India raises interest rates again

The Reserve Bank of India raised interest rates on Thursday. AFP/CNA reports:

India's central bank raised its main interest rates more than expected on Thursday, springing the fifth hike in six months to tame inflation in Asia's third-biggest economy.

The Reserve Bank of India (RBI) raised its main repo rate -- the rate at which it lends to commercial banks -- by 25 basis points to 6.0 percent, a move that was in line with analysts' forecasts.

But it hiked the reverse repo rate -- the rate it pays to banks for deposits -- more aggressively than forecast, increasing it by 50 basis points to 5.0 percent.

Rate hikes are less likely among the major developed economies, although US economic data released on Thursday did show some improvements as Bloomberg reports:

The number of Americans seeking unemployment benefits unexpectedly declined and manufacturing in the Philadelphia area contracted, highlighting forecasts for an uneven pace of economic recovery.

Initial jobless claims dropped by 3,000 to 450,000 in the week ended Sept. 11, the lowest level in two months, the Labor Department reported today in Washington. The Federal Reserve Bank of Philadelphia said its general economic index rose to minus 0.7 in September from minus 7.7 in August...

Wholesale prices climbed 0.4 percent in August after rising 0.2 percent the prior month, figures from the Labor Department showed. The increases have helped ease concern weak growth would lead to a period of deflation, or protracted declines that hurt the economy. Producer prices dropped from April through June.

Meanwhile, the euro area has reported a decline in exports in July. From Bloomberg:

European exports declined for the first time in three months in July as a global slowdown started to curb orders for companies across the euro region.

Exports from the economy of the 16 nations that use the single currency dropped a seasonally adjusted 0.6 percent from June, when they rose 5.3 percent, the European Union’s statistics office in Luxembourg said today. Imports fell 1.5 percent and the trade gap was 200 million euros ($260 million), down from a deficit of 1.4 billion euros in the previous month.

And August saw car sales falling in Europe. Again from Bloomberg:

Fiat SpA, Ford Motor Co. and Toyota Motor Corp. led a fifth consecutive monthly drop in European car sales as the end of government incentives hit demand. Volkswagen AG’s Audi luxury unit gained market share.

Registrations fell 12 percent to 731,503 vehicles in August from a year earlier, the Brussels-based European Automobile Manufacturers’ Association said today. Eight-month deliveries decreased 3 percent to 9.3 million.

Also falling recently is UK retail sales. Reuters reports:

Retail sales fell unexpectedly in August for the first time in seven months, in a sign the recovery may be stalling even as some of the country's biggest stores announced jumps in profits.

The Office for National Statistics said on Thursday that sales volumes fell 0.5 percent last month, defying expectations of a 0.3 percent rise and raising concern that waning consumer confidence is beginning to dent retail demand even before next year's planned VAT and income tax hikes...

Separately, the Confederation of British Industry's monthly survey showed British factory orders fell in September, contrary to expectations, but it also saw inflationary pressures picking up.