News and Reviews European Economic Zone

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News and Review of European Economic Zone (UK)

 

Two officials Supports BoE rate hike

Wednesday, August 20, 2014

 

Two senior Bank of England unexpectedly chose to begin raising interest rates this month, becoming the first central bank official to do so in more than three years, according to the results of the BoE meeting minutes Wednesday. Martin Weale and Ian McCafferty - 9 members outside the Monetary Policy Committee at the Bank of England - chose to raise its benchmark interest rate 0.75% of the UK to be 0.5%, a move that could revive the expectations of the majority support a rate hike before the end of the year. Before the BoE meeting on 6-7 August, most economists estimate the difference in sound mengeniai interest rates. But the tone on a quarterly economic review by the BoE on August 13 and make an estimate of the BoE poll results will result in a decision unanimously to keep interest rates at a record low.

 

The BoE cut its forecast for the growth rate of wages for the year 2014 as many as half and said the central bank would like to see the prospect of a prolonged wage growth before tightening policies, although BoE Governor Mark Carney added that this does not mean the rate of wage growth should exceed inflation before the interest rate can go up. Minutes on Wednesday showed that Weale - who support a rate hike in 2011, and oppose any policy instructions, and McCafferty, believes that the decline in the unemployment rate indicates a stronger outlook for wage growth rate. "Given the impact of monetary policy too late, we want to anticipate pressure on the labor market by raising interest rates before," said Weale danMcCafferty. Other MPC members thought that the inflation pressure is still not enough to take risks commensurate increase interest rates.

Most economists do not expect rate hikes before February next year. This view was reinforced by data showing the first annual decline in the level of wages in 5 years in the second quarter of 2014, and also more beasr decline of inflation expectations in July. But a number of economists expect the BoE will start tightening policy earlier.

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News and Review of European Economic Zone (Germany)

 

The German government Remain Optimistic on growth

Wednesday, August 20, 2014

 

The German government maintains its forecast that Europe's largest economy will grow by 1.8% by the end of this year even after contracting in the second quarter, according to one German state secretariat for economy on Wednesday. "According to our estimates of growth does not need to be corrected," said Rainer Sontowski. "Geopolitical Risk suppress the German economy, but the trend is still positive economic basis," he added, related to the crisis in the Ukraine and the Middle East. Sontowski said the performance of the economy in the third quarter will determine the next government growth forecasts for this year, is expected to be released in October.

 

Many economists cut their estimates on German GDP for 2014 to 1.5% after the German economy to contract as much as 0.2% in the second quarter due to weak foreign trade sector, which usually sustains the growth rate, and a decrease in the level of investment the construction sector. German Economy Minister Sigmar Gabriel has said that the German economy will probably expand at the back this year.

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News and Review of European Economic Zone (Germany)

 

German Manufacturing Activity Slightly Below Estimates In August

Thursday, August 21, 2014

 

German manufacturing and services activity is slightly below analysts' estimates in August, signaling that the country with the largest economy in Europe can withstand the risk of ongoing tensions with Russia and the eurozone stagnation.

 

Initial readings for the two industry PMI index is down to 54.9 from 55.7 in July, in the report by Markit Economics in London. Previous economists surveyed by Bloomberg News predicted to decline to 54.6. A reading above 50 indicates expansion.

 

German GDP contracted for the first time in more than a year in the second quarter, prompting the Bundesbank to warn that the rebound in the estimate will occur for the second half at this point again in doubt. At a time of rising tensions with Russia over their support for the separatist Ukraine which has hurt the outlook for the euro zone economy failed to grow in the three months to June, Markit said that Germany is still solid fundamentals.

 

"PMI data available for the third quarter so far at this point seem to be able to recover the GDP of a weakening that occurred during the second quarter," said Oliver Kolodseike, an economist at Markit. "However, there are still concerns over differences in economic trends," the service sector "is able to cover some of the weakness in the manufacturing sector," he said.

 

Manufacturing index fell to 52 in August from 52.4, while the index of activity in service industries fell to 56.4 from 56.7 in July, according to a report today.

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News and Review of European Economic Zone

 

Eurozone Business Growth Slows in August

Thursday, August 21, 2014

 

Euro zone business activity expands slowly in August, restrained by weakening factory output second largest economy in the region.

