally, in the UK, with just over one month before Brexit, and with no withdrawal agreement secured, the unemployment rate came in at four per cent in the fourth quarter of 2018, its lowest since the middle of the 1970s.

The latest data from the Office for National Statistics show that the number of unemployed fell by 14,000 in the three months to December, while employment increased by 167,000.

Wage growth, both including and excluding bonuses, increased by 3.4 per cent year-on-year in the fourth quarter. This is the biggest rise since the three months to July 2008.

There were an estimated 1.36 million unemployed people, 100,000 fewer than a year earlier.

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