The eurozone emerged from recession in the first quarter of this year better than analysts expected, the latest data released by Eurostat on Tuesday showed.
Data showed gross domestic product (GDP) in the 20 countries that share the euro currency rose 0.3% from the previous quarter in the January-March period, for an annual rate of 0.5%. Economists had expected growth for both periods to be 0.2%. Capital's Andrew Kenningham said: “Today's better-than-expected first-quarter GDP data means the eurozone has emerged from recession, but core and services inflation both fell in April. “This does not prevent the ECB from starting an easing cycle in June.” economy.
Separately, in the US, the Federal Reserve left interest rates on hold at the end of Wednesday's monetary policy meeting, saying it has a little more time to cut rates as stubborn inflation no longer requires policy makers to cool off. He said it may take some time. economy.
Benchmark short-term interest rates remained within the target range of 5.25% to 5.50%, the lowest level since July 2023, when the central bank last raised interest rates to their highest level in more than 20 years.
At this week's meeting, the Fed also decided to slow the pace at which it reduces its large bond holdings on its balance sheet, in an apparent effort to combat high interest rates.
Fed Chairman Jerome Powell said in a post-meeting news conference that policymakers still believe current interest rates are putting enough pressure on economic activity to keep inflation in check.
Finally, UK house prices fell in April as affordability concerns drove potential buyers away from the market, according to mortgage lender Nationwide.
House prices fell 0.4% from March to April, following a 0.2% decline in March and missing the 0.2% rise expected by economists. This was the largest month-on-month decline since August 2023, when mortgage interest rates peaked.
“This slowdown reflects continued affordability pressures as long-term interest rates have risen in recent months, reversing the sharp decline seen around the start of the year,” said Robert Gardner, chief economist at Nationwide. It's very likely.” He added: “Taking seasonal effects into account, house prices are currently approximately 4% below the all-time high recorded in summer 2022.”
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