Annual Inflation up to 0.3% in the Euro Area

Figures compiled by Eurostat have unveiled that inflation for January this year was 0.3% in the euro area , a month on month increase from the 0.2% that was recorded in December.

Compared to January a year ago, the data is favourable, as then inflation sunk into a negative of 0.6%.

For the whole of the European Union, inflation remained unchanged for January in comparison to December at 0.2%.

This was another vast improvement from a year ago, where inflation was minus 0.5%.

Year on year, negative inflation rates was found to have depreciated in ten of the EU member states, with the lowest rates in Poland -1.7%, Romania -1.5%, and Cyprus by 1.1%.

In contrast, the highest rates from a yearly comparison were recorded in Belgium 1.8%, Austria 1.4%, and Sweden 1.3%.

France and the United Kingdom both matched the euro area, with inflation figures of 0.3% for January, whereas Germany reached 0.4%.

The most significant upwards trends on inflation arrived from restaurants and cafes, which appreciated by 0.10%. They were followed by tobacco and fruit, which rose by 0.06%.

While transport has the most negative effect in inflation, unsurprisingly as oil prices remain low, as it was reduced by 0.28%.

Heating oil and gas, with minus figures of 0.18% and 0.11% respectively were the next most deteriorating categories for inflation.

Euro is Boosted Against the US Dollar

The euro has recovered itself against the US dollar this morning GMT, after falling precipitously at midday yesterday.

Currently the euro is buying $1.10, having reached up to $1.104, the highest against the greenback then single currency has been since the end of January.

Some analysts believe that selling pressures on the euro have increased, due to moderate macro economic data which has been released for the euro area.

Germany only grew at a stable 0.3% for the fourth quarter of last year, and such figures may prompt the European Central Bank to take more stimulus action, when the governing council will convene for a monetary policy meeting on March 10 in Frankfurt.

The UK pound has continued to suffer in the aftermath of the announcement on the referendum on European Union (EU) membership for June 23.

This morning, the pound is buying $1.392, falling way below purchasing $1.44 before the referendum was confirmed.

Against the euro, the pound’s fortunes didn’t improve, as sterling is now buying EUR 1.26, a slight fall having climbed to EUR 1.266 this morning GMT.

HSBC have said in a statement, that the pound would decline by 20%, and UK economic growth would be reduced by 1.5%, in the event of an exit from the EU.

They conclude that the pound would plunge by 15-20 percent against the dollar, also resulting in moving towards parity with the euro.

December Construction Industry Boost for Germany

Official figures have found that there was an increase in new orders for the construction industry in Germany by 3.9% for December last year.

Turnover also increased by a year on year 6.8%, for building construction and civil and underground engineering companies, who have 20 or more employees.