Overview

America's housing market is struggling to recover. The number of housing starts fell by 11% in July, leaving them at their lowest level since 1991. The decline reversed a big jump in June, prompted by a surge in starts in New York ahead of tighter building regulations. The confidence index compiled by the National Association of Home Builders remained at a record low in August.

There are worrying signs of a broadening impact on inflation from past increases in commodity prices. In America factory-gate prices for goods other than food and energy rose by 3.5% in the year to July—the fastest increase since 1991. Meanwhile Germany's producer-price inflation, excluding energy, rose from 3% to 3.6% in July.

Japan's central bank kept its benchmark interest rate unchanged at 0.5% on August 19th. The bank reckons that GDP growth will probably “remain sluggish” in the near term.

Business confidence in France fell for a sixth straight month in July, according to the central bank. The survey suggests that French GDP will rise by just 0.1% in the third quarter.

The Bank of England's monetary-policy committee debated the merits of both an increase and a cut in interest rate on August 6th and 7th. The minutes to the policy meeting revealed that seven of the nine-strong committee opted to keep the bank's benchmark interest rate at 5%. In a repeat of the decision in July, one member voted for higher rates and another for a reduction.