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Moody’s Investors Service has downgraded its sovereign credit rating on the UK by one notch to “Aa1” and changed the outlook on the nation’s debt to “Stable” from “Negative”, citing weak growth outlook, substantial fiscal challenges, high and rising debt burden and the deterioration in shock absorption capacity.
George Osborne, the UK’s Chancellor of the Exchequer, has indicated that he would not abandon his austerity measures despite increasing pressure from the opposition to change economic policy, after Moody’s downgraded the nation’s “Aaa” credit rating.
The Bank of England and the People's Bank of China plan to sign a three-year currency swap deal that facilitates easy finance of trade and investment between the two countries.
On a seasonally adjusted quarterly basis, Gross Domestic Product (GDP) in Germany contracted 0.6% in 4Q12, compared to 0.2% rise recorded in the previous quarter. On an annual basis, the GDP climbed 0.1% in 4Q12, compared to 0.4% growth recorded in the previous quarter.
Private consumption in Germany rose 1.0% in 4Q12, compared to a flat rate recorded in 3Q12. Meanwhile government spending increased 0.4% in 4Q12, following an upwardly revised 0.7% growth recorded in the previous quarter.
The Ifo business climate index in Germany rose to a reading of 107.40 in February, to the highest level since April 2012 and from an upwardly revised reading of 104.30 in January.
The Conference Board leading economic index in Germany declined during the six-month period ended December, despite recording a modest rise on a monthly basis. During the six months ended December, the leading index edged down 0.2%, while the coincident index dropped by 0.6%.
European Central Bank (ECB) Governing Council member, Luc Coene, stated that, the strengthening of the euro against other major currencies is not a threat to the growth prospects of the eurozone, and governments need to keep up with reforms while the region recovers from the debt crisis.
The ECB announced that 356 banks will make a repayment of EUR61.09bn on 27 February 2013, below the EUR130.00bn expected by markets.
Eurozone is set to contract for the second straight year in 2013 as the region struggles with a deep financial crisis that is currently holding back spending and investment, but pushing up unemployment. The European Commission, in its winter forecast stated that, the euro area economic activity is bottoming out and it would gradually accelerate. The 17-nation bloc is projected to shrink 0.3% in 2013, in contrast to the November estimate of 0.1% growth.
The ECB Executive Board member, Benoit Coeure stated that, the eurozone economy has been showing signs of stabilisation in recent months. He also said that, Spain and Greece will see a turning point in their beleaguered economies, either sometime this year, or early next year. However, Mr. Coeure noted that there is a need for reform in all member countries, including the larger ones, though at varying degrees and in different areas.
The US and Japan agreed to work more closely to achieve the latter's participation in the free trade agreement known as the Trans-Pacific Partnership (TPP). The TPP envisions a free trade area of the Asia-Pacific.
Federal Reserve(Fed)Governor, Jerome Powell stated that, the central bank could revise its plan to eventually sell the securities acquired during its large-scale asset purchases, both to avoid causing financial instability and taking losses on its sales.
On an annual basis, Consumer Price Index (CPI) in Canada slowed to 0.5% in January, following a 0.8% increase recorded in the previous month. On a monthly basis, CPI rose 0.1% in January, compared to a 0.6% drop recorded in the previous month.
On an annual basis, the corporate service price index in Japan has declined 0.2% in January, compared to a 0.4% fall reported in the earlier month.
The HSBC flash manufacturing Purchasing Managers’ Index in China has declined to a reading of 50.40 in February, more than market estimates and compared to a reading of 52.30 posted in the previous month.
According to the National Bureau of Statistics, house prices increased in majority of the cities in China in January. On a monthly basis, the average asking price for a home in China advanced 0.7% in January, following a 0.4% increase reported in the previous month.
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