The Latest Bank of England Inflation Report is Not Heartening for Investors

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Bank of England Inflation Report November 2020

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Bank of England inflation report: Five things to watch

It will set out the economic analysis and inflation projections that the Monetary Policy Committee uses to make its interest rate decisions. In its February report, the Bank of England said it expected growth this year to be the slowest since 2009. Here’s five things to look out for this time round. 1. The economy is doing better While the UK isn’t on the critical list, the Bank was expecting the slowest rate of growth in 2020 since the financial crisis – not least because of Brexit-related uncertainty and slower demand for exports from the likes of China and Germany. The Bank expected the economy to expand by an . (full story)

Business news and markets: as it happened – November 13, 2020

Top ECB official Peter Praet says the central bank will take all measures necessary to fulfill inflation mandate, which could include negative interest rates or asset purchases

By James Titcomb, and Ben Martin

5:02PM GMT 13 Nov 2020

Latest

Close of day

17.02 That is where we are going to close the blog today.

As always you can keep up to date with all the news at Telegraph Finance and we’ll be back in the morning.

Thank you for following and all your comments.

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Have a great evening.

Markets close in the red

16.52 Europe markets have ended the day deep in the red as investors speculate that stronger economic data will spur central banks to pare stimulus measures.

The FTSE 100 closed down 1.38pc

In Germany the Dax closed down 0.32pc

In France the Cac closed down 0.6pc

In Spain the Ibex is down 0.34pc

In Italy the FTSE Mib is down 1.43pc

German trade surplus could threaten eurozone recovery, says EC

16.44 Germany’s status as Europe’s industrial powerhouse could be damaging the single-currency bloc, the European Commission has said, as it launched a probe into whether the country’s large trade surplus was hindering Europe’s recovery, reports Szu Ping Chan.

Europe’s biggest economy was one of three countries singled out for an “in-depth review” by the EC’s Alert Mechanism Report on Wednesday.

The Commission said Germany’s large current account surplus, which accounts for most of the eurozone’s positive balance, “may put pressure on the euro to appreciate vis-à-vis other currencies”.

In case such pressures materialise, this would make it more difficult for the peripheral countries to recover competitiveness through internal depreciation.

However, Brussels insisted it was not criticising Germany’s economic success.

Jose Manuel Barroso, the president of the EC, said:

The issue is whether Germany . could do more to help rebalance the European economy.

Brussels said it wasn’t criticising Germany’s economic success

Tesla planning electric pickup truck

16.10 Tesla, the electric car maker that has been on a roller-coaster ride this year, is planning to make a pickup truck, its founder and chief executive Elon Musk has said.

Mr Musk has told Business Insider that it might make the truck in five years. The move would clearly be an effort to capitalise on the popularity of pickup trucks in the US.

The company currently has just its supercar Model S on sale, but is set to release its Model X utility vehicle next year.

Last month, a Model S was engulfed in flames, raising questions about the cars’ safety. Despite this, the company’s shares have quadrupled in the year so far.

Tesla’s Model S

Euro Central Bank asset purchases ‘would be challenged’

15.35 Marc Ostwald of Monument Securities says Mr Praet’s suggestion is unlikely to actually happen

One cannot ignore Mr Praet, given that he is the ECB’s Chief Economist, and this putative scenario is one that in theory opens a door for the ECB to adhere to Draghi’s two ruling principles: “spin” (talk/jawbone) everything and, explore any avenue that can circumvent the ECB’s charter, which again ‘in theory’ allows the operation of the other Draghi principle of doing ‘whatever it takes”.

Still, this would be challenged in the German constitutional court, and would probably be a “bridge too far”, especially with the ‘new’ grand coalition looking ever more antagonistic towards Brussels, e.g on banking resolution to be decided by Fin Mins not EC, and the idea of holding referendums on major EU issues.

Still QE addicted markets will welcome this hypothetical suggestion – thus highlighting that the percentiles for exponential risks on the bell curve are getting ever closer to what would in statistical terms be considered to be normal an risk free – be careful what you wish for seems apposite.

