European Central Bank policymakers set the stage for a June 10 showdown over the future of their emergency bond purchases when they met in April but stopped short of discussing their next move, the account of their meeting showed on Friday.
The ECB, which is already providing record support, has helped the recession-hit eurozone economy through its worst crisis to date. But a robust recovery, coupled with a jump in inflation, will be forcing policymakers to debate whether to start dialling back the ECB’s €1.85 trillion pandemic emergency purchase programme.
Arguments are stacking up fairly evenly on both sides, suggesting a difficult decision next month.
The latest wave of Covid-19 is receding, economies are reopening and growth is already surging, indicating that the “emergency”, a key premise of the ECB’s current support measures, is coming to an end.
But the 19-country currency bloc will need another year to grow back to its pre-crisis level, borrowing costs are already getting uncomfortably high, the euro’s strength is concerning and inflation, the ECB’s primary focus, will continue to languish below its target for years to come.
“The monetary policy meeting in June would provide the next opportunity to conduct a thorough assessment of financing conditions and the inflation outlook,” the ECB said in the account of the April 22 meeting.
Policymakers made it clear that even after PEPP, the ECB would provide plenty of support for years to come.
“Ample monetary policy support remained crucial beyond the pandemic period in order to support inflation and return it to the inflation aim,” the ECB added.
Even as they recounted risks, policymakers appeared pleased with how the market had reacted to their March decision to speed up bond purchases.
The monetary policy meeting in June would provide the next opportunity to conduct a thorough assessment of financing conditions and the inflation outlook
“Recent financial market developments had had a positive effect on financing and financial conditions in the euro area. Sovereign yields and spreads had remained compressed and stock prices had risen, while the euro exchange rate had appreciated only slightly,” the account said.
However, they seemed especially concerned about the firming of the euro against the dollar.
“It was underlined that a further appreciation of the exchange rate could have adverse implications for the inflation outlook,” the ECB added.
PEPP is set to expire next March at the earliest, but the scheme, now running at around €80 billion a month, will not end overnight and could take several quarters to taper.
Several conservative policymakers, including Klaas Knot of the Netherlands and Martins Kazaks from Latvia, have already made the case for starting to step back from PEPP as the recovery gets under way.
But winding down the emergency scheme will be far from the end of ECB support and stimulus is likely to be transferred to the bank’s Asset Purchase Programme, which operates under more rigid rules.
The key decision facing policymakers in June will be whether to signal this “rotation” from PEPP to APP is starting or conclude that emergency conditions remain.
They will also need to decide on the volume of bond purchases over the coming quarter and whether the recent rise in bond yields, fuelled in part by rising US borrowing costs, is warranted by the outlook.
Barbie
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The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
UAE currency: the story behind the money in your pockets
SPECS
Nissan 370z Nismo
Engine: 3.7-litre V6
Transmission: seven-speed automatic
Power: 363hp
Torque: 560Nm
Price: Dh184,500
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INDIA SQUAD
Rohit Sharma (captain), Shikhar Dhawan (vice-captain), KL Rahul, Suresh Raina, Manish Pandey, Dinesh Karthik (wicketkeeper), Deepak Hooda, Washington Sundar, Yuzvendra Chahal, Axar Patel, Vijay Shankar, Shardul Thakur, Jaydev Unadkat, Mohammad Siraj and Rishabh Pant (wicketkeeper)
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
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- Solo riders only, no passengers allowed
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Batti Gul Meter Chalu
Producers: KRTI Productions, T-Series
Director: Sree Narayan Singh
Cast: Shahid Kapoor, Shraddha Kapoor, Divyenndu Sharma, Yami Gautam
Rating: 2/5
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
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Brief scores:
Liverpool 3
Mane 24', Shaqiri 73', 80'
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Lingard 33'
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Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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Suggested picnic spots
Abu Dhabi
Umm Al Emarat Park
Yas Gateway Park
Delma Park
Al Bateen beach
Saadiyaat beach
The Corniche
Zayed Sports City
Dubai
Kite Beach
Zabeel Park
Al Nahda Pond Park
Mushrif Park
Safa Park
Al Mamzar Beach Park
Al Qudrah Lakes
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
FROM%20THE%20ASHES
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The biog
Simon Nadim has completed 7,000 dives.
The hardest dive in the UAE is the German U-boat 110m down off the Fujairah coast.
As a child, he loved the documentaries of Jacques Cousteau
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Graphene is a single layer of carbon atoms arranged like honeycomb.
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.
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It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.
But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties.
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
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THE BIG MATCH
Arsenal v Manchester City,
Sunday, Emirates Stadium, 6.30pm
'Nope'
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MANDOOB
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House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
- Fife, Scotland
- Tower Hamlets, London
FIXTURES (all times UAE)
Sunday
Brescia v Lazio (3.30pm)
SPAL v Verona (6pm)
Genoa v Sassuolo (9pm)
AS Roma v Torino (11.45pm)
Monday
Bologna v Fiorentina (3.30pm)
AC Milan v Sampdoria (6pm)
Juventus v Cagliari (6pm)
Atalanta v Parma (6pm)
Lecce v Udinese (9pm)
Napoli v Inter Milan (11.45pm)
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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