In its monetary policy meeting held last week, the European Central Bank (ECB) kept its benchmark interest rates unchanged, as expected. The ECB also stayed on course to end its bond-buying programme by the end of this year and hinted that it would raise interest rates sometime after next summer.

With inflation rebounding and growth on a five-year run, the ECB has been removing stimulus for much of this year, even if more recent growth indicators appear to show that the expansion is running out of steam. The decision took place amid mounting concerns over Italy’s fiscal policies and their potential impact on the stability of the eurozone.

In the meantime, eurozone manufacturing sector activity continued to decelerate in October, the latest activity survey from market research firm IHS/Markit showed. The composite purchasing managers’ index (PMI) for the single currency area, which covers both the manufacturing and the services sectors, came in at 52.7 in October, down from 54.1 in September. This is the lowest figure for 25 months.

The sharp decline in the PMI intensified fears of a lengthy slowdown, amid concerns that the global trade war is having broad repercussions on the economy of the world’s largest trading bloc. “The pace of eurozone economic growth slipped markedly lower in October, with the PMI setting the scene for a disappointing end to the year,” said Chris Williamson, chief business economist at IHS Markit.

Finally in the US, an index made up of leading economic indicators rose for the 12th consecutive month in September, according to data released last week. The Conference Board’s leading economic index (LEI) rose 0.5 per cent in September after 0.4 per cent and 0.7 per cent gains in the previous two months.

The numbers show that most of the areas of the economy covered by the report improved in September, with the most notable exception of permits to build new homes. Workers in the manufacturing sector also experienced slightly fewer hours.

The LEI is a weighted gauge of 10 indicators designed to signal business-cycle peaks and troughs. Eight of the 10 components expanded in September.

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

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