Inflation in the US continued rising last month as higher shelter and energy prices weighed on consumers. Core consumer prices, which exclude food and energy prices, increased by 0.5 per cent in February after rising by 0.4 per cent in the previous month, and expectations of a rise by 0.4 per cent.
According to the Labour Department report, the consumer price index (CPI) rose by 0.4 per cent in February after climbing by 0.5 per cent in January, matching expectations. Consumer prices year-on-year slowed to six per cent in February from 6.4 per cent in January.
The data leaves open the question of what policymakers at the Federal Reserve might do about interest rates when they meet next week as they must balance high inflation with the recent turmoil in the US financial sector.
Eurozone industrial production rose more than expected in January, partly reversing a fall in December, suggesting pressures on the manufacturing sector are starting to ease.
Industrial production, which includes output from manufacturing, mining and utilities, went up by 0.7 per cent in January compared with the previous month, after a revised 1.3 per cent fall in December, a report by the European Union’s statistics agency Eurostat showed on Wednesday. Economists expected industrial production to rise by 0.5 per cent.
The top performers were heavy users of semiconductors, such as electrical equipment producers, as easing shortages supported growth, while the weakest sector was pharmaceuticals.
The UK government sees the economy shrinking this year but will avoid a recession. In his budget speech on Wednesday, UK Chancellor of the Exchequer, Jeremy Hunt, said the UK economy will likely shrink this year but might avoid a technical recession (defined as two consecutive quarters of contracting growth) due to the changing global developments and government measures to boost growth.
Hunt revealed that the Office of Budget Responsibility (OBR) is forecasting that GDP will contract by just 0.2 per cent in 2023, before growing 1.8 per cent in 2024, 2.5 per cent in 2025, 2.1 per cent in 2026 and 1.9 per cent in 2027.
Unemployment is set to rise to 4.4 per cent, with 170,000 fewer unemployed than initially forecast in the autumn budget statement.
Despite the slightly rosier outlook the OBR warned households will still face the largest fall in living standards on record over the next two years.
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