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Strategy & economics

Janet Mui: weekly economic update 3 May

Looking back on a busy week of economic data and central bank decision-making

02/05/2019

Janet Mui

Janet Mui

Global Economist

Eurozone growth exceeds expectations

Eurozone growth for the first quarter of 2019 came in at +0.4% quarter-on-quarter, better than the expected +0.3%. But current and leading indicators suggest ongoing weakness, especially in the manufacturing sector.

Bank of England keeps rates on hold...

As widely expected, the Bank kept the UK's leading interest rate at 0.75% in its May meeting. It increased the growth forecast from 1.2% to 1.5% for the year and expects the unemployment rate to fall to 3.5%. The market is not anticipating a rate increase in the near future, and any action the Monetary Policy Committee takes is likely to rest on Brexit developments.

...as does the Federal Reserve's Open Market Committee

The FOMC reinforced its “patient” stance. But its statement suggested that currently falling inflation could be attributable to transitory factors and that price growth would return to the 2% level.

This article is issued by Cazenove Capital which is part of the Schroder Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.

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