Blackfinch Spring VCT PLC has provided a weekly market update, summarizing global events. In the UK, the Office for National Statistics (ONS) reported that the economy shrank more than expected in July, with GDP contracting by 0.5%. Unemployment rose marginally to 4.3% over the three-month period between May and July, and regular pay for UK workers grew by 7.8% from May to July. Grocery price inflation fell to its lowest level in over 12 months at the beginning of September but remains high at 12.2%.
In the US, annual inflation rose from 3.2% in June to 3.7% in July, ahead of economist forecasts. The consumer price index (CPI) rose by 0.6% month-on-month, driven by an increase in petrol prices. Core CPI inflation, which excludes food and energy costs, rose by 0.3% month-on-month, but the annual core rate fell from 4.7% to 4.3%.
The European Commission cut its growth forecasts for the eurozone, estimating that the region's economy will expand by 0.8% this year, down from the previous forecast of 1.1%. Industrial production in the eurozone fell by 1.1% in July compared to June. The European Central Bank increased interest rates to an all-time high of 4.0% but hinted that its monetary policy tightening cycle was near an end.
In Asia, annual consumer prices in China returned to positive territory in August, increasing by 0.1% following a 0.3% deflation in July. China's central bank reduced the amount of cash reserves banks must hold for the second time this year to boost liquidity and stimulate the economy.