Top Stories
Euro zone services booming but sentiment recovery may have stalled -ECB’s Lane
Published by Uma Rajagopal
Posted on April 19, 2023
Global Banking and Finance Review
Company
Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
Published by Uma Rajagopal
Posted on April 19, 2023
Euro zone services booming but sentiment recovery may have stalled -ECB’s Lane
DUBLIN (Reuters) -Growth in services across the euro zone is still accelerating but the steady improvement in business and consumer sentiment may have stalled, European Central Bank chief economist Philip Lane said on Wednesday, calling recent developments mixed.
The ECB has raised interest rates at its past six meetings and said that unless the economy starts developing differently than it predicted last month, more increases will be needed to curb inflation.
“The expansion of services business activity is accelerating, supported by a continuation of strong reopening effects and rising incomes, whereas manufacturing output stagnated in the first quarter of the year,” Lane said in Dublin.
“Incoming survey indicators suggest that the steady improvement in business and consumer sentiment, which remains at low levels, may have stalled,” he added.
Markets are now betting on a 25-basis-point interest rate hike at the ECB’s policy meeting on May 4 but investors see a one-in-three chance of a 50-basis-point increase before rates rise further in subsequent meetings.
The peak in rates is seen just below 4% and Lane said that once the benchmark rate hits a plateau, it will stay there for an extended period before cuts are possible.
He also noted that once rates come down, they could stabilise around 2%, not returning to sub-zero levels.
(Reporting By Padraic Halpin, writing by Francesco Canepa in Frankfurt; Editing by Emelia Sithole-Matarise)