In October American consumer prices fell by 1%, the biggest monthly fall since seasonally-adjusted changes began to be reported in 1947. The core consumer-price index, which excludes food and energy costs, declined by 0.1%. Headline inflation plunged to 3.7% on a year-on-year basis from 4.9% a month ago. Britain’s consumer-price index fell by the most in a month since its inception in 1997. The annual inflation rate tumbled to 4.5% in October, down from 5.2% a month ago. Cheaper oil was the biggest contributor to the fall.
The economies of the euro zone shrank for the second quarter in a row in the third quarter of 2008, meeting a common definition of recession for the first time since the European single currency came into being in 1999. Japan’s economy also fell into recession, contracting by 0.1% in the third quarter after having shrunk by 0.9% in the second quarter. Exports were 7.7% lower in October than a year earlier, the biggest drop since late 2001. See article
Leaders of the G20, a group of 20 rich and emerging economies, met in Washington, DC. They agreed on the need to stabilise the world’s financial system, to take co-ordinated action to boost demand, to strengthen regulation and to maintain open trade. The leaders said that they would hold a second summit by April 30th 2009. See article