020 7898 0500It was a day of very few surprises as far as the ECB announcement went. Interest rates were left unchanged by policymakers and they said that this would remain the case for the foreseeable future. What was perhaps surprising, was their refusal to change their economic forecasts. Having said that, data has been a little mixed of late; this week alone we have seen some healthy (but slowing) growth figures across a range of sectors, but German business confidence is on the wane.
The euro weakened against sterling and the dollar as a result but this is likely welcomed by Draghi and his colleagues. The eurozone has experienced problems with export growth because of euro strength against the dollar, so a move in the opposite direction could actually benefit the economy. The ECB also acknowledged that inflation is not rising as expected, so that’s certainly something to keep our eyes on in the coming weeks and months.
Today will be dominated by the UK and US GDP growth rate figures for the first quarter of 2018, but we will see the German unemployment rate for April; eurozone business confidence; and services, industrial and economic sentiment for the same month. If these come in below expectations then the euro could slide further.