ECB’s Praet: Bank could purchase assets

15.15 Peter Praet, an executive member of the European Central Bank, has not ruled out a round of asset purchases from banks in order to lift inflation in the eurozone.

Mr Praet, who is the ECB’s top economist, has told the Wall Street Journal that the ECB could take the measure, which has long-been resisted by German officials. Article 123 of the Lisbon Treaty prevents traditional quantitative easing – purchasing government bonds like the Bank of England and Federal Reserve have done – but it could buy bank assets in an attempt to heat up the economy.

Low inflation is a big issue in the eurozone at present, and Spain has entered deflation, according to figures released this morning. Mr Praet also said negative interest rates were a possibility – the ECB can’t go much lower than the 0.25pc it cut rates to last week. Mario Draghi said last week that it was not time for QE, but that the ECB has tools to deploy.

This is what Mr Praet said:

If our mandate is at risk we are going to take all the measures that we think we should take to fulfill that mandate. That’s a very clear signal. The balance-sheet capacity of the central bank can also be used. This includes outright purchases that any central bank can do

Peter Praet

Greece says it is on track to meet bailout target

14.40 Greek tax revenues have beaten expectations, helping the country to post an October budget surplus (before interest payments and one-offs) of €1.1bn.

This looks set to give the country’s government a stronger hand in negotiations over the expected third bailout in talks with the troika of the IMF, European Commission and European Central Banl.

The deputy finance minister Christos Staikouras says:

At a huge sacrifice to Greek citizens, unprecedented in post-war Europe, it seems that the country is succeeding its goal. The country strengthens its negotiating position.

Inflation report reaction in three charts

14.10 Here is what has happened to the pound, the FTSE and bond yields since the Inflation Report was released.

Click images to expand

FTSE 100 down around 1.5pc as traders fear end of cheap money

Image: Reuters

Prospect of more expensive borrowing makes pound more expensive. Up from just under $1.59 to around $1.60

Image: Reuters

Bond yields momentarily spiked, reaching the biggest spread over German bunds for eight years.

Image: Bloomberg

France’s iconic piano maker Pleyel closes doors

13.45 Pleyel, the luxury piano manufacturer that produced instruments for the likes of Stravinsky and Chopin, has shut its doors due to low-cost competition from Asia. The report from Reuters:

Founded in 1807 by Ignaz Pleyel, a student of Haydn, the company was a renowned supplier of pianos to European courts including that of Empress Josephine, wife of Napoleon. It is said to have been the first firm to introduce metal framework into the instrument.

Pleyel produced up to 3,000 pianos per year in its heyday, but output trickled to about 20 in recent years as it focused on high-end instruments costing up to €200,000 euros ($269,000), requiring about 5,000 pieces and up to 1,500 hours of labour to assemble.

Other piano manufacturers have similarly struggled to fend off lower-cost competition from Asia in a tight sales market.

In July, US brand Steinway was acquired by hedge fund firm Paulson & Co after struggling to keep its production margins competitive. The last piano manufacturer in Britain, Kemble, closed its doors in 2009 but its pianos are still made today in Yamaha’s Asian factories.

Image: AFP

Sants resigns from Barclays

13.25 Hector Sants has resigned from Barclays, less than one month after taking leave on health grounds. James Quinn has the full story.

Sir Hector Sants, the head of the Financial Services Authority throughout the financial crisis, has resigned from Barclays just a month after taking sick leave for stress.

Sir Hector, who joined the British bank in January as head of compliance and government and regulatory relations, has resigned with immediate effect.

In a statement, the bank said that he had concluded he would not be able to “return to work in the near term.”

The former regulator was placed on sick leave on October 15, as a result of being diagnosed with “exhaustion and stress.”

He was originally signed off work until the New Year, after being told he risked more serious consequences to his health if he continued to work.

On sick leave, he was being paid his full salary – his annual compensation package is worth £3m – but it remains unclear what, if any, monies he will be entitled to as a result of his resignation.

