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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/jun/27/bank-of-england-financial-stability-draghi-ecb-google-fine-europe-janet-yellen-business-live
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| Version 2 | Version 3 |
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| Bank of England releases financial stability report, as consumer confidence dives – business live | Bank of England releases financial stability report, as consumer confidence dives – business live |
| (35 minutes later) | |
| 10.10am BST | |
| 10:10 | |
| The rise in the euro has pushed Europe’s stock markets down. | |
| Ever index is now in the red, with the Stoxx 600 losing 0.6%. | |
| A stronger euro isn’t great news for eurozone exporters, of course. But the key point is that Draghi is being optimistic -- that’s no reason to dump shares. | |
| Neil Wilson of ETX Capital says traders shouldn’t be too skittish: | |
| Draghi suggested inflation is becoming more sustainable and deflationary forces have been replaced by reflationary forces. Importantly he suggests deflationary forces are external, temporary shocks and the ECB can overlook. That’s what happens when you open the taps on a massive stimulus programme. The question is whether the Eurozone would survive without the QE support. | |
| Draghi sounded more circumspect on that front, arguing that he is confident that monetary policy is working but still needs to remain very loose. Again it’s a stretch to describe it as hawkish – Draghi is simply affirming that loose monetary policy is working without significant adverse consequences and therefore should be maintained. He’s not advocating tightening any time soon. | |
| 9.45am BST | |
| 09:45 | |
| The European Commission just dropped a loud hint that the Google antitrust fine is coming this morning.... | |
| This tweet is from EC press officer Yizhou Ren: | |
| Press conference with Cssr @vestager on an antitrust case, today @ 12h CET - follow online here: https://t.co/5RXFkZgna0 | |
| 9.43am BST | |
| 09:43 | |
| Mario Draghi’s bullish talk has also sent the pound down against the euro, shedding 0.4% to €1.133. | |
| That means one euro buys 88.2p, up from 87.9p yesterday. Good news for eurozone holidaymakers heading to the UK this summer, but a blow to Britons planning a continental jaunt. | |
| Here’s Reuters take on Draghi’s speech: | |
| The euro zone still needs “considerable” monetary support from the European CentralBank even as its economy recovers steadily and inflation picks up, ECB President Mario Draghi said on Tuesday. | |
| “All the signs now point to a strengthening and broadening recovery in the euro area. Deflationary forces have been replaced by reflationary ones,” Draghi said at the ECB’s annual policy forum in Sintra, Portugal. | |
| “However, a considerable degree of monetary accommodation is still needed for inflation dynamics to become durable and self-sustaining.” | |
| Updated | |
| at 9.44am BST | |
| 9.32am BST | 9.32am BST |
| 09:32 | 09:32 |
| Here’s a chart showing how the euro spiked as Draghi spoke in Portugal: | Here’s a chart showing how the euro spiked as Draghi spoke in Portugal: |
| 9.26am BST | 9.26am BST |
| 09:26 | 09:26 |
| Euro jumps as Draghi speaks | Euro jumps as Draghi speaks |
| Oooh. The euro is rallying as Mario Draghi tells the ECB Forum that reflationary pressures in the eurozone are building, as the economy recovers. | Oooh. The euro is rallying as Mario Draghi tells the ECB Forum that reflationary pressures in the eurozone are building, as the economy recovers. |
| The single currency has jumped by half a cent against the US dollar, to $1.1235, with Draghi sounding more upbeat and hawkish than expected. | The single currency has jumped by half a cent against the US dollar, to $1.1235, with Draghi sounding more upbeat and hawkish than expected. |
| Draghi has also told his audience that “a considerable degree” of stimulus is still needed in the eurozone, and that the ECB must be ‘prudent’ in how it unwinds it. | Draghi has also told his audience that “a considerable degree” of stimulus is still needed in the eurozone, and that the ECB must be ‘prudent’ in how it unwinds it. |
