ECB forecasts no deflationary pressure in the short term
In a move which has been welcomed by investment markets around Europe, the ECB (European Central bank) has confirmed that in its opinion the Eurozone is not at risk of deflationary pressure over the next few months. As we covered on a recent post, deflation is a very serious situation which can in some circumstances lead to a severe recession. As prices continue to fall, companies look to cut costs, unemployment goes up and there is even less money for consumers to spend.
The ECB also confirmed forecasts that base rates will fall by 0.5% by the end of the year in an attempt to refloat all of the European economies and strengthen the worldwide economy. Never before has the ECB taken such a major role in an economic cycle which is a reflection of the added power and control afforded from the EU members.
In due course many people believe that the ECB will take a role similar to the Federal Bank in the US and control interest rates across Europe. Recent comments regarding the Eurozone from the ECB have been fairly stark, honest and highlighted the difficult situation at the moment.
Share this..
Related stories
Tesco moves into insurance in a big way
UK supermarket giant Tesco has signed a deal with insurance giant Fortis which will see Tesco Financial providing motor and household insurance in a partnership which will last at least until 2015 and possibly beyond. While there are specific benefits for Fortis, making the group the largest insurer of UK motor vehicles with around 2.7 million customers, the benefits for Tesco are potentially enor...
Read MoreAre you fully insured?
As you might expect, the recession has brought a number of criminals into play and burglaries and thefts have increased dramatically over the last two years. Even though many people are insured for the household goods and possibly garden items, it would appear that many people are underinsured as they have not reviewed their insurance policies for many years.
It is no secret that mo...
Company profit warnings hit 7 year high
One of the true warning signs that the economy is in trouble is the number of profit warnings issued by companies on the stock market and this year has been no different. We have seen 111 warnings of lower profits between July and September this year and there are fears that this is not the high of cycle with many more to follow. However, when you consider that this is a 7 year high for profit w...
Read MoreBank of England set to widen quantitative easing program
The quantitative easing program currently being administered by the Bank of England could well be widened over the next few days as the authorities look to inject more capital into the commercial market. Despite the fact that £80 billion of a fund of £125 billion has already been spent acquiring assets and increasing liquidity in the market place, there has been little positive impact to date. S...
Read MoreIMF set to issue $1 billion loan to Ghana
The International Monetary Fund (IMF) has today confirmed that over $1 billion will be issued to the government of Ghana in order to stabilise the fragile economy. The country has seen a significant drop in the exchange rate, the budget deficit balloon out of control and an economy which is struggling more than most in the worldwide recession.
Ghana is the second largest cocoa produ...