 

Markit report showed the euro zone composite PMI, which measures activity in the private sector, fell to 52.8 in August from 53.8 in July. Which indicates the 18-nation bloc's economy experienced a slight slowdown during the summer and will probably continue until the 3rd quarter.

 

Rob Dobson, senior economist at Markit, said that the data signaled the 3rd quarter growth may not be strong enough to push the euro zone employment figures that are needed to reduce the unemployment rate. Eurozone unemployment rate at a level of 11.5% in June.

 

The survey results also indicate if the Markit euro zone growth in August was driven by service sector firms, which reported the fastest growth in new jobs since May 2011, while manufacturing activity weakened reported, with growth at slowest pace in 14 months.

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News and Review of European Economic Zone (UK)

 

The level of UK Retail Sales Decline in July

Thursday, August 21, 2014

 

The level of UK retail sales grow at a slower pace than expected in July, according to government data on Thursday. A separate report showed a deficit in the month of July for the second year, melajutkan bad start in the current tax year and make government more distant to achieve its fiscal targets. The volume of retail sales rose 0.1% in July to reach an annual growth rate of 2.6% sebeasr, according to the Office for National Statistics. Economists estimate the level of retail sales to rise by 0.4%. The ONS said downward pressure on retail sales mostly come from retail sales is not a store and gas station.

 

Consumers in the UK have become the driving economic recovery that began last year, helped by the low level of inflation which has eased the pressure on their purchasing power. However, the rate of wage growth is still very weak. Prices in stores fell by 0.9% after a flat in June. Survey of the British Retail Consortium earlier this month showed annual growth rate of retail sales in the UK increased rapidly in July. The ONS said public sector financial deficit, outside intervention in the financial sector, amounting to 239 million pounds, compared with a deficit of 1,047 billion pounds in July 2013, economists predict outcome thin surplus of 50 million pounds.

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News and Review of European Economic Zone (Italy)

 

Italy Prepare Two Bond Auction Next Week

Friday, August 22, 2014

 

Italy will again have access to borrow money to investors next week. Country that is recovering from the debt crisis became the only country in the euro zone that have the schedule of debt issuance in 2014.

 

Italian government will hold two auctions of bonds. The first auction falls on next Tuesday (26.08), in which the bonds issued is a new coupon series known as CTZ. Term to maturity in the month of August 2016 release of the initial premises volume of 2.5-3 billion euros. While the second auction scheduled on Thursday in the form of fixed income bonds (fixed-rate) is known as well as one or two series are not fixed income debt securities (floating-rate) is called CCTeu. The details of the new auction will be announced on Monday next.

 

According to the guide book debt auction Italy in the third quarter, the government will issue a new series of bonds this year. Most likely a tenor of 10 years BTP will mature in December 2024 to come.

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News and Review of European Economic Zone

 

Draghi: ECB Ready to Act If Needed

Friday, August 22, 2014

 

President of the European Central Bank, Mario Draghi, convinced the stimulus measures announced in the month of June, and the weakening of the euro, will push the euro zone economic recovery, but he also stressed the ECB prepared to act further if needed. Speaking at the annual Jackson Hole conference, Draghi mengatkan confirm the recent growth of data recovery block 18 of the country as a whole is still weak, and promised to maintain accommodative policy for longer.

 

Previous ECB cut its benchmark rate to a record low of 0.15% in June, and impose a -10% deposit rate to inject funds into the flagging economy, with inflation rates below 1% in the last 10 months. Draghi said inflation itself deteriorates, which may be a reference to provide further stimulus.

 

"Board members will recognize these developments, and with its mandate will use all available tools if necessary to ensure price stability in the medium term" Draghi said on the issue of inflation

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News and Review of European Economic Zone (Germany)

 

Euro Trying to Recover After Germany's Data

Friday, August 22, 2014

 

The euro moved away from 11-month lows versus the dollar on Thursday after the German private sector growth data were better than expected, but it does not much alter the expectations of further monetary stimulus.

 

German private sector grew for the 16th consecutive month in August, which indicated that Europe's largest economy will probably expand strongly in the 3rd quarter after a surprise contraction in the 2nd quarter. While the data showed stagnation French business activity amid rise in private sector growth.

 

"German data released better than expected, it is clear that the momentum of the economy is lower than the previous month. Though the euro showed a slight rebound, it will still be limited," said Yujiro Goto, currency analyst at Nomura. "The euro is still in the pattern of gradual decline."

