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Daniel Richards - MENA Economist
Jeanne Claire Walters - Senior Economist
Published Date: 15 September 2023
The ECB raised rates for the 10th consecutive time yesterday. The 25bps hike took the deposit rate to an all-time high of 4%. Comments from the ECB hinted at the possibility of this being the final hike in the current cycle, saying “interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target”. The ECB also revised down growth expectations for the bloc. They now expect GDP growth of 0.7% in 2023, revised down from a previous forecast of 0.9%, while the forecast for 2024 has been lowered to 1% from 1.5%.
The value of US retail sales rose 0.6% m/m in August, significantly higher than consensus expectations for a 0.1% rise. The rise on the month was however largely attributable to higher gasoline prices, lifting the value of fuel sales by 5.2%. Once those are stripped out the value of sales rose by a more muted 0.2% m/m. US consumers are expected to come under increasing pressure in coming months with the resumption of student-loan repayments and signs of a gradual weakening in the labour market. Separately, US initial jobless claims rose by 3k to reach 220k in the week ending September 9th, slightly below consensus expectations for a rise to 225k.
US PPI rose 0.7% m/m in August, up from a 0.4% m/m rise in July. The increase in producer prices was largely driven by higher gasoline prices, which rose 20% in August. Excluding fuel and food prices, PPI rose by 0.2% m/m.
Today’s Economic Data and Events
Moodys warns on US government shutdown
BoE keep rates unchanged