Rolling coverage of the latest economic and financial news
- Latest: ECB presses on with faster bond purchases
- CBI’s business optimism gauge highest since 1973
- Hiring intentions surge as firms plan to take on more staff
Earlier:
- Credit Suisse made pre-tax loss of 757m Swiss francs in Q1
- CEO Thomas Gottstein: unacceptable loss
- Swiss regulator starts enforcement proceedings
ECB president Christine Lagarde has warned that uncertainty over the latest wave of Covid-19 infections, and Europe’s vaccine rollout, are casting a cloud of uncertainty over the eurozone.
Speaking at a press conference in Frankfurt, she says that the current restrictions imposed to fight the pandemic are hitting economic actitity:
While the recovery in global demand, and the sizeable fiscal stimulus, are supporting global and euroarea activity, the near-term economic outlook remain clouded by uncertainly about the resurgence of the pandemic and the rollout of vaccination campaigns.
Persistently high rates of coronavirus infection, and the associated extension and tightening of containment measures, continue to constrain economic activity in the short term.
. @Lagarde “The situation remains clouded by uncertainty. Wider financial risks remain. Reduction of the increase in infections and the speed of vaccines underpin the robust recovery”. #COVID19 @eunewsit pic.twitter.com/YfS81QiB1P
Related: France and Germany’s Covid vaccination programmes pick up speed
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Melissa Davies, chief economist at Redburn, is concerned that the ECB is short of firepower, if the eurozone economy weakens:
“The ECB confirmed its current policy stance today, with rates on hold and QE asset purchases temporarily boosted during this quarter. But with Eurozone credit conditions tightening and governments’ grip on the virus in question, observers may wonder whether the ECB has anything left in the cupboard to deal with negative risks to growth and inflation.
Any increased Covid restrictions and the risk of winter lockdowns point to the need for the ECB to do more, rather than less, in the coming months. As things stand, ECB growth estimates are far too bullish for this year and the central bank risks falling behind the curve as Eurozone deflation pressures build in H2.”