US consumer prices rebounded in April after retreating in March, driven by a surge in fuel prices and an increase in housing costs.
The Consumer Price Index (CPI), which gauges costs for household goods and services, rose by a seasonally adjusted 0.2 per cent in April compared to March.
The index was up 2.5 per cent from April 2017, continuing its rising trend and putting it a half point above the Federal Reserve’s inflation target. However, according to analysts, the overall report dents the prospect that the Federal Reserve will raise interest rates more aggressively.
In the meantime, the Bank of England decided to keep its key interest rate and quantitative easing programme unchanged and, at the same time, downgraded its near-term growth outlook.
The bank’s Monetary Policy Committee (MPC) voted 7 to 2 to maintain the benchmark rate at 0.50 per cent. The bank had previously raised its key rate in November of last year. That was the first hike in a decade.
The MPC also unanimously decided to maintain the quantitative easing programme at £435 billion.
The UK central bank projects the economy to grow by 1.4 per cent by the second quarter of 2018 instead of the 1.8 per cent it had estimated in February. Growth is forecast at 1.7 per cent in each of the next three years.
A stronger-than-expected rebound in German industrial output in March and an increase in exports helped soothe worries that Europe’s biggest economy had come to a standstill.
The Federal Statistics Office said industrial production rose by one per cent during the month under review.
This was the strongest increase since November last year and above expectations for a rise of 0.8 per cent. Industrial production fell by 1.7 per cent in February.
“The upswing remains intact,” the Economy Ministry said.
Meanwhile, seasonally adjusted exports rose by 1.7 per cent while imports fell by 0.9 per cent, widening Germany’s trade surplus to €22 billion in March, the data showed.
This report was compiled by Bank of Valletta for general information purposes only.