Sir Hector led the FSA as chief executive from July 2007, stepping down in 2020.

Bookmaker runs the numbers on eurozone deflation

12.48 Could the eurozone enter a deflationary period? Following Spain’s return to falling prices, Paddy Power has run the numbers and it thinks the bloc will just about avoid it. Here are the odds

2020 or earlier: 3/1
2020: 9/2
2020: 5/1
2020: 8/1
2020: 8/1
2020 or later: 6/4

FTSE slide continues after Bank of England report

12.34 The fall suffered by the FTSE 100 has worsened this afternoon, with the London index now down 1.4pc, or 95 points, to 6,631 following the news from the Bank of England.

Economists: We expect unemployment threshold in late 2020.

11.55 Jeremy Cook, chief economist at World First, says he is now building unemployment of below 7pc in late 2020 into his economic models:

The Bank of England has decided that the ‘recovery has finally taken hold’ here in the UK. And that unemployment will probably reach its 7.0pc threshold for rate rises a full 9 months earlier than it had predicted at its August meeting.

This morning’s unemployment number suggested a trend of improvement where we would see this 7.0pc threshold hit by Q4 of 2020. The Bank continues to sit on the safe side of things ascribing only a 40pc probability to this and a 60pc probability to the threshold being hit by end of 2020.

Caveats exist, of course. Inflation has been revised to “just below” the 2pc target from Q1 2020 and given the Bank’s original price control mandate, this may delay a tightening of monetary policy – that being said real rates are going to remain negative for a long time and stimulus will remain for years to come.

Partnership shares slump on poor trading

11.40 Back in the stock market, shares in life insurer Partnership Assurance have taken a drubbing. The group, which was floated on the stock market at 385p a share in June, has plunged 21.6pc to about 323p following a very disappointing trading update. Partnership said:

Looking ahead, we do not expect to see growth in our year-on-year retirement sales in Q4 given that sales in the final quarter of 2020 benefitted materially from regulatory change, in particular the introduction of gender neutral pricing.

Inflation report press conference

11.32 The press conference has wrapped up. Upgraded forecasts but little movement on forward guidance (which the Governor defended vehemently, reiterating that 7pc unemployment was a threshold for considering raising rates).

Mr Carney said raising rates now would “pull the rug out from under the recovery”. He said the Bank was monitoring the housing market and said there were a number of actions that could be taken, but appeared relatively relaxed about housing prices.

Image: Getty

11.29 Carney taking a lot of questions on the housing market. “It’s early days, we’re analysing risks,” he says. Number of measures that could be taken

11.23 The Bank has upgraded growth forecasts for the second time in a year, but a few years ago the outlook was a lot more rosy.

11.21 Watch Mark Carney’s opening remarks in our video below

11.17 At what point does monetary policy take the unbalanced recovery we are seeing into account.

In terms of what monetary policy takes into account, we have to stay centred on our mandate which is the 2pc inflation target, we have to do that in a way that helps employment and output. If a scenario developed where vulnerabilities emerged such as excessive borrowing that is a responsibility of the Financial Policy Committee. They have tools to mitigate those risks.

On the eurozone:

We don’t have a recovery in net exports in our forecasts. We do expect a removal of the pall of uncertainty around businesses about a very bad scenario in the eurozone.

11.16 Does Mr Carney take some credit for the recovery?

Our view is that guidance is helpful to sustain the recovery, it only really shows its worth in conversations you have with businesses and individuals.

11.14 Carney is asked whether the Bank is concerned about a housing bubble, particularly in London, and if rising house prices are actually choking off consumer spending rather than improving it.

We dont make policy for inside the circle line we make it for the entirety of the UK.

Clearly there are areas where values are elevated and increasing. The greatest price momentum are for houses towards the upper end. Part of that may be credit constraints for people who would buy houses at lower valuations.

When we look at it from a financial stability perspective, we look at momentum and leverage for individuals. We are being vigilant we are spending a lot of time analysing the housing market.

