United Kingdom industrial production was unchanged in August as shut downs at some North Sea facilities sent oil and gas extraction down 1.7 percent. The industrial output figure, matched the median forecast of economists. Manufacturing production rose 0.1 percent from July, also in line with forecasts.
On Friday the UK's trade deficit was reported to narrow by £1.3 billion compared with July 2014. The main factor behind the deficit narrowing was not an increase in exports but a large fall in imports from non-EU countries. Between July 2014 and August 2014, exports of goods decreased by £0.7 billion to £23.2 billion mainly attributed to oil. Over the same period, imports of goods decreased by £2.0 billion to £32.3 billion reflecting falls in imports of aircraft, fuels and chemicals The US Dollar strengthened during last week Thursday 9th October, after data revealed the number of Americans filing applications for unemployment benefits unexpectedly fell last week. This pushed the average over the past month to the lowest level in eight years and signalling that employers are hanging on to workers as the economy improves. Firings are hovering around the lowest in almost a decade as employers retained their workforce to meet rising demand. This excellent jobs figure is continuing the positive trend from the first nine months of the year. It also lays the ground for stronger gains in hiring and wages that will give the world’s largest economy a boost even as global growth is expected to cool. The U.S. economy is predicted to grow 2.2 percent this year, compared with a 1.7 percent projection in July, the International Monetary Fund said this week. Federal Reserve policy makers are watching for evidence the labour market has been restored to full health before raising interest rates, which have been held near zero since December 2008. Most Fed policy makers indicate they expect an initial rate rise next year. Federal Reserve officials sounded an alert over the threat to U.S. growth from a slowdown elsewhere in the world, warning it could make them delay an interest-rate increase. Fed vice Chairman Stanley Fischer said yesterday in a speech at the International Monetary Fund’s annual meetings in Washington “If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly."
Mario Draghi and Jens Weidmann are clashing over how much more stimulus the ailing euro-area economy needs from the European Central Bank. As Europe’s woes again proved the chief concern at weekend meetings of the International Monetary Fund in Washington, President Draghi repeated he’s ready to expand the ECB’s balance sheet by as much as 1 trillion euros ($1.3 trillion) to beat back the threat of deflation. Bundesbank head Weidmann responded by saying that a target value is not set in stone. The ECB is swelling its balance sheet as it seeks to revive inflation of 0.3 percent; it’s lowest in almost five years by buying private-sector assets and accepts collateral from banks in return for cheap loans. Still unresolved is if the ECB will ultimately buy sovereign debt, a taboo subject in Germany where politicians worry it amounts to financing governments and removing pressure on them to act. India’s rupee snapped four weeks of losses on optimism a retreat in oil prices will help narrow the nation’s trade deficit. Brent crude dropped to $88.11 a barrel today, the lowest level in almost four years, and is poised for a 3.1 percent loss this week. India imports about 80 percent of its oil and its trade shortfall narrowed to $10.8 billion in August from $12.2 billion in July as prices fell. The International Monetary Fund this week raised its 2014 growth forecast for the nation to 5.6 percent from 5.4 percent and predicted Asia’s third-largest economy will expand 6.4 percent next year.