Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
UK inflation slowed to 0.4% in February from 0.7% the month before, according to the Office for National Statistics. City economists had expected a slight uptick to 0.8%.
Prices for clothes, second-hand cars, and games, toys and hobbies fell, which was partly offset by higher transport costs and petrol prices. Clothing and footwear prices fell 5.6% in the year to February, the biggest drop since November 2009.
Normally, clothes prices rise into February following the end of the January sales, but there was increased discounting this year, especially for women’s clothes and shoes, as the UK embarked on its third Covid-19 lockdown. The ONS said price falls were evident at the start of previous lockdowns.
As for toys, traditional toys such as dolls and scooters, along with computer games, became cheaper, while computer gaming consoles went up slightly in price.
Prices for second-hand cars fell compared with a rise a year earlier. The ONS said there had been increased demand for used cars as people sought alternatives to public transport.
We’ll also be getting the flash estimates for the closely-watched PMI surveys for manufacturing, services and the private sector as a whole for the UK and across Europe this morning.
Fears of a third coronavirus wave in Europe, where new lockdowns have been imposed in Germany, France, Italy and other countries, are weighing on stock markets. European and US stock futures are pointing to a lower open in Europe and on Wall Street later.
In Asia, shares hit a two-week low. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.85% after falling to the lowest level since 9 March at one stage. Japan’s Nikkei and Hong Kong’s Hang Seng both dropped more than 2%, while China’s CSI 300 lost 1.8%.
Oil prices are up 1% for both Brent crude and US crude, following yesterday’s sell-off. Egypt’s Suez Canal has been blocked by a vast container ship that ran aground after being blown off course by a “gust of wind”, causing a huge traffic jam of vessels at either end of the vital international trade artery.
Here’s some video footage:
- 8.15am GMT: France Markit Manufacturing/Services/Composite PMI Flash (March)
- 8.30am GMT: Germany Manufacturing/Services/Composite PMI Flash (March)
- 9am GMT: Eurozone Manufacturing/Services/Composite PMI Flash (March)
- 9.30am GMT: UK Manufacturing/Services/Composite PMI Flash (March)
- 12.30pm GMT: US Durable goods orders (February) (Forecast: 0.8%)
- 1.45pm GMT: US Markit Manufacturing/Services/Composite PMI Flash (March)
- 2pm GMT: US Fed Chair Jay Powell to testify on economic outlook before Joint Economic Committee in Washington
- 3pm GMT: Eurozone Consumer confidence flash (March)