14 February 2020
Eurozone industrial production slumps most is four years. Eurozone industrial production plummeted in December, according to estimates by European statistics office Eurostat. Seasonally adjusted industrial production fell by 2.1 percent month-on-month in December from no change the prior month. The December decline is the steepest in four years. Economists were expecting industrial output to fall by 1.6 percent. On a year-on-year basis, industrial production fell by 4.1 percent, a further decline from the prior month’s fall of 1.7 percent. Consensus expectations were for the industrial output to fall by 2.3 percent year-on-year. The average industrial production for the whole of 2019 declined by 1.7 percent year-on-year. The deep slump at the end of last year highlights the scale of the challenge the sector will face in 2020.
British economy halts in Q4 amid political uncertainty. The British economy stagnated in last three months of 2019 amid political uncertainty over Brexit and the snap general election. The Office for National Statistics (ONS) said that gross domestic product (GDP) stalled in the three months to December, as consumer spending plummeted over the Christmas shopping period and manufacturing output slumped in the run-up to the general election. The rate of growth slowed from 0.5 percent in the third quarter, against a backdrop of paralysis in the British parliament before the snap election. Economists and the Bank of England had forecast zero growth in the fourth quarter. Rob Kent-Smith, the ONS’s head of GDP, said: “There was no growth in the last quarter of 2019 as increases in the services and construction sectors were offset by another poor showing from manufacturing, particularly the motor industry.”
US consumer prices edge up in January. US underlying consumer prices picked up in January as households paid more for rents and clothing, supporting the Federal Reserve’s assumption that inflation would gradually rise toward its two percent target. The Labour Department said on Thursday that its consumer price index, that excludes volatile food and energy items, rose by 0.2 percent last month after edging up 0.1 percent in December. Inflation in January was underpinned by increases in the prices of airline tickets, health care, recreation and education. Compared to the year-ago month, core consumer prices in January were up by 2.3 percent. The Federal Reserve last year cut its benchmark interest rate three times to the current historically low range of 1.5 to 1.75 percent. The cuts were partly meant to protect a record-breaking economic expansion from the fallout from President Donald Trump’s trade war with China.
India’s retail inflation may have peaked. India’s inflation may have peaked in January and will probably ease in the coming months, allowing the central bank room to resume interest rate cuts. Data published this week showed that retail inflation surged to 7.6 percent last month from a year earlier, mainly due to costlier fuel and higher food prices. That is the highest level since May 2014 when inflation was at 8.3 percent. However, as food prices came off the boil, inflation will ease to below six percent by March, according to Rahul Bajoria, senior economist at Barclays Bank Plc in Mumbai. The Reserve Bank of Inida last week kept the benchmark interest rate unchanged at a decade low of 5.15 percent, with Governor Shaktikanta Das saying there was policy space available for future action.