Edinburgh, Scotland: The Bank of England blasted its new government bond buying programme in a bid to fire up economic growth and inflation. A welcome omen is that the Eurozone’s economy grew by 0.3% in Q4 2014.
The Bank of England’s Bank Rate celebrates its sixth birthday at 0.5%. In this ancient city the committee decided to keep its key policies unchanged. The main refinancing rate remained at 0.3% the ECB announced the addition of sovereign debt to its growing basket of assets (QE). While welcome, neither QE nor more traditional monetary policy will alone resolve distinct differences between the regions’ member states. Nor can they ‘fix’ the politics. But they do buy time, which seems at last to be working, with the region’s economy is performing much better than was hoped even a few months ago.
Household consumption and investment grew 0.4%q/q while net trade contributed strongly on the back of a robust performance from the export sector. Germany and Spain grew the fastest and with France’s data so far this year looking a bit rosier, it may be ready at long last to chip in to the Eurozone’s recovery. The second estimate of Eurozone GDP in Q4 2014 confirmed the economy grew by 0.3%q/q. Although the figure was below the UK’s 0.5%q/q, it was an improvement on the previous quarter. Growth was broad-based with help coming from home and abroad.
