UK Inflation Stays at 0.3%

Official figures have revealed that UK annual inflation rate in May has remained stable at 0.3%, compared to the previous month.

The data for May keeps inflation at the same rate which it has been at all year so far, with the exception of March, where inflation jumped up to 0.5% due to the influence of the Easter holidays.

Between April and May this year, inflation rose by 0.2%, which matched the rise in prices that was recorded for the same two months in 2015.

The main avenues to upward pressure on prices, included a rise of 0.9% in transport costs, compared to a 0.6% rise a year ago, this was  partly due to a three pence rise for a litre of diesel.

Restaurant and hotel prices climbed by 0.3% compared to the rise of a year ago, as prices for overnight occupancy increased

In contrast, clothing and footwear costs depreciated by 0.2% from April into May, a clear difference to a year ago, when prices leapt up by 0.5%.

Recreation and culture and food and beverage prices both declined by 0.4% in the latest data, downward contributions in both categories came from games, toys, and a fall in costs of vegetables and confectionary.

The 0.3% figure for May might be unchanged, but inflation is still way below the 2% mark that is favoured by the Bank of England.

So far today GMT, the pound has reacted by falling further against the US dollar, with the GBP/USD rate now $1.41, falling from $1.43 yesterday afternoon, and slightly above $1.42 this morning.

Industrial Production up by 1.1% in Euro Area

Eurostat has found that industrial production  spiralled upwards by 1.1% in April, in comparison to March.

Across the European Union (EU), the news was even more positive, as activity in the industrial sector rose by 1.3%.

Month on month, the results were encouraging as in March 2016 industrial production fell by 0.7% in the euro area and by 0.5% in the EU.

The figures comparing April this year to April last year was not such good reading, as

industrial production increased by 2% and 2.5% in the euro area and  the EU respectively.

Ireland celebrated the highest rise amongst the member states, with an industrial increase of 6.7%, followed by Portugal on 6.4%.

While the largest decreases were in Croatia minus 2.8%, Lithuania  minus 2.7%, and Latvia minus 2%.

Employment has risen by 0.3% in both the euro area and the EU, in the first quarter of this year.

For the euro area the rise was the same as in the final quarter of last year, although for the whole of the EU there was a slight decline in jobs created, as employment rose by 0.4%.

The Czech Republic employment levels grew the highest by 1.5%, with Hungary the third highest with a 1% rise, perhaps surprising considering their recent steep fall in GDP by 0.8%, in the first quarter of this year.

German 10 Year Yields Now Negative

 Investors’ nerves over the slowing global economy has resulted in a shock negative yield on 10-year German bonds for the first time.

It is thought that prospective turbulence over a UK exit from the EU has also exacerbated the fears of the markets.