As widely expected, the European Central Bank (ECB) held interest rates unchanged on Thursday. The ECB said it would maintain the eurozone’s headline interest rate at zero per cent and the deposit rate at -0.5%.
The central bank also left its programme of unconventional monetary policy unchanged. The ECB last year launched a pandemic-specific bond buying programme to support the economy through the COVID-19 pandemic and has been offering cheap credit to banks in order to encourage lending.
While it decided to stay on hold this time around, the ECB’s governing council signalled it would not hesitate to deploy additional stimulus in future if it deemed it appropriate.
Meanwhile, average house prices in the UK reached an all-time high of £250,000 in November as the buoyant housing market confounded wider economic gloom. The latest official figures show that UK property values jumped by 7.6% in the year to November 2020, the fastest annual growth rate since June 2016.
In London, the average sold price exceeded £500,000, Land Registry data showed, with valuations pushed upwards by a tax break for property sales and ultra-low interest rates.
Analysts said prices might come down next year if the Chancellor of the Exchequer ended the stamp duty holiday as planned on March 31.
In the US, industrial production increased firmly in December, providing a source of strength for the US economy as consumer spending and employment gains slow.
Industrial production – a measure of factory, mining and utility output – increased by a seasonally-adjusted 1.6% in December, according to the Federal Reserve (Fed). Economists expected a 0.5% rise.
Production was underpinned by the utilities sector, as demand for heating picked up following warmer-than-usual November weather, the Fed said.
Utilities output rose by 6.2% in December from the previous month.
Manufacturing output, the biggest component of industrial production, climbed 0.9% in December from the previous month.
Manufacturing, which has regained much of the ground lost earlier in the pandemic, saw production end the year down 2.8%.
This report was compiled by Bank of Valletta for general information purposes only.