The Office for National Statistics revealed that UK inflation rose to 2.3 per cent year on year, beating expectations for a 2.1 per cent rise and higher than the 1.8 per cent reading recorded in January.

The increase in the inflation rate exceeded the Bank of England (BoE)’s two per cent target and was at its highest level since September 2013. Rising fuel and food prices were the main contributors to the rise in the rate.

While inflation has been going up, wage growth has been slowing, thus raising concerns over people’s household budgets being squeezed this year by higher living standards.

The BoE expects that in­flation will rise to 2.8 per cent next year, though some economists believe the rate could exceed three per cent.

In the meantime, the eurozone current account, which measures the eurozone’s balance of trade with other nations, fell to a 15-month low in January, thus failing to meet market expectations of €29.3 billion.

Figures released by the European Central Bank show that the current account surplus fell to €24.1 billion in January from €30.8bn in December. That February balance was the lowest since October 2015, when the surplus was €23.4bn. The surplus on services fell from €5.1bn to €3.5bn, while the surplus on goods traded declined from €31.6bn to €24.1bn.

Finally in the US, a report pub­lished by the National Asso­cia­tion of Realtors showed that existing home sales saw a sharp decline last month following a rise in January, which was the highest rate in a decade.

Sales of existing homes tumbled by 3.7 per cent in February to a seasonally adjusted annual rate of 5.48 million after a rise of 3.3 per cent to a rate of 5.69 million in the previous month.

On the other hand, over the past year, existing home sales increased by 5.4 per cent due to stable hiring and a recovering economy which have stimulated higher demand among homebuyers, though sales growth was restricted by a shortage in supply in the home market.

This report was compiled by Bank of Valletta for general infor­mation purposes only.

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