Housing is an important part of the recovery. The MPC and the FPC are working closely to share perspective and analysis.

I would put less emphasis on the wealth effect benefit. The way we look at this is that what drives consumption is the expectation of future earnings which are improving and consistent with the recovery.

11.05 Carney asked about “the new normal”. He says as the labour market heals, the natural rate of unemployment should return to the pre-crisis levels of around 5pc.

He reiterates claims he made earlier in the year that the recovery is being fuelled by rising income not by debt, but admits that real wage growth is needed to sustain consumption growth.

11.02 A big spike for the pound following the Bank of England bringing its forecast for 7pc unemployment closer. It briefly climbed above $1.60.

11.00 Why should anyone have any faith in the Bank’s ability to predict the economy, given it’s failure in recent years? Mr Carney says.

The important thing is to get the big things right. It did forecast a stronger recovery than the market expected [recently]. It also predicted lower inflation and inflation has been soft. We think we got the direction right. The big call we have to make is the judgement on the degree of slack in the economy to achieve our inflation target.

We’re trying to improve the transparency of our forecast process so if someone has a different view they can see what’s driving our forecast.

10.55 What is the point of forward guidance, Mr Carney is asked.

Let’s say we didn’t have forward guidance. We’ve had a very strong, unexpected recovery. Given surveys, the discussion would have been: “Is the bank going to raise rates today?” Nobody’s asking that question and that would be foolish because it would be pulling the rug out from under [the recovery]. We’ve shifted the question to one about unemployment.

Charlie Bean says the message of forward guidance is that policy is not related to growth rates but to slack [in the economy].

10.50 Mr Carney refuses to be drawn on when he may raise rates, he says he “could imagine” unemployment falling below 7pc and keeping rates low.

What would be foolish of us is to anticipate what we’re going to learn [over the next few months as the economy recovers]. This is the point where we learn how much slack is in the economy.

FTSE falls on expectations of rate hike

10.44 The prospect of an earlier-than-expected rate by the Bank of England has sent the FTSE 100 even lower, with London’s benchmark equity index now down 1pc, or almost 66 points, to 6,660.

Meanwhile, shares in electricals retailer Dixons have been lifted 1pc by a bullish note from analysts at heavyweight broker Citigroup, who were positive about the company’s prospects this morning. They said:

The group has successfully exited its loss-making PIXmania operations, sold off its Turkey operations and entered a joint venture with Marco Polo in its heavily lossmaking Italian operations.

This has left it with a UK and Ireland business that is continuing to take market share in our view, a market-leading electricals retailing group Elkjop in the Nordics and a potentially recovering business in Greece. We increase our profit before tax forecasts to adjust for the deconsolidation of Unieuro in Italy given its recently announced disposal to Marco Polo under a new entity and our view of improved cost containment within the UK & Ireland business.

Mark Carney press conference

10.43 Mr Carney says a recovery in wages is likely to stem from a recovery in productivity, which will in turn be caused from a recovery in demand.

What the Bank of England is doing is providing the confidence with policy that is being set in a way that will support the recovery.

10.40 Governor Mark Carney is now speaking. He says the Monetary Policy Committee is “very comfortable” with the current policy of forward guidance.

We have one of the strongest recoveries in the advanced world. We are not even going to think about tightening policy until the [7pc] threshold has been achieved. This is the right framework for the right time.

You can watch the webcast here

Bank of England upgrades growth forecasts

10.30 Bank of England Governor Mark Carney has upgraded growth predictions for 2020 from 1.4pc to 1.6pc, and next year’s forecasts have been upped from 2.5pc to 2.8pc.

He says the 7pc threshold at which the Bank will consider raising interest rates is now likely to be reached in the third quarter of 2020. Inflation predictions have also been reduced

Here are the new predictions for growth and inflation against those made three months ago:

New growth prediction

August’s growth prediction

New inflation prediction

Old inflation prediction

Unemployment improving in regions

10.05 Although unemployment in the North and Midlands remains high, much of the decline in the measure in the last year has come from the regions.

