Janet Mui: weekly economic update 3 May
Looking back on a busy week of economic data and central bank decision-making
Eurozone growth exceeds expectations
Eurozone growth for the first quarter of 2019 came in at +0.4% quarter-on-quarter, better than the expected +0.3%. But current and leading indicators suggest ongoing weakness, especially in the manufacturing sector.
Bank of England keeps rates on hold...
As widely expected, the Bank kept the UK's leading interest rate at 0.75% in its May meeting. It increased the growth forecast from 1.2% to 1.5% for the year and expects the unemployment rate to fall to 3.5%. The market is not anticipating a rate increase in the near future, and any action the Monetary Policy Committee takes is likely to rest on Brexit developments.
...as does the Federal Reserve's Open Market Committee
The FOMC reinforced its “patient” stance. But its statement suggested that currently falling inflation could be attributable to transitory factors and that price growth would return to the 2% level.