ROUNDUP 2/Central banks in the race against inflation: Fed as benchmark for ECB?
FRANKFURT/WASHINGTON – The US Federal Reserve is bracing itself with the third strong rate hike as a result against the extremely high rate of inflation. And the euro currency watchdogs are also reaffirming their determination to raise interest rates further. “People can rely on the ECB, inflation will fall again,” said Isabel Schnabel, a member of the Executive Board of the European Central Bank (ECB), in an interview published on Thursday. “People can trust us. We will do our job and ensure stable prices.”
ROUNDUP: Turkish central bank cuts key interest rate again despite high inflation
ANKARA – The Turkish central bank has again lowered its key interest rate despite the very high inflation. The central bank announced on Thursday in Ankara that the key interest rate would be reduced by 1.0 percentage point to 12.0 percent. The majority of economists, on the other hand, had expected the key interest rate to remain unchanged at 13.0 percent. The central bank had already reduced its key interest rate by 1.0 percentage point in August. In the past year, it has lowered interest rates several times.
euro zone: Consumer sentiment falls to record low
BRUSSELS – Eurozone consumer sentiment clouded over again in September. The indicator fell by 3.8 points compared to the previous month to minus 28.8 points, as the EU Commission announced in Brussels on Thursday. This is the lowest level ever recorded. Analysts had expected an average of minus 25.5 points. Consumer sentiment also fell to a record low in the European Union (EU).
USA: Initial jobless claims increased
WASHINGTON – The situation on the US labor market has not improved further in the past week. The number of initial jobless claims rose slightly by 5,000 to 213,000, the Department of Labor said in Washington on Thursday. Analysts had expected an average of 217,000 applications. The number of initial applications had previously fallen five weeks in a row.
US: current account with smaller deficit
WASHINGTON – The chronic US current account deficit narrowed noticeably in the second quarter. Compared to the first quarter, the deficit fell by 31.5 billion to 251.1 billion US dollars, as the Commerce Department announced in Washington on Thursday. However, the current account remains in deficit. In the first quarter, the deficit was higher than ever.
British central bank raises key interest rate by 0.5 percentage points as expected
LONDON – The British central bank is bracing itself against high inflation with another interest rate hike. The Bank of England announced interest rate increases of 0.5 percentage points to 2.25 percent after its interest rate meeting in London on Thursday. It is the seventh rate hike in a row. Analysts had largely expected the move.
ROUNDUP/Private Banks: German economy slides into recession in winter
FRANKFURT/BERLIN – Gloomy prospects for the German economy: The chief economists of private banks in Germany expect that overall economic output will fall for four consecutive quarters by the summer of 2023. High energy prices, rising costs for companies and a significant loss of purchasing power among consumers as a result of extremely high inflation will, according to the forecast presented on Thursday, slide Europe’s largest economy into recession in the winter.
ROUNDUP: Japan braces itself against the weak yen for the first time in a long time
TOKYO — For the first time in a long time, the Japanese government has given the yen a direct boost in the foreign exchange market. It is bracing itself against the extremely weak national currency. Masato Kanda, who is in charge of the foreign exchange market at the Ministry of Finance, confirmed the intervention to journalists on Thursday. We are very concerned and will continue to monitor developments. The yen reacted to the news with significant gains against the US dollar and the euro.
London lifts fracking ban over energy crisis
LONDON – The new British government is lifting a fracking moratorium because of the rapidly rising energy prices. “Given the illegal invasion of Ukraine by (Kremlin leader Vladimir) Putin and the misuse of energy as a weapon, strengthening our energy security is an absolute priority,” Economy Secretary Jacob Rees-Mogg said on Thursday. This should also ensure that the UK becomes a net energy exporter by 2040.
Norway’s central bank raises key interest rate again
OSLO – Norway’s central bank is fighting high inflation in the country with higher interest rates. On Thursday, she tightened hers monetary policy with an interest rate hike of 0.5 percentage points, as the central bank announced after its meeting in Oslo. Analysts had largely expected the decision, which would raise the key interest rate to 2.25 percent. Norges Bank has already tightened its monetary policy several times to counter high inflation.
ROUNDUP: Swiss central bank leaves negative interest rates behind
ZURICH – The Swiss National Bank (SNB) is raising its key interest rate again. The central bank increases the key interest rate by 0.75 percentage points to 0.50 percent. With this step, the monetary authorities want to counteract the renewed increase in inflationary pressure, as the SNB said on Thursday after its interest rate meeting. In addition, it should be made more difficult for inflation to spread to goods and services that have been less affected so far.
ECB Director Schnabel: Inflation will fall again
FRANKFURT – ECB Executive Board member Isabel Schnabel has confirmed the willingness of the central bank to further raise interest rates in the fight against record high inflation. “I assume that the Governing Council will continue to raise interest rates at its next meeting,” Schnabel told the news portal.t-online” in an interview published on Thursday. “I can’t say how big this rate hike will be and up to what level we will raise rates at the moment. We drive on sight and reassess the economic and inflation data before each meeting.”
France: business climate is clouding over
PARIS – Business sentiment in France deteriorated in September. The business climate fell by two points to 102 points, as reported by the Insee statistics office in Paris on Thursday. Analysts had expected the development. Despite the setback, the mood barometer is above its long-term average of 100 points. The slump during the corona pandemic is much deeper. With the exception of the construction sector, the mood clouded over in all areas covered.
EU foreign policy chief announces further sanctions against Russia
NEW YORK – The EU wants to react with further sanctions against Russia to its partial mobilization in the war against Ukraine. “It is clear that Russia is trying to destroy Ukraine,” said EU foreign policy chief Josep Borrell on Wednesday evening (local time) after a special meeting of EU foreign ministers on the sidelines of the UN General Assembly in New York.
Customer Note:
ROUNDUP: You are reading a summary in the business cycle overview. There are several reports on the dpa-AFX news service on this subject.
/jsl