Official data published on Wednesday showed that eurozone consumer prices rose in January for the first time since July, stoked by rising costs in Germany, Europe’s biggest economy. The Eurostat agency said its harmonised index of consumer prices in the 19 countries that share the euro hit 0.9 per cent at the start of 2021, a big leap from the negative 0.3 per cent rate registered a month earlier.

On the other hand, the closely watched core inflation rate, which excludes volatile items such as energy and food, also jumped, reaching 1.4 per cent, Eurostat said. Along with Germany, France and Spain saw consumer prices go back into positive territory, although analysts caution that the extraordinary circumstances of the COVID-19 pandemic make inflation difficult to measure. In any case, inflation in the eurozone remains way below the European Central Bank’s target of just under two per cent.

Meanwhile, activity in the UK services sector fell sharply in January due to severe lockdown measures. But optimism improved on hopes for a swift vaccine rollout, IHS Markit said on Wednesday. The IHS Markit/CIPS UK services Purchasing Managers’ Index print registered 39.5 points in January, down sharply from 49.4 in December and represented the fastest reduction in business activity for eight months. The latest reading remained well below the 50.0 mark which separates expansion from contraction but exceeded market forecasts.

“While the UK economy is on course to contract sharply during the first quarter of 2021, businesses remain confident that pent up demand and an easing of pandemic restrictions will provide a springboard to recovery later this year,” Tim Moore, an economics director at IHS Markit, said.

Finally, in the US, private sector employment increased more than expected from December to January according to the January ADP National Employment Report. ADP said private sector employment jumped by 174,000 jobs in January after decreasing by a revised 78,000 jobs in December. Economists had expected employment to rise by 49,000 jobs compared to the loss of 123,000 jobs originally reported for the previous month.

“The labour market continues its slow recovery amid COVID-19 headwinds,” Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said.

This article has been prepared by Bank of Valletta plc for general information purposes only.