Eurozone inflation accelerated in April, according to a report by Eurostat published on Wednesday. This confirmed preliminary estimates released on May 2 pointing to increasingly stubborn price growth among the 20 nations in the euro currency bloc.

The harmonised index of consumer prices registered an annual growth rate of seven per cent in April, following a 6.9 per cent rise in March. By contrast, core inflation, that excludes energy, food, alcohol and tobacco prices, slowed slightly to 5.6 per cent from 5.7 per cent in the previous month. The core rate was also confirmed.

Citing the strength of underlying price pressures, EU officials earlier in the week lifted their projections for consumer-price growth to 5.8 per cent this year and 2.8 per cent in 2024 from their previous estimates of 5.6 per cent and 2.5 per cent respectively.

Meanwhile, the UK’s jobless rate inched up slightly in the first three months of 2023, although it remains at relatively low levels. Fresh figures from the Office for National Statistics (ONS) showed a 136,000 decline in employment between March and April – the first fall since February 2021.

Although the ONS said the data was provisional, the numbers on payrolls provide the most timely insight into the state of the jobs market and evidences a cooling in demand for labour.

Despite April’s fall, payrolls are more than 800,000 higher than in February 2020, the month before the COVID-19 pandemic hit the country.

The Bank of England’s interest rate rises are leaving an impact on the labour market. The data indicates that the economy is losing momentum as high interest rates weigh on demand.

Finally, in the US, housing starts experienced a slight increase in April, signalling increasing demand for newly built homes in a low-inventory market. Housing starts rose by 2.2 per cent to a 1.4 million annualised rate in April, according to government data released on Wednesday.

Single-family home building increased by 1.6 per cent to the highest level in 2023. This rise was entirely due to a jump in prices experienced in the West. Starts of apartment buildings and other multi-family projects also rose.

The data reinforces the recent improvement in home building sentiment. However, major headwinds persist for the housing market, with the report also showing that single-family home completions fell to a 15-month low, probably due to shortages of building materials recently cited by builders.

This article does not constitute legal and/or financial advice and is being issued for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).

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