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News and Economic Review Zone Asia (China)

 

China provide funds 20 billion yuan to Build Sector Flight

Monday, August 25, 2014

 

China is really serious to fix the infrastructure in the country's economy. One way is to invest heavily in the civil aviation sector.

 

Through state enterprises Civil Aviation Investment Fund or the manager of the international airport of Beijing, China's capital disbursed 20 billion yuan ($ 3.25 billion), equivalent to Rp38 trillion to build the aviation industry. The amount of money that will be used to fund the construction of a new airport, the creation of a commercial flight zone, set up a budget airline and a variety of other purposes.

 

Large investments necessary to meet the high demand for flight services in recent years. As many as 754 million people use airplanes last year, an increase of 86% compared to the record year of 2008. Construction of the airport is also increasing rapidly, one of which is the construction of a new air facility in the southern part of Beijing which takes about $ 14 billion.

 

Meanwhile, as many as 62 cities have to build special economic zones to support the aviation sector. This includes the construction of facilities and provision of spare parts logistics business run by big players sort of Airbus and Embraer SA

Two low-cost airlines started operating this year, including a subsidiary of China Eastern Airlines. Not only that, the government also has received more than 100 proposals establishment of new businesses in the aviation sector. That is, so many private investors who have looked at this industry as a potential land.

 

Of total Chinese investment in the aviation sector, as many as 20% will be managed by Capital Airports Holding HNA Group. While some private companies will hold the rest.

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News and Review of European Economic Zone

 

BoJ Kuroda: ECB will Take Action If Deflation Risk Appears

Monday, August 25, 2014

 

Bank of Japan Haruhiko Kuroda does not expect the euro zone to fall into deflation, however he believes that the European Central Bank will take steps to eliminate these risks if there is, according to one Italian newspaper. Kuroda, in an interview with Corriere della Sera, said that his main concern is the crisis in Ukraine, the tense relations with the West, Russia and trigger trade sanctions are hurting the economy in Europe and Russia. However, the euro zone bloc kemungkain will not fall into the abyss of deflation over the long-term inflation expectations are still positive and the region's economy is gradually recovering, albeit in a very slow pace, Kuroda said in an interview released on Monday.

 

"Therefore, I believe that the ECB President Mario Draghi will do everything necessary to prevent the risk of deflation if it appeared in Europe," he said. In the most explicit comments to date, Draghi said last Friday that the ECB will use all available policy tools to meenghadapi rate of inflation that is too low if the policy package adopted last June failed to stimulate demand. Kuroda mengatkan Japanese experience shows how dangerous deflation and added that the Bank of Japan (BoJ) will extend the quantitative easing program until his passing even the fiscal year that began in April 2015 if inflation fails to reach the target of 2% at the time.

 

"With Japan's inflation rate of 1.3% on the day, we've been on half way," said Kuroda. Japan's economy, he says, was recovered this quarter after a slump in the second quarter due to higher sales tax in April, which encourages consumers to advance purchases before a tax increase. "The level of consumption is back to normal levels at this time and for the third quarter we estimate a recovery in GDP. So the government will proceed with the sales tax increase back in October."

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News and Review of European Economic Zone

 

ECB's Draghi Pushing Toward Closer To QE

Monday, August 25, 2014

 

Draghi European Central Bank just pushed closer towards quantitative easing.

 

With the data on the euro this week, indicating that getting inflation weakest since 2009, President of the ECB using the highest-profile central bank conference in Jackson Hole, Wyoming, to warn that investors are betting on price "is on display dropped significantly."

 

Stock markets and bond yields rose and the euro fell as the comments have sparked speculation that the ECB will eventually go into a form of monetary stimulus that has long they avoid. Draghi has previously said that if the inflation outlook deteriorate in the medium term it will give a reason for the widespread asset purchases.

 

Speech on August 22 "has become a significant event and marks the turning point of the rhetoric of the ECB," said Philippe Gudin, chief European economist at Barclays Plc in Paris. "We think that recent economic developments have increased the chance of QE at the next step of action by them."

