Federal Reserve chair Janet Yellen said last Monday that the US economy is growing and the Fed will work to keep it that way as it stabilises inflation. “We are doing pretty well” in terms of the Fed’s goals, Yellen said. “The economy is growing at a moderate pace.”

Her message to an audience at the University of Michigan could be seen as hinting at further interest rate increases. The Fed raised rates last month by a quarter-point. This was the second increase in three months. The Fed has to gradually raise interest rates toward what Yellen called a “neutral stance” if the economy continues to perform in line with the central bank’s expectations.

Meanwhile, UK inflation stood at 2.3 per cent in annual terms in March, unchanged from the near four-year high seen in February. The March reading met analyst expectations with the month-on-month figure dropping from 0.7 to 0.4 per cent. Rising prices for food, alcohol and tobacco, clothing and footwear, miscellaneous goods and services were the main drivers behind the surge in consumer prices, which is above the Bank of England’s target of two per cent, for the second consecutive month. The UK’s Office for National Statistics noted that this is the highest consumer price increase seen since the end of 2013. However, analysts believe prices could rise even further.

Finally in Germany, confidence among investors rose for a second month in a row in April, to its highest level in over one-and-a-half years as recent strong economic data boosted financial experts’ economic expectations. The economic sentiment indicator climbed to 19.5 from 12.8 in March, survey results from think tank ZEW showed. This was much better than the 14.8 reading economists had forecasted.

Although the long-term average is yet to be beaten, these results are comparable to the expectations prior to the Brexit vote in June last year, ZEW said. The current situation index rose to 80.1 from 77.3 in March. This reading is now at its highest level since July 2011. Economists had forecast a modest improvement to 77.5.

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