The eurozone must follow the examples of the UK, US and Japan by turning to the printing presses to avoid the threat of damaging deflation, according to an assessment by a leading economic think-tank, reports the Independent.
The latest outlook report from the Organisation for Economic Co-operation and Development (OECD) shows the UK registering the fastest improvement in prospects for this year and next, thanks to a broadening economic recovery and a push from the government’s Help to Buy housing initiative.
However, the OECD blamed a slowdown in emerging markets for dragging on the world’s recovery as it trimmed its global growth estimates for next year from 4 per cent to 3.6 per cent.
ECB official calls asset purchases an option
A top ECB official said the bank could make asset purchases if needed, as eurozone policy makers increasingly float the prospect of deploying a tool that is commonly used by other major central banks but stirs deep divisions in Europe, reports the Wall Street Journal.
US could tip world back into recession, warns OECD
The US was yesterday told it poses a major threat to the global recovery amid anxiety over Washington’s handling of the world’s largest economy, reports the Daily Mail.
The OECD said the row over the US debt ceiling and fears over the winding down of central bank support for the economy have already hit growth.
Gold benchmarks said to be reviewed in UK rates probe
The FCA is reviewing gold benchmarks as part of its wider probe of how global rates are set, a person with knowledge of the matter said, reports Bloomberg.
The FCA review is preliminary and hasn’t risen to the level of a formal investigation, said the person, who asked not to be identified because the matter isn’t public. The person declined to say which gold benchmarks were under scrutiny.
Two big investors cut Irish debt holdings
Two major international investment groups have taken advantage of steep rises in Irish bond prices on the back of the country’s economic turnround, to cut their holdings in the government’s debt, reports the Financial Times.
US-based Loomis Sayles and France’s Carmignac Gestion have both reduced their exposure as the country prepares to exit its international bailout programme. Irish government bonds have produced returns of more than 10 per cent this year – and more than 100 per cent since mid-2011.
US funds place big bets on euro bank recovery
US fund managers have been making multibillion-dollar bets on the recovery of banks in the eurozone over the past four months in the belief that the region’s stuttering economic recovery will soon start to gather steam, reports the Financial Times.
Help to Buy scheme out of reach of lower earners
Low to middle-income families are unlikely to be able to use the government’s flagship Help to Buy scheme across two-thirds of the UK, since the monthly mortgage repayment costs would be too expensive, new research shows, reports the Guardian.