The European Central Bank kept its stimulus package and interest rates unchanged on Thursday, as it said the pace of purchases under its pandemic bond-buying programme will be “significantly higher” in the next quarter.
ECB president Christine Lagarde held the pandemic emergency purchase programme (Pepp) at €1.85 trillion ($2.2 trillion), following a €500bn boost in December, and reiterated that it will run until at least March 2022, or "until it judges that the coronavirus crisis phase is over".
“Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects purchases under the Pepp over the next quarter to be conducted at a significantly higher pace than during the first months of this year,” the ECB said.
“The Governing Council will purchase flexibly according to market conditions and with a view to preventing a tightening of financing conditions.”
Europe has been hit hard by the pandemic with the region still facing a raft of restrictions as the number of Covid-19 cases remains high. Ms Lagarde said in January that the lender hopes 2021 remains the year of recovery, with the first phase of the rebound loaded with uncertainty as the vaccination drive gets underway and the second centred on countries opening up.
The ECB's pledge to ramp up its buying of government debt in the coming months will help to contain rising bond yields that have threatened to derail the region’s economic recovery and soothe investor concerns.
The new strategy came after a jump in global government bond yields driven partly by the fast economic recovery in the US from the crisis, which has boosted inflation expectations.
Yields on long-term government bonds have risen by about 0.3 per cent since the start of the year in the eurozone, with the ECB keen to avoid any premature tightening of credit at a time when the economy is fragile.
Ms Lagarde said the rise in market borrowing rates posed "a risk" to the recovery and said “if left unchecked, could translate into a premature tightening of financial conditions for all sectors of the economy. This is undesirable".
European bonds rose on Thursday following the ECB statement, with Italian securities leading the move higher and 10-year yields dropping 10 basis points.
Meanwhile, the ECB also held the deposit rate at minus 0.5 per cent and will continue providing long-term loans to banks.
Andrew Kenningham, chief Europe economist at Capital Economics, said the bank's statement was "more dovish" than expected.
Naeem Aslam, chief market analyst at Avatrade, said the dovish narrative pushed the euro lower against the dollar.
The currency extended gains after the report, rising 0.4 per cent to a high of $1.1973.
Mr Aslam said the only element in the ECB’s strategy that could be considered slightly hawkish, was the fact the lender thinks the Pepp may not be fully used if conditions are favourable.
“The envelope need not be used in full” if favourable financing conditions can be maintained, the ECB said.
“Equally, the envelope can be recalibrated if required to maintain favourable financing conditions to help counter the negative pandemic shock to the path of inflation,” it added.
Mr Aslam said this particular statement will “provide support for the euro which has been under tremendous pressure lately".
If you go
The flights
Return flights from Dubai to Santiago, via Sao Paolo cost from Dh5,295 with Emirates.
The trip
A five-day trip (not including two days of flight travel) was split between Santiago and in Puerto Varas, with more time spent in the later where excursions were organised by TurisTour.
When to go
The summer months, from December to February are best though there is beauty in each season
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
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Match info
Huddersfield Town 0
Chelsea 3
Kante (34'), Jorginho (45' pen), Pedro (80')
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Harry%20%26%20Meghan
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MATCH INFO
Chelsea 1 (Hudson-Odoi 90 1')
Manchester City 3 (Gundogan 18', Foden 21', De Bruyne 34')
Man of the match: Ilkay Gundogan (Man City)
The%20specs
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The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
more from Janine di Giovanni
Killing of Qassem Suleimani
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Director: Kangana Ranaut, Krish Jagarlamudi
Producer: Zee Studios, Kamal Jain
Cast: Kangana Ranaut, Ankita Lokhande, Danny Denzongpa, Atul Kulkarni
Rating: 2.5/5
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UAE currency: the story behind the money in your pockets
SHAITTAN
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UAE currency: the story behind the money in your pockets
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Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
UAE currency: the story behind the money in your pockets
Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