Unemployment Reaction: Jobs growth may not last, Carney pressure subdued

09.50 Jeremy Cook, chief economist at currency brokers World First says that we should not get ahead of ourselves in expecting a rise in interest rates next year:

This latest figure will hearten those who believe that the UK economy has now turned a corner. As it stands, the UK is the strongest economy in the G10 and it certainly has momentum.

While the jobs market seems to be improving, we are still reticent to revise our thoughts on when the Bank of England will raise interest rates as part of its forward guidance plan. I still feel that we are looking at 2020 for that to happen.

The current rate of job improvement in the UK would mean that the 7% threshold would be hit towards the end of 2020. However, we expect to hear the BOE maintain that recent good news is productivity driven and not down to the jobs market.

Meanwhile, Andrew Hunter, the co-founder of jobs website Adzuna, says that the jobs growth may not last:

There’s no question that the situation for jobseekers has improved dramatically over the past year. The number of advertised jobs hit a two-year high in September, and there has also been a significant drop in competition for jobs, with just 1.9 jobseekers per vacancy around the UK compared to 2.3 in 2020.

But while the autumn months performed strongly, the outlook for Christmas is beginning to darken. We’re already seeing the volume of job vacancies easing off in November, ahead of what is typically a slower time on the jobs market

Unemployment at lowest level for four and a half years

09.38 The FTSE 100, which had fallen some 0.8pc before that jobs data, has now edged down 0.9pc, a 60-point decline.

09.30 Unemployment has fallen to 7.6pc in the three months to the end of September, the lowest level since May 2009, according to the Office for National Statistics.

This was down from the 7.7pc figure published a month ago, and in line with expectations.

3i falls as activist investor loses interest

09.05 Shares in listed private equity group 3i have fallen 2.7pc this morning after activist investor Edward Bramson revealed he has decided not to pursue a turnaround of the company after all. Sherborne Investors, the investment vehicle that has built up a 5pc stake in 3i, said this morning that the “risk of and rewards from new investments that it has identified offer better returns to the company’s shareholders than a continuing investment in 3i”. The news comes just a day before 3i reports first-half results.

World Trade Center opens today

08.50 The first new skyscraper at the World Trade Center opens today, 12 years after the Serptember 11 atrocities. The building, Four World Trade Center, was officially designated the tallest in the US last night at 1,776 ft.

However, the building remains 40pc unoccupied, and the remaining 60pc is taken by two tenants – joint owner the Point Authority of New York, and New York’s Human Resources Administration. Some of this space is expected to be leased out.

Image: Getty

Sainsbury’s leads the FTSE’s risers

08.35 J Sainsbury is the leading riser in a weak market, in the wake of encouraging first-half results that showed adjusted pre-tax profit rose 7pc to £400m. That has sent shares in the supermarket group climbing 1.3pc, while the FTSE 100 has declined 0.6pc, or 37 points, to 6,689. Of the wider market, Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, said:

Mark Carney will be in the spotlight today when he presents his inflation report this morning. For a number of years now, the Bank of England has been plagued by higher than expected inflation and lower than expected growth. Now, however, Mr Carney needs to explain why the economy is growing faster than expected while inflation is unexpectedly falling. With the economy picking up, investors will be waiting to hear if the MPC has changed its forecast on when their 7pc unemployment goal will be reached.

Spain enters deflation

08.10 Bad news for Spain: Consumer prices saw 0.1pc deflation in October on a year-on-year basis.

Deflation is especially bad news for heavily-indebted, weak growth countries since it puts consumers off buying goods (which will be cheaper down the line) and makes it harder for debtors to pay back money.

Click to expand

Corporate roundup

08.00 Louise Armitstead has more of this morning’s news in today’s City Briefing.

Barratt Developments is the latest housebuilder on the rise, reporting a 46.7pc jump in private forward sales to £1.1bn over the period between July and November.

