Slowdown takes a break

US economic data took a break yesterday. The global economy does not seem to be having any.

The UK economy grew at its fastest annual pace in two years in the third quarter of 2006. Reuters reports:

The Office for National Statistics said on Friday GDP growth held steady at 0.7 percent in the three months to September, confounding market forecasts of a slowdown to 0.6 percent and lifting the annual rate to 2.8 percent.

That was the fastest yearly pace since Q3 2004 and marked the fourth consecutive quarter of growth running above its long-run trend. 2006 growth now looks set to exceed Chancellor Gordon Brown's budget forecast of 2.0 to 2.5 percent.

Bloomberg reports that the German government has raised its growth forecasts to match those of six leading economic institutes (reported yesterday).

Gross domestic product will expand 1.4 percent in 2007, more than the 1 percent predicted in the last official forecast in April, the Economy Ministry in Berlin said today. The prediction for 2006 was revised to 2.3 percent from 1.6 percent.

Meanwhile, Japan's all industry activity index rebounded in August by 0.7 percent after having fallen in recent months.

The strength in the global economy is keeping core inflation up even as oil prices fall. Take Canada as an example, as reported by Bloomberg.

Canada's consumer price index, excluding volatile goods such gasoline, accelerated unexpectedly in September, damping speculation the Bank of Canada may cut interest rates soon.

The annual core rate, which tracks prices minus eight items such as fruit and energy products, rose a more-than-expected 1.7 percent from 1.5 percent in August, Statistics Canada said today in Ottawa. Monthly core inflation sped 0.5 percent...

Overall inflation accelerated at a slower-than-expected annual rate of 0.7 percent in September, a 2 1/2 year low, as gasoline prices fell 17.4 percent on a monthly basis, the most since 1949. Consumer prices fell 0.5 percent in September from the previous month, the biggest decline since last October, the statistics agency said.