17 February 2023
US inflation stays elevated in January. The US consumer experienced a robust rise in prices at the start of the year, a sign of persistent inflationary pressures that could push the Federal Reserve (Fed) to raise interest rates even higher than economists have predicted so far. The Labour Department's Consumer Price Index (CPI) climbed 0.5 percent last month, exceeding expectations of a 0.4 percent gain after a revised gain of 0.1 percent in December. The CPI was up 6.4 percent on a yearly basis, marginally down from 6.5 percent in December and also more than the 6.2 perent economists predicted. The core rate, which excludes volatile food and energy prices, rose by 0.4 percent in January and was up 5.6 percent on the year, easing from 5.7 percent in December. The January inflation data was being closely watched on the heels of an unexpectedly strong US jobs report for last month fuelled expectations that the Fed will have to raise interest rates more aggressively.
UK inflation falls but remains in double digits. The UK’s annual inflation rate fell for a third month in a row in January, easing pressure on the Bank of England to raise interest rates. However, inflation stayed in double digits and close to its highest levels for 40 years. A report by the Office for National Statistics (ONS) shows that inflation in Britain hit 10.1percent in January, below economists’ expectations, but high food and energy prices continued to put the pressure on households. Core CPI, which doesn’t include food, energy, alcohol or tobacco, came in at 5.3 percent compared to 5.8% percent in December, according to the ONS. Chancellor Jeremy Hunt warned that the "fight is far from over" on rising prices and said it was why the government "must stick to the plan to halve inflation this year, reduce debt and grow the economy".
Eurozone industrial output declines in December. Signalling weak economic activity towards the end of the year, Eurozone industrial production fell more than expected in December, suggesting that the currency bloc is on the brink of a recession. Industrial output in the Eurozone fell by 1.1 percent month-on-month in December, following an upwardly revised increase of 1.4 percent in November, Eurostat data showed. The figure was worse than economists’ estimates of a 0.8 percent decline for the month. “The contraction was mainly triggered by German industry, in contrast to significant gains in France and Italy. The main industry groupings showed that the weakness was widespread across sectors, with only the energy subcomponent to post a gain,” a note by Oxford Economics showed.
China’s housing market teeters between boom and bust. China's average new home prices declined for the ninth successive month as buyers remained cautious of committing to more purchases amid the on-going economic crisis caused by the pandemic restrictions aftereffects in 2022. House prices in China declined by 1.5 percent in January, nearly matching a similar decline in December, data from the National Bureau of Statistics showed on Thursday. China’s real estate sector is estimated to account for about 30 percent of total economic output being closely linked to local government revenues, which last year racked in 3.7 trillion renminbi (900 billion US dollars) — or a third of total fiscal revenue — from land sales to developers.
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