Eurozone investor morale rises slightly
Eurozone investor confidence strengthened to a six-month high in January, according to a survey released on January 12 by the behavioural research institute Sentix. Investor confidence rose more than expected to -1.8 in January from -6.2 in December, far surpassing forecasts for a modest uptick to -5.1.
The report highlighted that while private investors had previously been notably cautious about the area’s
outlook, they are now increasingly aligning with the more optimistic expectations of professional investors.
The report also noted that private investors are now joining in, reflecting growing optimism as the year gets under way. Inflation worries were less pressing with investors expecting prices to ease slightly, thereby reducing the pressure on the bond market.
Rising investor confidence typically signals a supportive backdrop for economic growth, influencing investment and spending behaviours.
UK economy returns to growth
The UK economy expanded stronger than expected despite the uncertainties surrounding Rachel Reeves’s budget implications.
Data from the Office for National Statistics (ONS), released on January 15, showed a rebound of a 0.3% rise, from the 0.1% contraction in October, exceeding the modest forecasts of 0.1% increase. The improvement was largely driven by higher industrial output, supported by the resumption of operations at Jaguar Land Rover following the earlier cyberattack at the carmaker.
The UK economy had previously lost momentum since the strong growth of the first quarter of 2025, weighed down by geopolitical uncertainty, elevated interest rates, supply disruptions in the carmaking sector and concerns of tax-raising measures in the Budget.
US inflation held firm in December
US inflation remained steady last month as President Donald Trump faces increasing scrutiny over the cost of living. The consumer price index (CPI) rose 2.7% in the year to December, unchanged from the previous month, and in line with expectations, according to official data published on January 13, prior to a speech by the US president on the economy.
Core inflation, which excludes volatile food and energy prices, eased slightly to 2.6%, just below expectations of 2.7%. Housing costs rose 3.2%, continuing to place upward pressure on the headline figure.
This article does not constitute legal and/or financial advice and is being issued for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).
