Berenberg Bank: Strong Confidence in British Businesses Suggest That the Uk Economy Has Enough Momentum to End the Year Strongly

BERENBERG BANK: STRONG CONFIDENCE IN BRITISH BUSINESSES SUGGEST THAT THE UK ECONOMY HAS ENOUGH MOMENTUM TO END THE YEAR STRONGLY news.instaforex.com »

2013-10-04 12:42

BoE's Fisher Says British Economy Remains Weak, Downplays Bullish Outlook

UK's economy remains vulnerable to risks despite recent economic data indicating a strong pick up in activity, Bank of England policymaker Paul Fisher said Wednesday. He cautioned that growth will likely remain weak in the near term and the economy will take a longer time to recover than the United States.

Dismissing the recent positive economic data as insignificant, BoE's head of markets noted that it is imperative to keep monetary policy loose for a long period to achieve growth that is in line with trend.

Fisher said that the macroeconomic outlook in the U.K. is not as good as in the U.S, where inventors had belatedly realized that a recovery is possible.

Addressing a gathering of business persons, Fisher said that house prices in the U.K. are too high and urged lenders to pass on their lower funding costs on to clients. Terming the government's Funding for Lending scheme a success, he called for actions conducive to increase the number of transactions in order to raise demand.

In an interview given to The Times earlier the policymaker reserved his comment on his stance on BoE governor Mervyn King's proposal to split the Royal Bank of Scotland (RBS) into a "good" bank and a "bad" bank. He said that it is possible to privatize the RBS if a two-year program is prepared for the same.

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2013-06-12 19:41

Russia's Economy Can Grow 3-4%, Presidential Adviser Says

Russia's economic growth rate is below potential, Russian Presidential Adviser Elvira Nabiullina said, according to news agency Itar-Tass.

But it can grow at 3-4 percent this year, Bank Rossii Governor-designate Nabiullina said. She said institutional reforms are needed for better growth.

The central bank is under immense pressure to cut rates to contain slowing growth. It has kept its key rate unchanged at 8.25 percent for the seventh consecutive month, but reduced rates on long-term liquidity operations by a quarter point in April as it sees increased risks to economic growth.

The bank said the macroeconomic indicators pointed to a continuing deceleration of economic growth and increased risks of its deceleration.

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2013-04-18 12:42

BoJ Unveils Aggressive Monetary Easing Measures

The Bank of Japan on Thursday announced decisive stimulus measures aimed at ending 15 years of deflation in the country as Governor Haruhiko Kuroda kept his promise of embarking on aggressive monetary easing at his first Policy Board meeting.

The Board decided to merge its asset purchase program with the regular monthly bond purchases. Under the new plan, the central bank purchases of the Japanese Government Bonds (JGB) will amount to around JPY 7 trillion per month.

The Board said that the BoJ will purchase JGBs so that their amount outstanding will increase at an annual pace of about JPY 50 trillion. This is expected to encourage a further decline in interest rates across the yield curve.

The average maturity of the bank's JGB's will be extended to seven years from slightly less than three years at present. JGBs with all maturities including 40-year bonds will be made eligible for purchase, the central bank said in a statement.

The Board decided to change the main operating target for money market operations to the monetary base from the benchmark uncollaterilized overnight call rate, which was kept unchanged at 0-0.1 percent.

The monetary base will now increase at an annual pace of about JPY 60-70 trillion. Further, the central bank temporarily suspended the banknote principle.

BoJ also set a time horizon of about two years for attaining 2 percent inflation target.

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2013-04-04 11:30

Switzerland Maintains Currency Ceiling; Keeps Rate Steady

The Swiss National Bank retained the currency ceiling and its key interest rate near zero as widely expected by economists, as the bank sees sluggish growth in the coming year.

The bank led by President Thomas Jordan decided on Thursday to maintain the minimum exchange rate of CHF 1.20 per euro.

The SNB said it will continue to enforce the floor rate with the 'utmost determination' as an appreciation of the Swiss franc would compromise price stability and would have serious consequences for the Swiss economy.

Further, the bank reiterated that it is prepared to buy foreign currency in 'unlimited quantities' to enforce the exchange rate.

The target range for the three-month Libor was maintained at 0.0-0.25 percent. The bank said it stands ready to take further measures at any time, if needed.

For 2012, the SNB forecasts consumer prices to fall 0.7 percent, compared to a 0.6 percent drop estimated at the September meeting.

The bank expects overall prices to ease 0.1 percent in 2013 and inflation at 0.4 percent in 2014. In the foreseeable future, there is no risk of inflation in Switzerland, it said. In September, the bank had estimated a 0.2 percent inflation for 2013.

According to the SNB, economic growth in Switzerland for the year 2012 is likely to remain unchanged at around 1 percent, in line with September forecast. For 2013, the bank expects growth of 1 percent-1.5 percent.

The economy grew 0.6 percent in the third quarter, strongly recovering from a 0.1 percent contraction in the previous three months.

Although real GDP in the third quarter increased following a temporary downturn, the SNB expects significant weakening in growth in the fourth quarter.

Even at current levels, the currency is likely to act as a drag on growth in the coming quarters, Jonathan Loynes, chief European economist at Capital Economics said.

If Eurozone crisis re-escalate, safe haven flows into the currency may well pick back up again, providing a sterner test of the SNB's determination, he said.

The Swiss economic growth in 2013 is likely to be weaker than previously thought due to deteriorating global economic conditions, the State Secretariat For Economic Affairs (SECO) suggested Thursday.

Gross domestic product is now expected to grow 1.3 percent next year, at a slightly weaker pace than the 1.4 percent growth forecast in September. The GDP projection for this year was left unchanged at 1 percent. Growth is seen picking up momentum further in 2014 with the GDP expanding 2 percent

The KOF Institute last week lowered the Swiss economic growth, citing weaker exports and investments. It projects 1.2 percent growth for next year.

Earlier, the SNB had introduced a countercyclical capital buffer allowing the Federal Council to increase the capital buffer of banks depending on potential excesses in the Swiss credit market. ING Bank NV's economist Julien Manceaux expects this facility to be used in 2013.

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2012-12-13 15:24