The prices paid by Americans for key goods and services was unchanged in January, likely supporting a more patient approach to interest rate rises by the Federal Reserve.

Data by the Bureau of Labour Statistics show that the seasonally adjusted Consumer Price Index (CPI) gained 1.6 per cent in January. This was the smallest increase since June 2017 and lower than the 1.9 per cent gain registered in December.

Inflation was held in check by cheaper petrol prices which offset increases in the prices of food, rent and healthcare, among others. Excluding volatile items such as food and energy, the CPI gained 0.2 per cent, rising by the same margin for the fifth month in a row. Economists expected the headline CPI to inch upwards by 0.1 per cent in January and the core CPI to rise by 0.2 per cent.

In the meantime, British property surveyors are the most pessimistic about the short-term outlook for home prices in almost eight years, a survey by the Royal Institution for Chartered Surveyors (RICS) showed last week. The survey also showed that property sellers are less keen on putting houses on the market.

RICS said that its monthly house price balance fell to -22 in January from -19 the previous month. This is the lowest reading since July 2012 and a bigger drop than forecasted by economists.

The survey added to signs of weakness in the UK housing market and the economy in general ahead of Britain’s anticipated exit from the EU on March 29.

Lastly, Germany narrowly avoided entering a technical recession (defined as two consecutive quarters of negative growth) after it posted flat growth in the fourth quarter of last year.

Preliminary data from the Federal Statistics Office showed that the German economy showed a zero growth rate in the fourth quarter compared to the third, when the economy had contracted by 0.2 per cent. Economists had forecasted the economy to grow by 0.1 per cent in the fourth quarter.

This raises concerns that Europe’s largest economy is slowing down. Positive contributions to growth came from domestic demand while foreign trade failed to make a positive contribution.

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