Monthly Archives: July 2014

Claire Jones

This blog will no longer be updated.

Our thoughts on all things central banking, along with the more wonkish elements of economic policy, will appear on Alphaville and The World blogRead more >>

Claire Jones

The European Central Bank has found itself caught in the crossfire of a battle raging between the world’s leading macroeconomists.

The Bank for International Settlements’ call last month for the world’s central bankers to hurry up and raise interest rates has reignited the debate over how to explain – and tackle – the financial and economic turmoil that has persisted over the past six years. Read more >>

Claire Jones

The European Central Bank has revealed the details of arguably the most important element of the package of extraordinary monetary policy measures it unveiled last month to rid the eurozone of the threat of deflation.

On Thursday, the ECB announced exactly how its targeted longer-term refinancing operation, or the TLTRO, will work. Earlier forward guidance that rates were likely to remain on hold until the end of 2016 was watered down by Mario Draghi, ECB president, possibly in the hope that this would raise the take-up of the TLTRO funds.

Mr Draghi also revealed that banks would be able to borrow up to €1trn from the central bank, should they smash targets, or benchmarks, set by the ECB. Lenders are already able to borrow an initial amount of $400bn in two auctions, scheduled for September and December. The €400bn figure corresponds to 7 per cent of their lending books to businesses and households, excluding mortgage loans. Read more >>

John Aglionby

Despite inflation remaining extremely low across the eurozone and signs that the recovery is weaking in the single currency bloc, the European Central Bank kept its interest rates unchanged at its monthly meeting. Analysts are now looking for Mario Draghi’s assessment of the extraordinary measures introduced in June and details of any further measures..

By John Aglionby and Sarah O’Connor

 

Ben McLannahan

“Inflation expectations appear to be rising on the whole.”

Check out the last 11 policy statements from the Bank of Japan: you’ll find the same line, an upgrade from a milder assertion about “some indicators” last July.

But according to the second round of the BoJ’s survey of companies’ expectations for price rises – the grand-sounding “inflation outlook of enterprises”, published on Wednesday – expectations are not rising. If anything, they’re falling. Read more >>