To pull the slumping UK economy out of recession, the Bank of England on Thursday maintained its key interest rate at record low, as expected, and decided to continue its asset purchase programme. Elsewhere, the German industrial production continued to fall in February, but at a slower pace than in January.
The European Central Bank said in its monthly bulletin that the world economy, including the euro area, is undergoing a severe downturn. The April bulletin was identical to the introductory statement given by the ECB President Jean-Claude Trichet on April 2, after announcing the Governing Council decision.
Available indicators of inflation expectations over the medium to longer term remain firmly anchored in line with the Governing Council's aim of keeping inflation rates at levels below, but close to, 2% over the medium term, the ECB said.
Germany's Federal Statistical Office said in a final report that the consumer price index, or CPI, rose 0.5% year-on-year in March, slower than the 1% increase in the previous month. This was the lowest inflation since July 1999. Compared with February, the CPI dropped 0.1% in March.
Later in the day, Germany's Federal Ministry of Economics and Technology said industrial output fell 2.9% month-on-month in February after falling revised 6.1% in January and stretching the downward trend for the sixth consecutive month. On an annual basis, calendar-adjusted output plummeted 20.6% in February following a revised 17.9% decline in January, while the consensus forecast was for a 21.7% fall. On an unadjusted basis, output dropped 23.2% year-on-year after a 21.4% drop in January.
Industrial production in Finland dropped a working day adjusted 22.2% annually in February, faster than a 21.8% fall in January, the Statistics Finland said.
Italy's industrial output dropped a working day adjusted 20.7% year-over-year in February, faster than a 17.6% fall in the previous month, the country's statistical office ISTAT said. Month-on-month, industrial output slipped a seasonally adjusted 3.5% in February, following a 1.2% decline in January.
Ireland's Central Statistics Office said in a report that the consumer price index or CPI dropped 2.6% year-over-year in March, after falling 1.7% in February.
Rest of Europe
At the end of two-day rate setting meeting on Thursday, the Monetary Policy Committee of the Bank of England decided to hold the interest rate at 0.5%. The interest rate now stands at the lowest level since the central bank was established in 1694. The BoE maintained the rate after slashing it for six straight months from 5% in September.
The MPC also decided to continue with the GBP 75 billion-asset purchases programme utilizing the central bank reserves in order to boost lending. The central bank said it would take another two months to complete the asset purchase programme. Since its previous meeting a total of just over GBP 26 billion of asset purchases had been made, the MPC said.
UK's visible trade deficit narrowed to GBP 7.3 billion in February from a revised deficit of GBP 7.8 billion in January, the Office for National Statistics said. Total trade deficit was GBP 3.2 billion in February, compared with the deficit of GBP 3.1 billion in January.
Separately, the ONS said output prices rose 2% on a yearly basis in March, but slower than the 3% increase seen in February. That was the lowest rate of annual increase since July 2007, when it rose 2%. Month-on-month, output prices edged up 0.1%, after remaining flat in February.
Switzerland's seasonally adjusted unemployment rate increased to 3.3% in March from 3.1% recorded in February, the State Secretariat for Economic Affairs, or SECO, said Thursday. On an unadjusted basis, the rate of unemployment in March remained at the level seen in February, 3.4%, while the consensus forecast was for an increase to 3.5%.
A preliminary report by Statistics Estonia showed that the country's foreign trade deficit stood at EEK 1.1 billion in February, representing the lowest deficit since May 2001. In January, the trade deficit was EEK 1.57 billion.
Czech Statistical Office announced that the consumer price index or CPI rose 2.3% year-over-year in March, slower than the 2% increase in the previous month. Month-on-month, consumer prices grew 0.2% in March, after rising 0.1% in February.
Industrial production in Sweden fell a working day adjusted 22.9% year-on-year in February compared to the 23.5% fall in January. Month-on-month, industrial output dropped 2.2%.
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