Prices paid by American consumers were unchanged in October compared to the prior month, as fuel prices fell and annual inflation was the lowest since September 2021.

The consumer price index (CPI) was flat in October from the previous month but increased 3.2% compared to the same month last year. Both figures were below economists’ estimates.

The so-called core CPI, which excludes volatile food and energy prices, rose by 0.2% and 4%, against the forecast of 0.3% and 4.1%. The slowdown in both headline and core inflation are encouraging developments for the Federal Reserve, the US central bank, which is in a rate-hiking cycle in a bid to slow demand and cool inflation.

Meanwhile, the European Union’s (EU) executive arm lowered its growth outlook for the region for this year and next, saying the economy “has lost momentum” as inflation and higher interest rates discourage consumption and investment.

The European Commission has lowered its forecast for economic growth in the EU this year to 0.6% from its previous forecast of 0.8% and to 1.2% from 1.3% for next year.

The economy ‘has lost momentum’ as inflation and higher interest rates discourage consumption and investment

The Commission said real GDP in the EU hardly changed in the first three quarters of this year. High inflation and tightening monetary policy took a heavier toll than expected, coupled with weak external demand. The conflict in the Middle East has not impacted oil supplies, at least for the time being, and the fall in oil prices has proven to be a tailwind for the region’s economy.

Finally, sentiment among German investors improved more than expected in November, entering into positive territory for the first time in seven months, as economic expectations became more optimistic, survey results from the European Economic Research, ZEW, reported on Tuesday.

Survey results show that economic sentiment in Europe’s largest economy rose by 10.9 points to 9.8 in November.

The market expected the figure would increase by five points in the month. An index of current conditions registered a slight increase of 0.1 points to minus 79.8 points.

“These figures signal that a rebound is coming, but perhaps a little later than previously expected,” said Melanie Debono, senior Europe economist at Pantheon Macroeconomics.

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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