UK growth surprises, US consumer confidence improves, Sweden raises rate

The UK economy provided a positive surprise for the third quarter. From Reuters:

Britain's economy grew twice as fast as expected in the third quarter of this year, easing fears the recovery is faltering and dimming the chance of more quantitative easing from the Bank of England...

The Office for National Statistics said the economy grew 0.8 percent between July and September, down from a nine-year high of 1.2 percent in the second quarter but at the very top end of economists' forecasts.

In another piece of positive news on Tuesday, Bloomberg reports that US consumer confidence has improved.

Confidence among U.S. consumers rose in October from a seven-month low as households turned less pessimistic on the outlook for the economic recovery.

The Conference Board’s sentiment index climbed to 50.2, exceeding the median forecast in a Bloomberg News survey, from a revised 48.6 in September, according to figures from the New York-based research group today...

But home prices appear to be weakening again recently.

... Another report showed home- price gains receded in August after a tax credit lapsed...

The S&P/Case-Shiller index of property values covering 20 cities increased 1.7 percent from August 2009, the smallest year-over-year gain since February, the group said in New York...

The gauge fell 0.3 percent in August from the prior month after adjusting for seasonal variations, the second consecutive decrease and the biggest drop since April 2009. Prices reflect a three-month average, indicating the August readings are still being influenced by the earlier drop in sales.

A report today from the Federal Housing Finance Agency showed home prices fell 2.4 percent in August from a year earlier. Measured from July, prices rose 0.4 percent, according to FHFA.

Uncertainty on the US economy is likely to keep central banks in other countries from tightening monetary policy aggressively. Bloomberg reports the latest action from the Riksbank:

Sweden’s central bank raised its benchmark repo rate for a third time since July while policy makers said the prospect of a sluggish global recovery suggests further tightening plans should be scaled back.

The Stockholm-based Riksbank raised the seven-day repo rate by a quarter of a percentage point to 1 percent, it said today on its website. The decision was expected by all 20 economists surveyed by Bloomberg.

“The Swedish economy is growing rapidly,” the bank said in its statement. “However, due to the weak developments overseas, it is not deemed that the repo rate needs to be raised so much in the coming years.”