Eurozone growth to slow, UK house prices still rising

Eurozone growth may be at a peak. From AFP/Yahoo! News:

The eurozone economy grew 2.7 percent in the second quarter, the European Union's Eurostat data agency has said, revising slightly upwards a previous estimate of 2.6 percent...

On a quarterly basis, the bloc's economy expanded 0.9 percent in the second quarter after growth of 0.8 percent in the first quarter, Eurostat said Wednesday, sticking with a previous estimate...

The EU's executive arm forecast that eurozone quarterly growth would cool to 0.4-0.8 percent in third quarter, 0.2-0.7 percent in fourth quarter and 0.0-0.5 percent in the first quarter of 2007.

But asset prices are still rising. Reuters reports that UK house prices rose at their fastest rate in nearly four years during the three months to September.

The Royal Institution of Chartered Surveyors said its house price balance rose to +45.1 in September from +34.9 in the three months to August -- the strongest reading since October 2002.

The sales-to-stock ratio, which some economists say is a more reliable gauge of housing market health, rose to 38.8 in September from 37.3 in August -- its highest in two years.

Together with rising stock prices, that suggests ample global liquidity. No wonder the Fed was "quite concerned" on US inflation in its September meeting. Reuters reports:

While Fed policy-makers decided at their September 20 meeting to hold interest rates steady for a second straight time, minutes of the gathering released on Wednesday made plain the degree to which they remained focused on inflation risks.

"Recent rates of core inflation, if they persisted, were seen as higher than consistent with price stability, and participants underscored the importance of ensuring a moderation in inflation," the minutes of the rate-setting Federal Open Market Committee meeting said.