“The Government’s Help to Buy shared equity scheme continues to provide strong support to the market and has accelerated the recovery in consumer demand for new homes,” the company has said. British Land has reported a 6.6pc rise in underlying pre-tax profits to £146m, up from £109m last year.

Icap has reported a sharp drop in pre-tax profits to £40m from £68m last year, as a result of £68m costs “driven by settlement payments and associated legal fees” following the Libor rigging investigations. Hornby has reported a turnover of £22.5m in half year results, a small drop from £23.5m last year.

Roger Canham, chairman, has said the future is “looking brighter as the transformation we have embarked upon progresses.” The London Stock Exchange has reported pre-tax profits of £116m, down from £165m in the first six months last year.

Energy giant SSE raises dividend

07.45 Emily Gosden has the first take on results from SSE, one of the big six energy firms which has upped its dividend by 3.2pc just days after implementing an 8.2pc price rise.

SSE, formerly known as Scottish and Southern, reported adjusted pre-tax profits of £354m for the six months to the end of September – down 11.7pc on the same period last year – and said its energy supply business swung to a £115.4m operating loss.

The company said the result in the supply arm – which delivered a £48.3m operating profit a year earlier – reflected “the impact of higher wholesale gas, distribution, environmental and social costs, which themselves were rising, during the spring and summer period of lower energy consumption”.

SSE insisted its dividend increase was necessary to reward shareholders for their investment – despite calls from Labour for companies to put consumer interests before those of shareholders.

SSE said that its “core purpose is to provide the energy people need in a reliable and sustainable way” but added that its “first financial responsibility to its shareholders is to remunerate their investment through the payment of dividends.”

Flybe top shareholder sells 48pc stake

07.35 The trust of the late Jack Walker – the former owner of Blackburn Rovers Football Club – has sold its 48.1pc stake in Flybe, the regional airline has announced. The sale increases Flybe’s free float to 85pc.

Institutional investors snapped up the shares yesterday, in a sale handled by Liberum Capital. 36.1m shares were sold yesterday – they were trading at more than 100p after a big rise on Monday following the news that Flybe will cut 500 jobs.

Sainsburys market share highest in a decade

07.20 J Sainsbury has posted a 9pc rise in first-half profit as it grows its market share to 16.8pc, the highest level for a decade.

The supermarket’s total sales in the 28 weeks to September 28 were up 4.4pc at £13.95bn, while profit before tax grew to £433m after 35 consecutive quarters of like-for-like sales growth.

Chief executive Justin King has just told BBC Radio 4 that the company is “still some way off Tesco” but “the most important measure is what customers think and on most measures we’re leading that”.

Mr King also said businesses that operate in the UK must pay correct taxes:

I think if customers are asking questions about paying tax [that affects the business].

Companies that choose to trade in our country should be contributing fully to our society and its clear that corporation tax has become an optional tax and they can choose what country to pay it in.

Inflation report due

07.15 It’s a big day in economics today: The Bank of England’s quarterly inflation report is due out at 10.30, in which it is expected to upgrade growth forecasts as well as predicting lower inflation and unemployment than it did three months ago.

However, Governor Mark Carney may well use the subsequent press conference to reiterate that he will not raise interest rates until a sustained recovery has taken hold. Three months ago he said rates would not rise for three years but markets are pricing in a hike in early 2020.

Expectations of a rate rise may be ramped up if unemployment figures impress. The Office for National Statistics is due to report on September figures at 09.30, with unemployment expected to have fallen from 7.7pc to 7.6pc.

Here’s the BoE’s growth projection from three months ago.

Best of the rest

07.10 Here’s a roundup of the rest of the papers

• Financial Times (£): The global probe into foreign exchange manipulation has widened to include 15 of the world’s biggest banks and some of the most actively traded currencies, as lenders scramble to help authorities in exchange for leniency.

• The Times (£): MPs and energy experts rounded on EDF Energy last night for “blackmailing” the Government after threatening to raise energy bills unless consumer-funded green levies were slashed.

• The Independent: Young people in Britain are experiencing a “jobless recovery” as unemployment among them rises while older people find work, according to a study published today by The Institute for Public Policy Research.

