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EUROPEAN CENTRAL BANK president Mario Draghi is coming under increasing pressure to resort to radical cash injections to ease deflation fears stalking the currency bloc.
Latest economic data from the central European Union statistics agency show that spiralling energy costs pulled consumer price inflation down to just 0.3%, some way short of the ECB’s mandated target of around 2% inflation.
Analysts said that the stubbornly low inflation data is proof that Mario Draghi’s June attempt to solve the inflation problem with ultra-low interest rates and a €400 billion targeted stimulus package has failed.
Sluggish performance by the Eurozones leading economies, including France and Germany, has further increased pressure on Frankfurt officials.
In a landmark speech at the economic symposium in Jackson Hole, Wyoming last week, Draghi indicated that he would be employing a freer policy from here on out, with observers now expecting a significant announcement after next week’s monthly ECB governing council meeting.
The German finance minister Wolfgang Schaeuble said that the ECB does not have the instruments to fight deflation at the moment.
Alasdair Cavalla, an economist with the Centre for Economics and Business Research in London, said that the low figures “will further increase pressure on the ECB to unleash a quantitative easing programme to stimulate price rises and ultimately spending”.
He said that the main opposition to any movement would come from the German central bank, the Bundesbank, which could luse legal provisions to try and block it.
He added: “However, the gravity and seeming intractability of the problem mean that these previously unthinkable options are now on the table.”
Merrion capital head economist Alan McQuaid said that a QE package could be pushed through, although it was unlikely to happen next week.
Any QE package would provide a further tailwind for the relatively bouyant Irish economy, he said, with a weakening of the euro a major bonus for the large export sector here.
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So Trump! Your new BFF is still playing you….as he has since the beginning. Nice photo opportunities though.
@Paul Furey: He’s not playing him. The fact is DPRK have nuclear weapons with long range now. This puts them automatically in a better bargaining position than they were before. It is a development that is completely independent of who happens to be president of another country. Trump has advisors for every step.
Is this submarine parked in the middle of a forest?
@Martin McFly: Very sneaky. Last place you’d look for it.
Meanwhile Iran‘s revolutionary guards reveal plan to annihilate Israel.
@Qfire: Its unfortunate that this has been largely ignored by the worlds press. You can be sure if Israeli leaders issued a statement promising to wipe an Islamic country off the map ( for the crime of Islamic nationalism) there’d be a media feeding frenzy.
@Clifford Brennan: Maybe it’s largely ignored because it’s not true? Israel wouldn’t be the first to make up a story to justify spending on their war machine.
@Jim Buckley Barrett: It was very decent of the Ayatollah & the commander from the IRGC to agree to appear in the Israeli propaganda video – not to mention the supporting cast of 1000′s of Iranians and all filmed at an Islamic religious venue too. Those Israelis have it sussed. Also: cop on.
North Korea is not going to be told not to have Nuclear Weapons by a leader whose country has had them for many many years, come in and blasted leaders and sent their soldiers to Hassan Hussein [having supplied him with weaponry] and when it did not suit them anymore… raped and pillaged Iraq. When are people going to think US are the good guys ? NKorea just flexing muscles.
That man is actually frightening. He’s like a little boy playing with his toys.
As you do before talks about nuclear arms enrichment.
have your say