In the eurozone, a second reading of the inflation rate was confirmed at 2.2% in December, the fastest pace since October 2008, led by higher energy costs.
European Central Bank (ECB) president Jean-Claude Trichet said short-term inflation risks had increased. The ECB, which met for the first time this year, left interest rates on hold at 1% as expected.
The eurozone trade balance roe to deficit of £0.4 billion in November, after registering a surplus of £4.7 billion surplus the previous month.
Industrial production in the EU-16 area rose by 1.2%, from the 0.7% increase registered the previous month, driven mainly by intermediate, capital and energy goods.
US economic data releases did not strengthen confidence in the country’s economy, after the disappointing payroll data last week. However, there are still expectations of better conditions in the year ahead.
In the labour market, the latest jobless claims figures were worse than expected, with claims rising to a 10-week high of 445,000 in the latest week, after increasing by 410,000 the previous week.
Economic conditions were reported to be stronger, but there are still important areas of concern. Meanwhile, an index measuring producer prices rose to a more-than-expected 1.1% in December 2010, after rising to 0.8% in November.
In the UK, the Bank of England kept its interest rates at its record low of 0.5% and, as expected, made no change to the £200 billion of quantitative easing asset purchases.
The manufacturing sector expanded for the seventh consecutive month, by a more than forecast 0.6% during November from the previous month when it also increased by the same rate. However the wider measure of industrial production rose by 0.4% in November after falling by 0.1% in October.
Meanwhile, the total trade gap deteriorated in November as the trade deficit – including both goods and services – rose to £4.123bn, the highest level since August 2010, from £4.038bn. This was mainly due to a deterioration in the trade gap, which widened to £8.74bn in November, the biggest deficit since monthly records began in January 1980.
House prices, as measured by Halifax, continued to fall in December 2010. They fell 1.3% in December from the previous month, when they had fallen by 0.2%.
This article has been prepared by Bank of Valletta plc for general information purposes only.