“Further normalization of interest rates will be appropriate in the next Governing Council meetings.” The European Central Bank writes in the Economic Bulletin, explaining that the decision to raise by half a point in July, which anticipated the exit from negative rates, “allows the Governing Council to move to an approach in which decisions on rates are taken from time to time “and on the basis of economic data.
“Economic activity in the euro area is slowing down” and the war in Ukraine “is a persistent brake on growth”. However, with the reopening of the economy and the resumption of travel, “tourism should favor the economy in the third quarter of this year”. The ECB writes in the Economic Bulletin, according to which “the protracted war in Ukraine continues to represent a source of significant downside risks for growth”, especially if energy supplies from Russia were to lead to rationing for families and businesses.
“In the last days of the reference period (9-20 July, ed.) The yield spreads of euro area government bonds returned to higher levels, with the evolution of the political crisis in Italy”. The ECB notes this in the Economic Bulletin. In a situation of greater volatility, Italy’s spread “also decreased by 8 basis points overall, but its volatility increased towards the end of the period under review, reflecting the political crisis in the country”.
The flexibility in reinvesting the repaid capital on maturing securities of the portfolio of the pandemic emergency purchase program (Pepp) remains “in any case” the “first line of defense in order to counteract the risks for the transmission mechanism related to the pandemic “. The ECB writes in the Economic Bulletin, which describes the TPI, the anti-spread shield approved in July, as “an additional tool available to the Governing Council, which can be activated to counter unjustified and disordered market dynamics that seriously jeopardize the transmission of monetary policy throughout the euro area “.
Source: Ansa
I have been working in the news industry for over 10 years now and I have worked for some of the biggest news websites in the world. My focus has always been on entertainment news, but I also cover a range of other topics. I am currently an author at Global happenings and I love writing about all things pop-culture related.
