Banks

RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

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Currencies

Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Financial

Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Categorized | Economy

ECB officials raise fears over recovery


Posted on November 17, 2016

The European Central Bank’s governing council has delivered a bleak assessment of the eurozone’s economic prospects, suggesting that policymakers will unveil a fresh round of stimulus at their December vote.

Analysts expect the council to make a decision in early December on whether to extend its landmark quantitative easing programme past the current deadline of March 2017.

The minutes of the council’s 17 November meeting, published on Thursday, indicate an extension is likely, revealing the group of 25 officials is becoming increasingly concerned about the region’s recovery.

Fears over mounting protectionism, paltry wage growth and a lack of investment were among the risks flagged in the minutes.

Crucially for an institution whose sole official policy goal is an inflation target of just under 2 per cent, officials believed these risks to growth would weigh on inflation — which at 0.5 per cent remains disappointingly low.

“The prevalence of downside risks to the outlook for economic activity was seen to entail downside risks to the inflation outlook,” the minutes said.

While officials believed they did not yet have enough information to justify unleashing a fresh round of bond purchases, most agreed that they would be in a better position to do so by the time of the next policy vote on December 8.

The council will decide then whether to extend its landmark quantitative easing programme at the current pace of €80bn-worth of bond purchases a month. It could also announce changes to the design of the programme, to enable it to counter a scarcity in asset eligible for the eurozone’s central bankers to buy.

The minutes will only add to expectations that the ECB will continue to buy bonds at the same pace until at least the second half of 2017. Reports earlier this year had suggested that the ECB could begin to slow the pace of its purchases after the spring.