| Draghi has previously talked about a ‘substantial degree’ of help being needed, and Arne Petimezas, analyst at AFS Group in The Netherlands, thinks this wording is significant. | Draghi has previously talked about a ‘substantial degree’ of help being needed, and Arne Petimezas, analyst at AFS Group in The Netherlands, thinks this wording is significant. |
| *DRAGHI SAYS CONSIDERABLE DEGREE OF STIMULUS STILL NEEDED >>> downgrade from "very substantial" stimulus still needed | *DRAGHI SAYS CONSIDERABLE DEGREE OF STIMULUS STILL NEEDED >>> downgrade from "very substantial" stimulus still needed |
| 9.16am BST | 9.16am BST |
| 09:16 | 09:16 |
| Not for the first (or last) time, Mario Draghi’s message is that his policies are delivering the goods.... | Not for the first (or last) time, Mario Draghi’s message is that his policies are delivering the goods.... |
| Draghi: We can be confident that our policy is working and its full effects on inflation will gradually materialise | Draghi: We can be confident that our policy is working and its full effects on inflation will gradually materialise |
| Draghi: Our policy needs to be persistent and we need to be prudent in how we adjust its parameters to improving financial conditions | Draghi: Our policy needs to be persistent and we need to be prudent in how we adjust its parameters to improving financial conditions |
| Draghi: Since January 2015 and the announcement of the expanded asset purchase programme euro area GDP has grown by 3.6% | Draghi: Since January 2015 and the announcement of the expanded asset purchase programme euro area GDP has grown by 3.6% |
| Draghi: Between 2016-2019 we estimate that our monetary policy will have lifted inflation by 1.7 percentage points, cumulatively | Draghi: Between 2016-2019 we estimate that our monetary policy will have lifted inflation by 1.7 percentage points, cumulatively |
| 9.14am BST | 9.14am BST |
| 09:14 | 09:14 |
| Draghi: Recovery is strengthening and broadening | Draghi: Recovery is strengthening and broadening |
| Over in Sintra, European Central Bank president Mario Dragh is giving the keynote speech at the ECB’s Forum now. It’s being streamed here. | Over in Sintra, European Central Bank president Mario Dragh is giving the keynote speech at the ECB’s Forum now. It’s being streamed here. |
| Draghi says there are clear signs of a “strengthening and broadening” recovery underway in the eurozone area. | Draghi says there are clear signs of a “strengthening and broadening” recovery underway in the eurozone area. |
| There have been 16 straight quarters of growth in the euro area, he says. | There have been 16 straight quarters of growth in the euro area, he says. |
| But this nascent growth needs to become sustainable, and that means higher productivity growth. | But this nascent growth needs to become sustainable, and that means higher productivity growth. |
| Central bankers face an unusual challenge today, Draghi continues -- they face growth that is “above trend and well distributed across the euro area”. | Central bankers face an unusual challenge today, Draghi continues -- they face growth that is “above trend and well distributed across the euro area”. |
| But at the same time, inflation is more muted than you’d expect. | But at the same time, inflation is more muted than you’d expect. |
| To decide the right approach (ie, when to cut the ECB’s stimulus package), you need to understand the causes, Draghi cautions. | To decide the right approach (ie, when to cut the ECB’s stimulus package), you need to understand the causes, Draghi cautions. |
| And Draghi’s assessment is that monetary policy is working to build up reflationary pressures. | And Draghi’s assessment is that monetary policy is working to build up reflationary pressures. |
| But it’s being slowed by external price shocks, slack in the labour market, and a change in how the labour market and inflation interact, he concludes. | But it’s being slowed by external price shocks, slack in the labour market, and a change in how the labour market and inflation interact, he concludes. |
| Follow live coverage of the #ECBForum from 10:00 CET. President Draghi opens today’s proceedings https://t.co/4LXrqmHsUc pic.twitter.com/h0m9YumIbb | Follow live coverage of the #ECBForum from 10:00 CET. President Draghi opens today’s proceedings https://t.co/4LXrqmHsUc pic.twitter.com/h0m9YumIbb |
| 9.01am BST | 9.01am BST |
| 09:01 | 09:01 |