 

Euro zone inflation slowed to a level of 0.3% this month, was well below the ECB's target level of 2%, according to the median estimate in a Bloomberg survey ahead of a report dated August 29. Other data this week in the predictions will show the unemployment rate held near a record high and the level of economic confidence dropped. Eurozone GDP will stagnate in the second quarter

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News and Review of European Economic Zone (France)

 

French President ask prime minister to replace his Cabinet

Monday, August 25, 2014

 

French President reportedly asked Manuel Valls prime minister to form a new government in the near future. According to news reported quickly by Dow Jones Newswires, the attitude of the president Francois Hollande is a response to criticism aimed at him by the ministers in the cabinet Valls.

 

At the end of last week, the French economy minister, Arnaud Montebourg and education minister, Benoit Hamon openly criticized the measures taken by the president. Both the senior cabinet members asked the central government to focus more on reducing the burden of the deficit and help businesses in its discretion. Montebourg and Hamon also criticized Hollande not being able to increase the number of domestic demand due to the reluctance to cut the tax levy for residents.

 

Feeling furious, Hollande immediately asked the prime minister to overhaul the cabinet. The new cabinet team will be announced on Tuesday, in which some predicted strategic position changed after the airings of friction between state officials. It is unknown whether the French president will also follow the recommendations related to the pattern of subordinate economic policy.

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News and Review of European Economic Zone (UK)

 

BBA: UK Mortgage Approvals Down in July

Tuesday, August 26, 2014

 

Banks in the UK approved mortgage amount less last month than in June, as the tightening mortgage rules imposed from the end of April to make a little sluggish housing market, according to industry data on Tuesday. British Bankers' Association said its member banks approved 42,792 loans for house purchase in July, down from a 3-month high in June as many as 43,180 and is under the average in the first 3 months of 2014 is slightly below 47,000.

 

Housing loan approval is still up about 12% compared to July last year, although the number of net new mortgage lending in July - about 821 million pounds - the lowest level since January. Britain's Financial Conduct Authority requires banks to implement inspection purchasing power tougher on housing loans since the end of April, and the Bank of England to impose new restrictions on how much money can be borrowed by the British public in June.

"The process of housing loan approvals are currently being lethargic after the release of the Mortgage Market Review, to the level of around 40,000 approvals per month," according to a statement the BBA. Data from the Bank of England to the level of the UK mortgage approvals will be released on 1 September.

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News and Review of European Economic Zone

 

European stocks opened Diverse

Tuesday, August 26, 2014

 

European stock markets opened on a variety of trading session on Tuesday (26/08). Eurozone monetary policy issues and conflicts in the Ukraine became the main focus of market participants.

 

Europe's main stock index has enjoyed a rise in the previous session due to indications of monetary easing by the European Central Bank (ECB). Investors believe that Mario Draghi and colleagues will soon launch a new stimulus package to promote economic region. Even so, the presence of the stimulus does not necessarily help the pace of the recovery. Injection of funds into the financial system on the one hand was able to accelerate the wheels of business, but on the other hand could also create problems of inflation in Germany and was not big enough to help rescue Portugal. Now investors can only wait for what kind of monetary package will be issued by the ECB in the meeting.

 

In different places, the President of Ukraine, Petr Poroshenko and Russian President Vladimir Putin is scheduled to meet this week. Meetings between these two state officials will discuss the election schedule and the latest developments in the border region. Market participants will look at the dynamics in Eastern Europe because of a very large effect on the stability of Europe both in terms of politics, economics and security.

 

From the corporate sector, several companies are set to report earnings disadvantages include WPP, Danske Bank and British outsourcing company, Bunzl. The Russian government will also release its GDP growth report for the second quarter of 2014 within the next few hours.

 

Britain's FTSE started the session with an increase 0,42% at 6803.60 position. Germany's DAX index was minus 0:37% at 9477.78 and France's CAC 40 fell 0:14%. While the IBEX 35 10688.50 flat area at the beginning of the opening. The euro exchange rate is in the position of 1.32048 per dollar.

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News and Review of European Economic Zone (Italy)

 

Italian Bond Sales Predicted Success

Tuesday, August 26, 2014

 

In the next few hours, the Italian government will sell the debt to investors. Investment banks from that country, UniCredit, estimates coupon bond issuance will be welcomed by investors.

 

"In the midst of the current market situation, it is natural if we see a good response from investors," commentator UniCredit in its report. According to the financial institutions, short-term debentures Italy offer spreads are relatively large and attractive than other debt instruments.

