GBP
Britain’s annual rate of consumer price inflation fell below zero for the first
time in more than half a century, figures showed on Tuesday, though Bank of
England Governor Mark Carney said the dip was likely to be brief. British
finance minister George Osborne also said the drop did not amount to
“damaging deflation”, referring to a spiral of falling prices that
hurt the economy.
 
The Office for National Statistics said consumer prices fell 0.1 percent in

GBP
Britain’s annual rate of consumer price inflation fell below zero for the first
time in more than half a century, figures showed on Tuesday, though Bank of
England Governor Mark Carney said the dip was likely to be brief. British
finance minister George Osborne also said the drop did not amount to
“damaging deflation”, referring to a spiral of falling prices that
hurt the economy.
 
The Office for National Statistics said consumer prices fell 0.1 percent in
April compared with the same month last year. Economists had expected the
consumer price index to remain unchanged.
 
It was the first time annual CPI had fallen since official records began in
1996. Based on comparable estimates going back further, it was the first time
that consumer prices had declined since 1960, the ONS said.
 
Carney was keen to stress that the decline was caused by last year’s big
one-off fall in energy prices and not weak domestic demand.  He also went
on to add that Britons should enjoy the reduction in their cost of living
before inflation picked up.
 
“We expect inflation to be very low over the next few months. But over the
course of the year, as we get towards the end, inflation should start to pick
up towards our 2 percent target,” Carney told broadcasters.
 
An underlying measure of inflation, which strips out increases in energy, food,
alcohol and tobacco, rose by 0.8 percent in April, which was its slowest rate
since March 2001.

EUR
German investor confidence fell more than analysts forecast after growth in
Europe’s largest economy slowed at the start of the year. The ZEW Centre for
European Economic Research said its index of investor and analyst expectations
fell to 41.9 in May from 53.3 in April. That’s the lowest level since December.
Economists had forecast a decline to 49.
 
Growth in Germany slowed more than economists forecast in the first quarter,
even as the euro area, its largest trading partner, expanded at the fastest
pace in almost two years. While the Bundesbank predicts momentum in German
manufacturing will be sluggish in the months ahead, it sees consumer spending
supporting the economic recovery.
 
German gross domestic product rose 0.3 percent in the three months through
March, less than in neighbouring countries such as France or Spain and the
19-nation euro area, which expanded 0.4 percent in the period.

USD
New residential construction in the U.S. surged in April to the highest level
in more than seven years, indicating the industry has moved beyond a
weather-related soft patch to regain strength.
 
Housing starts jumped 20.2 percent to a 1.14 million annualized rate, the most
since November 2007. The median forecast was 1.02 million. More permits, a
proxy for future construction, were issued than at any time since June 2008.
 
An improving labour market and mortgage costs close to multiyear lows are
reviving residential construction, a sign that the weakness in early 2015 was
probably due to harsh winter weather. 

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