The European Central Bank and the Bank of England kept their benchmark interest rates at record lows to support a recovery from the worst economic slump since World War II.
The ECB left the main rate at 1 percent and President Jean- Claude Trichet signaled at a press conference in Venice that the ECB has no plans to raise borrowing costs, describing their level as “appropriate.” The U.K. central bank kept its rate at 0.5 percent and maintained a program to buy 175 billion pounds ($278 billion) of government bonds with newly created money...
“The recovery is expected to be rather uneven,” Trichet said. “It will be supported in the short term by temporary factors but will be hampered in the medium term by balance sheet issues at financial and non-financial institutions.”
For the moment, the recovery remains on track though, at least in Germany.
German industrial output rose in August as domestic stimulus measures and improved global trade lifted demand.
Production rose 1.7 percent from July, when it fell a revised 1.1 percent, the Economy Ministry in Berlin said today. Economists had forecast an increase of 1.8 percent, according to the median of 36 forecasts in a Bloomberg survey. From a year earlier, production declined 16.8 percent when adjusted for the number of work days.
Also on track is Japan's recovery, with exports in particular continuing its recovery in August.
Japan’s current-account surplus widened in August as a rebound in global demand helped ease declines in exports.
The surplus widened 10.4 percent to 1.171 trillion yen ($13.2 billion) in August from a year earlier, the Ministry of Finance said in Tokyo today...
Exports fell 37.1 percent in August from a year earlier, less than a 37.6 percent decline the previous month, the report showed. Imports slid 42.8 percent, more than a 41.2 percent drop in July, in part because oil prices have tumbled from last year’s record highs. From a month earlier, exports rose a seasonally adjusted 3.2 percent.
Confidence among Japanese merchants rose in September, a boost economists say may not last as near- record unemployment and falling wages deter people from spending.
The Economy Watchers index, a survey of barbers, taxi drivers and others who deal with consumers, climbed to 43.1, the Cabinet Office said today in Tokyo. The index dropped for the first time in eight months in August.
Meanwhile, in the US, despite the dismal employment figures last Friday, the labour market is probably turning, based on the jobless claims data.
The number of Americans filing first- time claims for unemployment benefits fell last week to the lowest since January, a sign the labor market is deteriorating more slowly as the economy emerges from the recession.
Applications fell by 33,000 to 521,000, lower than forecast, in the week ended Oct. 3, from a revised 554,000 the week before, Labor Department data showed today in Washington. The total number of people collecting unemployment insurance dropped in the prior week to the least since March.