Rolling coverage of the latest economic and financial news, as Jerome Powell insists the Federal Reserve can do more to help America through the coronavirus recession
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The European Central Bank’s chief economist has warned that the eurozone economy might not recover from the Covid-19 slump until 2022.
Philip Lane told French newspaper El Pais that the coronavirus is having a ‘terrible’ impact, and sounded notably cautious about the future, saying:
In March the pandemic and the measures to contain it had already led to a substantial contraction of activity. This situation got worse again in April, where we saw a deep fall in activity everywhere. Now the picture is changing: some countries are beginning to loosen their lockdowns. How this will develop in the future depends a lot on how quickly the restrictions on economic activity can be eased, but also on how we adapt to living with the virus.
The speed at which the economy bounces back will then hinge on whether consumers are more reluctant to consume and businesses hold back on investment. From today’s perspective, it looks in any case unlikely that economic activity will return to its pre-crisis level before 2021, if not later.
A wave of optimism has lifted Britain’s FTSE 100 by 128 points, or 2.2%, in early trading in London.
Nearly every member of the blue-chip index is up, led by mining companies. Fresnillo (+8%), Glencore (+5%) and Anglo American (+5%) are all sharply higher, following Jerome Powell’s pledge to unleash more firepower if needed.
It does feel like we’re in the middle of a phoney war at the moment with all of us waiting to see how efficiently the various economies are able to re-open given all the social distancing that will be required
Continue reading...from The Guardian https://ift.tt/3e1HKkp
