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Euro area shows the UK how it’s done

  • With business confidence high, growth accelerating, and voters turning their backs on populists' politics, the euro area’s economic outlook looks increasingly bright. Sadly, the same can hardly be said for the UK. 

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The ECB: No need to rush

  • Provided the French election passes without a shock, the euro area economic recovery looks to be in good shape. 
  • So, although weak underlying inflation means the ECB will not act in the near term, the debate over when to end its negative interest rate policy is set to intensify.  

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Japan: Everything under control in 2017?

  • Japan’s economic recovery looks set to be maintained in 2017, supported by both domestic and external demand.
  • But while inflation will move gradually higher, it will remain some way below target, and so the BoJ will be in no rush to amend its yield curve control policy. 

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Euro area economic outlook: Someway short of scintillating

  • Euro area economic growth remains steady not scintillating. And investors are becoming edgy about political risks.
  • So, while inflation has jumped well above expectations, the ECB’s QE programme is here to stay for a good while yet.

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Time for a change of heart at the ECB?

  • Economic sentiment in the euro area is reviving and inflation is on the rise.
  • So, having last month effectively pre-set policy for the coming year, might the ECB eventually have a change of heart?

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