 

Italian government will hold two auctions of bonds. The first auction falls on Tuesday (26.08), in which the bonds issued is a new coupon series known as CTZ. Term to maturity in the month of August 2016 release of the initial premises volume of 2.5-3 billion euros. While the second auction scheduled on Thursday (28.08) in the form of fixed income bonds (fixed-rate) is known as well as one or two series are not fixed income debt securities (floating-rate) is called CCTeu. The details of the new auction will be announced on Monday next.

 

According to the guide book debt auction Italy in the third quarter, the government will issue a new series of bonds this year. Most likely a tenor of 10 years BTP will mature in December 2024 to come.

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News and Review of European Economic Zone (France)

 

Confidence levels in the French Factory Drop to Lowest Level 13 Months

Wednesday, August 27, 2014

 

The level of confidence in the French factories fell to its lowest level in 13 months in August, adding that the signs that the economy may be struggling to grow after stagnating in the first half.

 

Manufacturing sentiment index slipped to 96, it was the lowest level since July 2013, from 97 in the previous month, the statistics bureau reported by INSEE France on this day in Paris. These results are in accordance with the median estimate in a Bloomberg survey. In a separate report showed business confidence index also fell.

 

The latest evidence of the economic downturn came in the middle of France French president Francois Hollande agree with the radical changes in government savings. Economic failed to expand in the last two quarters and a survey last week showed manufacturing contracted for a fourth month in August.

 

"The political turmoil in France has become a bad sign for the economy that is struggling in the short term," said Jennifer McKeown, an economist at Capital Economics in London, said in a note before the data is published. "In addition, cracks in the government will reduce the trust public are already limited in the ability of the government to restore the economy into its path.

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News and Review of European Economic Zone (UK)

 

British Economic Growth Toward Highest Since 2007

Thursday, August 28, 2014

 

British Chambers of Commerce said the UK economic growth this year would be the highest since 2007, but said policymakers should ensure that growth does not take place a snap.

 

BCC raised its forecast for UK economic growth in 2014 to 3.2% from 3.1%, and for 2015 to 2.8% from 2.7% previously. However, the BCC added economic growth will slow to 2.5% in 2016 According to BCC the UK's gross domestic product is too dependent on consumer spending, and the British government said it is necessary to encourage investment and exports.

 

For interest rates, although said to be difficult to predict after data showed a drop in the unemployment rate is not matched by growth in wages, but the BCC expects the Bank of England will raise interest rates in the first quarter of 2015, the interest rate is expected to rise by 0.25% to 0 , 75%, and will continue to rise gradually to reach 2.25% in the fourth quarter of 2016, but the BCC said a rate hike could dampen consumer spending

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News and Review of European Economic Zone (Spain)

 

Spain Growth Improves Central Decline In Consumer Price

Thursday, August 28, 2014

 

Domestic demand has driven economic growth in Spain is faster in the last quarter, while consumer prices extended losses in the month of August where it has sparked a debate about another round of stimulus from the European Central Bank.

 

Spain's GDP rose by 0.6% from the first quarter as household spending and investment improved, reported by the National Statistics Institute in Madrid today, it confirms their first estimate. Consumer prices fell by 0.5% in August from a year ago, it was the sharpest drop since October 2009, the statistics bureau said in a separate report.

 

Two years after applying for assistance to the EU, Spain has become one of the fastest growing economies in the eurozone. The slowdown in block 18 countries, which included their main trading partners, is currently putting the recovery at risk and threaten the state to thwart efforts to reduce the budget deficit and the fourth largest second highest unemployment rate in the Euro zone.

 

"The outlook for Spain is still associated with those who are in the whole euro area," said Timo Del Carpio, an economist at RBC Capital Markets in London. "As the decline in domestic demand in the release, demand from outside need to gather speed to support the recovery more broad-based and independent."

 

Consumer prices fell slightly in August rather than a decrease of 0.6% is predicted by economists in a Bloomberg survey. However, it was the second consecutive monthly decline at an annual rate, and the third in the last six months.

 

In the midst of Prime Minister Mariano Rajpy melongarkan austerity measures in a country with the fourth largest economy rate in the euro zone, consumer spending grew by 0.7% from the previous quarter, when it grew 0.5%, the INE said. Investment rebounded, rising 0.5% after a 0.7% decline in the first quarter.

