Friday 17 February 2012

Riksbank cuts interest rate

Sweden's central bank, the Riksbank, cut its benchmark interest rate by a quarter of a percentage point to 1.5 percent on Thursday and predicted that the rate will remain at that level through the first quarter of next year. It said: “Sluggish growth in the euro area has subdued demand for Swedish exports.”

While the eurozone economy did indeed contract in the fourth quarter, just outside the euro area, Nationwide's consumer confidence index for the UK jumped to 47 in January from 38 in December.

Meanwhile, across the Atlantic, US economic data on Thursday continued their positive trend. Initial claims for state unemployment benefits fell 13,000 to 348,000, the lowest level since March 2008. The Philadelphia Federal Reserve Bank's business activity index rose to 10.2 in February from 7.3 in January. Housing starts rose 1.5 percent in January.

Data on US inflation were mixed though. Overall producer prices rose just 0.1 percent in January but producer prices excluding food and energy rose 0.4 percent, the largest gain since July.

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