Top stories in the Telegraph

07.05 Here’s what’s leading the Business section of today’s Daily Telegraph

• George Osborne has said Britain is “on the path to prosperity” and is enjoying a recovery that “many countries would crave”, reports Louise Armitstead from yesterday’s Telegraph Festival of Business

The economy is hitting a “sweet spot” of accelerating growth and falling inflation, economists said yesterday after a supermarket petrol price war helped inflation drop to its lowest level in more than a year, writes Szu Ping Chan.

• Vodafone will plough an extra £1bn into upgrading its network in anticipation of a strengthening European recovery, in spite of “very tough” trading conditions, as Christopher Williams reports.

And Allister Heath calls for a new generation of businesses to start transforming British schools.

Here’s the front page of today’s business section. Click to expand

Good morning

07.00 Good morning and welcome to our daily business and markets live blog, your one stop shop for all the breaking business stories of the day.

BANK OF ENGLAND INFLATION REPORT

Bank of England cuts rates to near zero

They also voted unanimously on Thursday to restart buying government bonds and corporate debt for the first time since 2020, a day after the European Central Bank ramped up its debt-buying too.

20 Mar, 2020, 02:36AM IST

Private bank rates higher due to inflated margins: RBI

An RBI analysis of different retail rates shows that the average margins over the benc.

09 Apr, 2020, 12:56PM IST

Covid-19 to accentuate growth slowdown, impact on inflation ambiguous: RBI

“COVID-19, the accompanying lockdowns and the expected contraction.

09 Apr, 2020, 06:31AM IST

European shares gain on Bank of England triple whammy

The benchmark STOXX 600 was up 1.6 per cent, with London’s FTSE 100 rising 1.2 per cent after the BoE unexpectedly cut rates.

View: Growth, and not inflation is India’s real problem

The real problem facing India and the world economy will be growth, not inflation.

Forget inflation & fiscal deficit, get money out to people: Swaminathan Aiyar

Fighting effects of coronavirus, normal rules go out of the window. Recession is inevitable, says Consulting Editor, ET Now.

Retail inflation may force RBI to hold rates: Report

The RBI is scheduled to announce its next bi-monthly monetary policy on February 6.

RBI sees inflation plunging to 2.4% in Q4 of this fiscal

Adds caveat that demand collapse can take CPI further down

Coronavirus impact: Bad loans may surge with private sector banks facing maximum risk

A stress test conducted by the regulator prior to the outbreak of the virus showed that overall bad loans could rise to 10.5 percent of total loans in September 2020 from 9.3 percent in September last in the worse-case scenario of `severe stress.’

Oil slump worsens lowflation risks central banks can’t ignore

The question now is whether they have the capacity to respond as strongly as needed.

RBI MPC may consider coronavirus impact on Indian economy: Report

The coronavirus outbreak has brought a large part of the world’s second-largest economy China to a standstill and its impact has been felt across industries. On January 30, the World Health Organization (WHO) declared the coronavirus (COVID-19) outbreak a global health emergency. The impact on India is felt through supply chain disruptions from China as well as regional players, who in turn are net importers from China.

Rupee opens 17 paise down at 74.08 against the US dollar

The rupee fell against the US dollar after the Federal Reserve cut interest rates to near zero per cent in an emergency move amid the economic impact of the coronavirus outbreak.

Govt may soon announce second stimulus package worth over Rs 1 lakh crore: Report

Economists at the state-run SBI have said that much of the earlier stimulus package was already announced for in the budget and only Rs 70,000 crore is fresh.

Central banks on offensive; Fed cuts rate, others may follow

The Reserve Bank of India (RBI) had said earlier on Tuesday that it stood ready to safeguard the country’s banking system from financial and market risks stemming from the spread of Covid-19, citing expectations of “coordinated policy action” by central banks.

Coronavirus pandemic puts US Fed on rapid route to zero

The US central bank is facing calls to slash borrowing costs to zero at or before Wednesday’s decision.

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