Industrial production in the eurozone declined for a third consecutive month in February, an indication that economic growth may be slowing as the European Central Bank is to take a key decision over its stimulus programme.

The European Union’s statistics agency reported last week that industrial output fell by 0.8 per cent month-on-month in February, following a 0.6 per cent drop in January. This was the third consecutive drop and came in contrast to the expected growth of 0.1 per cent. If sustained, a drop in output would make it difficult for the economy to expand at a similar rate as last year.

Meanwhile, economic growth in the UK eased in the first quarter as severe weather disrupted activity across major sectors in March, the National Institute of Economic and Social Research (NIESR) reported last week. According to monthly estimates of GDP, output growth eased to 0.2 per cent in the first quarter of 2018 from 0.4 per cent in the fourth quarter of 2017, the think-tank said. “The main reason for the weakness was severe weather in March which is likely to have disrupted activity in all major sectors of the economy,” Amit Kara, head of UK Macroeconomic Forecasting at NIESR, said.

Finally in the US, at the most recent meeting of the Federal Reserve, officials saw an economy growing at a strong pace and inflation inching up, justifying continued interest rate increases. Minutes from the March meeting of the Federal Open Market Committee showed that policymakers were largely hopeful about the direction of the economy, albeit with a few misgivings. The minutes noted that “all participants” expected both the economy to strengthen and inflation to rise “in coming months”. The general sentiment fuels a belief that the Fed will continue on its path of raising interest rates.

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