The European Commission cut its growth forecasts for the eurozone and slashed its outlook for Germany. At the same time it warned that escalating trade tensions threaten to make the outlook even worse.

The report projects that GDP in the 19-member currency bloc will grow by 1.2 per cent in 2019, down from 1.3 per cent the Commission forecasted in February. The growth rate is seen barely rising to 1.5 per cent next year, down from 1.6 per cent previously projected.

Officials in Brussels warned that substantial downside risks to the region’s outlook remain. International developments coupled with domestic uncertainties and challenges are crippling the European recovery that only two years ago was hailed as the “euroboom”.

Meanwhile, UK house prices picked up in April following a fall in the previous month, according to Halifax. The country’s biggest mortgage lender said that property prices rose by 1.1 per cent in April compared with March, when prices fell by 1.25 per cent.

The annual rate of growth almost doubled, with house prices up by five per cent compared to the same month last year. Economists had expected a 4.5 per cent annual rise. The average home is valued at £236,619.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The lack of supply and properties coming to the market is most likely continuing to support property prices, while cheap mortgage rates continue to attract those who are ready to take the plunge.”

Finally, in the US, producer prices increased in line with economist estimates in April, reflecting the continued rise in crude oil prices. A report issued by the Labour Department said that its producer price index (PPI) for final demand rose by 0.2 per cent in April after climbing by 0.6 per cent in March. In the 12 months through April, the PPI increased by 2.2 per cent, matching March’s rise.

Energy prices surged by 1.8 per cent in the review month after soaring by 5.6 per cent in March. Fuel prices led the way higher, spiralling by 5.9 per cent in April.

These latest figures show that price pressures in the US have remained moderate despite a strong economy and a tightening labour market.

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

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