Mario Draghi, head of the ECB left interest rates unchanged in September with the ECB cautiously planning the future of their QE programme. Draghi reported that October will see a clearer path revealed by the ECB. The Euro rose 1.2% on the back of the comments.
Inflation in the EuroZone is expected to hit 1.2% for 2018 and 1.5% for 2019 according to the ECB. The goal for inflation is 2% and both these figures fall well below target.
The eurozone saw business activity remain solid during August with growth slowing just slightly despite no solution in sight yet regarding Brexit. The PMI was at 55.7 – well above the 50 mark that delineates growth from contraction.
UK: The services sector saw growth at its lowest level for almost a year in August. Services make up 80% of the British economy. The PMI fell to 53.2 from July’s reading of 53.8.
UK: Economic growth is expected to be just 0.3% for Q3.
UK: the IMF have cut their growth forecast to 1.7% for the whole of the UK for 2017 and to 1.5% for next year. Initially, the group had forecast growth as 2% for 2017.
UK: Moody’s rating agency have warned that the UK economy is heading for a ‘prolonged’ slowdown in spending. This comes on the back of weak data showing households are growing more concerned about the future. The Office of National Statistics released information saying that there had been a ‘notable’ slowdown during H1.
UK: A survey by Britain’s Manpower reveals that 7% of employers planned to hire during Q4 with 2% thinking about cutting jobs. This comes despite the slowdown in the UK economy due to consumer spend and investment decreases.
UK: August’s unemployment rate was at its lowest for 46 years at 4.4%. Productivity fell however by 0.1% during Q2, following Q1’s 0.5%. If more people are in employment producing the same amount of economic output, productivity deteriorates.
Germany: the country recorded a record budget surplus during H1. They took in €18.3bn more than was spent. Government revenue was 4.3% ahead of the same period during 2016 with spending seeing a 4.3% increase also. GDP for H1 was €1.6tn. The surplus was attributed to ‘a restrained spending policy’.
Germany: Q2 saw GDP grow by 0.6%, down slightly from 0.7% in Q1. Growth was due to increases in household and state spending.