| Five things to watch for from the Bank of England | Five things to watch for from the Bank of England |
| The FT’s Chris Giles has pulled together a list of key issues to watch for today, when the Bank of England releases its twice-yearly report on financial stability. | The FT’s Chris Giles has pulled together a list of key issues to watch for today, when the Bank of England releases its twice-yearly report on financial stability. |
| Here’s a flavour: | Here’s a flavour: |
| More here. | More here. |
| UK financial stability report: five things to watch - https://t.co/AZhUB5NCuz | UK financial stability report: five things to watch - https://t.co/AZhUB5NCuz |
| 8.30am BST | 8.30am BST |
| 08:30 | 08:30 |
| UK consumer confidence hit by hung parliament and house prices | UK consumer confidence hit by hung parliament and house prices |
| UK consumer confidence has plunged since June’s general election, as the shock of a hung parliament hits households. | UK consumer confidence has plunged since June’s general election, as the shock of a hung parliament hits households. |
| It gives the Bank of England a fresh headache as it considers the health of the UK economy, ahead of today’s Financial Stability Report. | It gives the Bank of England a fresh headache as it considers the health of the UK economy, ahead of today’s Financial Stability Report. |
| Pollsters at YouGov found that UK citizens are fretting about political uncertainty, rising inflation, falling real wages, and the state of the housing market. | Pollsters at YouGov found that UK citizens are fretting about political uncertainty, rising inflation, falling real wages, and the state of the housing market. |
| YouGov found there was a “pronounced collapse in consumer confidence following the election”. The sight of Theresa May losing her majority sent its consumer morale index sliding to 105.2 from 109.1. | YouGov found there was a “pronounced collapse in consumer confidence following the election”. The sight of Theresa May losing her majority sent its consumer morale index sliding to 105.2 from 109.1. |
| For June as a whole, consumer confidence dropped to 106.9, its second-lowest level since the summer of 2013. | For June as a whole, consumer confidence dropped to 106.9, its second-lowest level since the summer of 2013. |
| Stephen Harmston, head of YouGov, says that the UK housing slowdown is causing particular alarm (Nationwide says prices have fallen for the last three months) | Stephen Harmston, head of YouGov, says that the UK housing slowdown is causing particular alarm (Nationwide says prices have fallen for the last three months) |
| “The hung parliament seems to have further dampened consumers’ spirits, which were already sinking following the continued squeeze on household finances. | “The hung parliament seems to have further dampened consumers’ spirits, which were already sinking following the continued squeeze on household finances. |
| “But the real cause for alarm will be the cooling of the property market, as this is one of the key things that has propped up consumer confidence over the past few years.” | “But the real cause for alarm will be the cooling of the property market, as this is one of the key things that has propped up consumer confidence over the past few years.” |
| More here: | More here: |
| Updated | Updated |
| at 8.46am BST | at 8.46am BST |
| 8.01am BST | 8.01am BST |
| 08:01 | 08:01 |
| The agenda: Bank of England's financial stability report | The agenda: Bank of England's financial stability report |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| We’re facing central bank overload today, with monetary policy chiefs speaking in London, and the Portuguese town of Sintra. | We’re facing central bank overload today, with monetary policy chiefs speaking in London, and the Portuguese town of Sintra. |
| All eyes will be on the Bank of England, as its powerful Financial Policy Committee releases its latest report followed by a press conference with Governor Mark Carney. | All eyes will be on the Bank of England, as its powerful Financial Policy Committee releases its latest report followed by a press conference with Governor Mark Carney. |