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News and Review of European Economic Zone (Germany)

 

Unemployment Increase in Germany

Thursday, August 28, 2014

 

The number of unemployed in Germany rose unexpectedly in August as the euro zone recovery is stagnant and tensions with Russia worsen the outlook for the country is the largest economy in Europe. The number of unemployed rose as much as 2,000 people into 2,901 million in August, according to the Federal Labor Agency based in Nuremberg today. Economists forecast a decline of 5,000 people. The unemployment rate was flat at 6.7%, the lowest in more than 2 decades. Bekontraksi German economy in the last quarter and how strong the German economy can rebound very important for the euro zone. Inhibition of recovery and slow the rate of inflation in the euro zone have prompted European Central Bank President Mario Draghi signaled the possibility of a move to quantitative easing.

 

"The German economy is not as good as at the beginning of the year," said Michael Holstein, an economist at DZ Bank AG in Frankfurt. "The labor market is still strong, but if the economic outlook deteriorating, we will see the impact on employment levels towards the end of the year." Total unemployment rose as much as 3,000 in Germany and the western region fell by 1,000 in eastern Germany, according to a report today. While a decrease of 0.2% in the last quarter German GDP largely due to the weather, the current outlook is plagued by increasing international sanctions against Russia for its support to separatists in Ukraine.

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News and Review of European Economic Zone (UK)

 

House Prices in the UK Back Up

Friday, August 29, 2014

 

After slowing quite sharply in July, the growth of house prices in the UK are now back to accelerate. Nationwide Building Society reported in UK house prices rose 0.8% in August from the previous month, while from August 2013 house prices rose 11%. While the rise in house prices in July month-to-month revised up to 0.2% from 0.1% the previous release. Average house prices in the UK in August to reach £ 189,306.

 

Based on the Nationwide index, an increase in August home price increases to 16 consecutive months, and is showing signs of a bubble in the housing market. UK economic growth is positive in the quarter ketiha expected to raise home prices even further. Bank of England Governor, Mark Carney, last month said the rapid pace of growth in the housing market is the biggest risk in the UK economy.

 

In its quarterly inflation report, the Bank of England signaled bunag will not raise rates before 2015 due to the growth of real wages stagnant. BOE rate hike worries will provide financial pressure for the household, but at the same time tngkat low interest rates make housing loans become cheaper, which can continue to raise the price of the house at the end of this year. In the first half of this year the rate of increase in house prices slowed slightly after the BOE to tighten regulations for housing loans.

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News and Review of European Economic Zone

 

Eurozone Inflation Eases In accordance estimates in August

Friday, August 29, 2014

 

Eurozone inflation rate slowed as expected to a 5-year low in August, according to data on Friday, but most likely will not urge the European Central Bank to take a policy intervention next week. Consumer inflation in the euro zone rose only about 0.3% year on year in August, the smallest increase since October 2009, according to European Union statistics office, Eurostat. Where the inflation rate slowed to 0.4% in July, has been under what is called by ECB President Mario Draghi as the 'danger zone' which is 1% since October last year.

 

Slowing the rate of inflation increase the number of central banks as concerns the ECB tries to respond to the euro zone recovery is inhibited, which is facing new obstacles as a result of economic sanctions imposed on Russia in July as a result of its involvement in the conflict in Ukraine. The ECB is not expected to take any steps at a policy meeting later on September 4, according to the source of the ECB earlier this week. The ECB is likely to be waiting. The decline in the inflation rate in August, led by a decline of 2.0% in energy prices and the price of food, alcohol, and tobacco fell as much as 0.3% for the second consecutive month in August.

In a separate report, Eurostat said the jobless rate in the euro zone does not change according to the estimate of 11.5% for the second consecutive month in July, with the unemployment rate is at 18.4 million people in the economy worth 9.6 trillion euros. The slow recovery in the level of unemployment, slow growth, slow the rate of inflation is a major concern and the European Union Brussels, the ECB urged the government to accelerate the implementation of structural reforms, which are considered essential for recovery of Europe.

