Weak consumer spending as, people – especially in Germany, the EU’s largest economy – put more into savings
Interest rates went up again across the eurozone on Thursday – probably for the last time during this cycle of hikes that has become a familiar story in the single currency bloc, as it has in the UK and US.
The European Central Bank (ECB) raised its main deposit rate by a quarter of one per cent to 4% – the highest level in the euro’s history.
Continue reading...Christine Lagarde is failing to heed the lesson of last decade’s crisis: act quickly and act clearly
Perhaps the European Central Bank was feeling left out as the financial world turned its attention to the US Federal Reserve’s interest rate hike. But emergency meetings of major central banks are supposed to produce more substance than the weak offering that emerged from Frankfurt after a morning of contemplation: a plan to accelerate work on a “new anti-fragmentation instrument”.
The fragmentation in question is the widening of bond yields between eurozone countries. In short, as interest rate rises have come into view, weaker economies are having to pay meaningfully greater rates to borrow than the likes of Germany – about 2.4 percentage points more in the case of Italy.
Continue reading...Live coverage as Aston Martin and car dealer Lookers announce costs savings plans
Young’s pub chain intends to open all of its 276 sites by the 3 August, and is hopeful the business can “bounce back” once its pubs are allowed to reopen, but expects trading to be “materially below average” for the rest of the year.
Another interesting detail from the SMMT data: Tesla’s Model 3 was the most popular car during May.
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In total the coronavirus government support for UK workers has come to £21.8bn, if you add together the money paid for furloughed employees and income support for self-employed workers.
More than 10m British workers have been given some form of income support, if furlough numbers are added to those who have claimed self-employed support*.
More struggles for the British property sector:
British Land, which owns shopping centres including Sheffield’s Meadowhall and Drake Circus in Plymouth, has written down the value of its retail portfolio by more than a quarter due to the impact of the coronavirus.
Related: Shopping centre owner British Land slashes value of retail portfolio
Continue reading...Bank now realises Europe will sustain grievous economic damage from Covid-19
Weak. Clumsy. Behind the curve. The European Central Bank took stick for its initial response to the Covid-19 pandemic – and rightly so.
Those accusations can no longer be levied after the ECB used an emergency meeting to launch a gigantic new package of quantitative easing (QE) – the electronic money creation device that has become a key tool for central banks since the financial crisis of 2008.
Continue reading...US Treasury secretary Steve Mnuchin downplay risks posed by climate emergency
The US and Europe have clashed over the threat posed by global heating as Donald Trump’s finance minister downplayed the risks of a climate crisis during the final session of the World Economic Forum in Davos.
Steve Mnuchin, the US Treasury secretary, said the debate should be about “environmental issues” rather than climate change, that the costs were being over-estimated and that climate was only one of several concerns that needed to be discussed.
Continue reading...Bank president indicates she will move bank beyond traditional remit of controlling inflation
Christine Lagarde has said the European Central Bank should do more to help tackle the climate emergency, as she came under pressure from MEPs to step up action against global heating.
In a strong hint that as president she would move the ECB beyond its traditional remit of controlling inflation, Lagarde said the bank would incorporate the climate threat into both its economic forecasts and in its capacity as watchdog of the financial system.
Continue reading...President of the European Central Bank says US/China tariff war should be seen as an opportunity
Christine Lagarde has called for European governments to boost innovation and growth with higher rates of public investment, in her first major speech as president of the European Central Bank.
Speaking to an audience of bankers in Frankfurt, Lagarde said that rising trade barriers triggered by the US/China tariff war should be grasped by European governments as an opportunity to build a stronger internal market.
Continue reading...Mario Draghi says bank will reboot quantitative easing in month Lagarde succeeds him
The European Central Bank has announced a fresh stimulus package in an attempt to prevent the fragile eurozone economy from grinding to a halt, with an interest rate cut and plans to pump €20bn (£19bn) a month into the financial markets.
In one of his final acts in his ECB presidency, before Christine Lagarde takes charge in November, Mario Draghi said governments across the eurozone needed to take greater steps to reboot growth by ramping up public spending or cutting taxes.
Continue reading...As another five-year term begins, the bloc is straining for unity across a range of issues
When the German chancellor was asked this week why she would not railroad Italy and the so-called Visegrád group of countries – Poland, the Czech Republic, Slovakia, Hungary – into accepting the former Dutch foreign minister Frans Timmermans, a critic of populist governments, as European commission president, Angela Merkel’s answer was telling.
“The Brexit is looming on the horizon,” Merkel said in reference to the need to avoid tensions when appointing the next head of the commission. “Other important issues are on the table. I think we need to treat each other with care.”
Continue reading...European Central Bank provides an arena split between anti-austerians and expansionists
Christine Lagarde will take up the position of head of the European Central Bank as a self-confessed economic outsider who has preferred to emphasise her ability as a listener and tough negotiator during her seven years as managing director of the International Monetary Fund.
A lawyer by training, the former French finance minister is credited with turning around the Washington-based IMF after it was thrown into turmoil by the abrupt resignation of her predecessor Dominique Strauss-Kahn following unproven allegations of sexual assault and attempted rape.
Continue reading...The French government on Saturday released a brief clip of a discussion at the G20 summit in Osaka involving four world leaders – and Ivanka Trump.
Related: Ivanka Trump says stepping into North Korea was 'surreal'
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