| The FPC, which is charged with maintaining financial stability, could order banks to rein in their riskier lending, following growing fears that consumer borrowing is getting out of hand. | The FPC, which is charged with maintaining financial stability, could order banks to rein in their riskier lending, following growing fears that consumer borrowing is getting out of hand. |
| The Bank could also tell City banks to start restocking their capital buffers, having previously told banks to lend more after the Brexit vote. | The Bank could also tell City banks to start restocking their capital buffers, having previously told banks to lend more after the Brexit vote. |
| Meanwhile in sunny (ish) Sintra, the European Central Bank is holding its annual forum. We’ll be hearing from Mario Draghi, ECB president, who last night told students in Portugal that his massive stimulus scheme was creating employment. | Meanwhile in sunny (ish) Sintra, the European Central Bank is holding its annual forum. We’ll be hearing from Mario Draghi, ECB president, who last night told students in Portugal that his massive stimulus scheme was creating employment. |
| Challenged over the Bank’s huge money-printing programme, Draghi declared that: | Challenged over the Bank’s huge money-printing programme, Draghi declared that: |
| “The millennials that found a job because of our policy, I’m pretty sure they are okay” [with the ECB’s policies] . | “The millennials that found a job because of our policy, I’m pretty sure they are okay” [with the ECB’s policies] . |
| And he also denied that savers had been unfairly treated, arguing that they’re also benefitting from the recovery, as: | And he also denied that savers had been unfairly treated, arguing that they’re also benefitting from the recovery, as: |
| “Recessions are not good for anybody, savers or non-savers, | “Recessions are not good for anybody, savers or non-savers, |
| Draghi defends #ECB stimulus saying jobs matter most for equality https://t.co/TWdIRoWxLh pic.twitter.com/cwRML1qh1Z | Draghi defends #ECB stimulus saying jobs matter most for equality https://t.co/TWdIRoWxLh pic.twitter.com/cwRML1qh1Z |
| It could be a busy morning, as there’s a strong chance that Google will be hit with a whopping fine this morning, of over €1bn, for breaching Europe’s competition rules. | It could be a busy morning, as there’s a strong chance that Google will be hit with a whopping fine this morning, of over €1bn, for breaching Europe’s competition rules. |
| That would end a long inquiry into whether Google used its dominant search engine to unfairly promote its Google Shopping service, but could spark an angry response from America. | That would end a long inquiry into whether Google used its dominant search engine to unfairly promote its Google Shopping service, but could spark an angry response from America. |
| And then tonight, the world’s most powerful central banker, Federal Reserve chair Janet Yellen, is speaking at London’s Royal Academy. We’re promised a “wide-ranging discussion about global economic issues.” | And then tonight, the world’s most powerful central banker, Federal Reserve chair Janet Yellen, is speaking at London’s Royal Academy. We’re promised a “wide-ranging discussion about global economic issues.” |
| On the corporate front, retail group Debenhams and car hire chain Northgate are reporting results, plus there are retail sales figures in the UK and consumer confidence stats from America to keep us on our toes. | On the corporate front, retail group Debenhams and car hire chain Northgate are reporting results, plus there are retail sales figures in the UK and consumer confidence stats from America to keep us on our toes. |
| The agenda | The agenda |
| 9am BST: Mario Draghi gives keynote speech at the ECB Forum in Sintra | 9am BST: Mario Draghi gives keynote speech at the ECB Forum in Sintra |
| 10.30am BST: Bank of England releases financial stability report | 10.30am BST: Bank of England releases financial stability report |
| 11am BST: BoE governor Mark Carney’s press conference | 11am BST: BoE governor Mark Carney’s press conference |
| 11am BST: CBI’s UK retail sales figures | 11am BST: CBI’s UK retail sales figures |
| 3pm: US consumer confidence report | 3pm: US consumer confidence report |
| 6pm: Janet Yellen gives the British Academy ‘President’s Lecture’ | 6pm: Janet Yellen gives the British Academy ‘President’s Lecture’ |
| Updated | Updated |
| at 8.35am BST | at 8.35am BST |