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News and Review of European Economic Zone

 

ECB's Nowotny worried about the Euro Zone Economy

Friday, August 29, 2014

 

Officials of the European Central Bank Ewald Nowotny worried about the eurozone economy, which it says shows a poor outlook signals. Asked about inflation and unemployment, he said "I am also worried. What we have achieved today is not a great success. We estimate a recovery in the euro zone and we have to have a better 2014 than 2013, but still weaker than expected." The ECB is not likely to take new policy measures next week except August inflation data released on Friday showed the euro zone sank to the significant deflation, ECB sources said.

 

Nowotny declined to discuss monetary policy approach, related to the quiet period ahead of ECB policy meeting next week. "I can not give exact figures forecast the euro zone according to the ECB projections next week, but it's no secret that the economy is likely to have a poor outlook," he said on Thursday night. He said he expects the ECB will use the loan tenure of 4 years will be available from next month for a trigger level of bank loans.

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News and Review of European Economic Zone (Germany)

 

German Print Budget Surplus in the First Half

Monday, September 1, 2014

 

Germany reported a budget surplus of 16.1 billion euros (12.71 million pounds) in the first half of 2014, indicating the financial strength of Germany when the Berlin faces pressure to loosen fiscal policy and increase spending to boost the slow rate of growth in Europe. Data from the Federal Statistics Office showed that the federal government surplus print as many as 4.0 billion euros in the first half of this year, the deficit does not print the first time since 1991 the overall surplus - including federal, state, and local as well as the social security system - reaching 1.1 % of gross domestic product (GDP). Such data make Germany into a budget surplus three times in a row in 2014 Last year the surplus covers 0.3% of the GDP, while in 2012 only 0.1%.

 

Such data can add to the pressure on Germany to do more to encourage growth rate separately in Europe. In his last speech last month, European Central Bank President Mario Draghi said that the government could play a more important role in stimulating growth in Europe. Neighboring countries Germany, France and Italy that chancellor Angela Merkel also urged to do more to boost growth, for example by cutting taxes and sustain the level of public investment spending is weak.

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News and Review of European Economic Zone (UK)

 

Number of UK Mortgage Approvals Slightly Below Estimates In July

Monday, September 1, 2014

 

The number of mortgage approvals in the UK is slightly lower than economists forecast in July, indicating that the market maintains some momentum after strict lending rules introduced this year.

 

The number of approvals fell to 66.569 from 67.085 in June, in the report by the Bank of England on this day. The figure compared with the median estimate of 19 economists for a reading of 66,600. Net borrowings at home rose to 2:35 billion pounds ($ 3.9 billion) in the last month, it was the highest since July 2008.

 

Recent surveys indicate that the property market may be easing as the price increase has strained financial buyers, strict affordability tests come into effect in April as part of the Mortgage Market Review, and estimates of rate hikes by the BOE that have prevented the buying interest. In a report last week, Nationwide Building Society said that the outlook for housing "fraught with uncertainty" after the value of the home up 11% on last year.

 

"The housing market continues to look slowly break away from the strict rules," said Rob Wood, an economist at Berenberg Bank in London. "There are still loans that were current at the lowest level in its history, the UK's economic recovery is not driving the increase in the amount of debt, but the increase is still continuing suggest that the recovery in the country is still on track."

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News and Review of European Economic Zone

 

Euro Zone Manufacturing Slowing Enlarge Possible QE From ECB

Monday, September 1, 2014

 

Euro zone manufacturing activity slowed more than previously estimated in August as Italian output contracted, it added that the signs of economic recovery in the region may need another stimulus boost from the European Central Bank.

 

Purchasing managers' index fell to 50.7 from 51.8 in July, in the report by Markit Economics in London on this day. But reading above 50 indicates expansion, the results slightly below a preliminary reading in August to 50.8 level. Italian manufacturing unexpectedly shrank in the last month, while the growth in the German plant grown under the initial estimate.

 

Today's report comes after ECB President Mario Draghi signaled that the economy in the bloc of 18 countries may need more stimulus to avoid a series of waves of deflation. Inflation slowed to a friction of the mandate of the ECB in the last month and investors bet the price will be low, a condition previously cited by Draghi as justification for large-scale asset purchases.

 

"Eurozone manufacturing is clearly gaining life very difficult at this time as rising geopolitical tensions which adds uncertainty where it is still a menantangkan conditions in many countries," said Howard Archer, an economist at IHS Global Insight in London. In addition, he predicted that officials will withstand extreme action this week, "it seems more likely that the ECB will eventually do some form of QE it is," he said.