What is the ECB’s leeway? The Governing Council of the European Central Bank (ECB) meets on Thursday to determine the path of key rates in the coming months. With soaring prices of raw materials and agricultural commodities, on the one hand, the fear of Europe tipping into recession, on the other, the institution has little room for action. And the plan sketched out six weeks ago, based on a halt to QE and a first rate hike before the end of the year, seems compromised.
Impact on GDP
” The end of the PEPP should not be questioned, but it may be premature to fix the end of the APP already “, estimated the cabinet Oddo BHF at the beginning of the week. The interest rate on the main refinancing operations and that on the deposit facility should remain unchanged, at 0% and -0.50% respectively. Alongside these announcements, the ECB will present its new inflation projections, which will not fail to incorporate the recent surge in the price of oil. The barrel of Brent flirted with the 140 dollar mark on Monday, very close to its summer 2008 record. Growth forecasts should logically be revised downwards. Preliminary estimates quoted by the chief economist of the ECB, Philip Lane, evoke a negative impact of one point of GDP but this forecast remains fragile.
The rise in prices will materialize in the figures of theamerican inflation, scheduled for 2:30 p.m. The consumer price index is expected to pick up again, now approaching 8% year on year, to 7.8% in February from 7.5% in January. Excluding volatile data, such as food and energy prices, inflation is expected at 6.4% over one year, after 6% in January. Two other statistical meetings are scheduled in the United States: the weekly jobless claims and the budgetary situation in February.
Inflation and the strategy of European energy independence will finally be discussed during the Summit of Versailleswhich will be held on March 10 and 11, in the presence of European Heads of State and Government.
On the values front, Bollore, Eurazeo, JCDecaux, Houses of the world, Ruby, Savencia, SQLI and Steve will publish their annual results, while TFF Group will reveal its revenue for the third quarter of 2021-2022.
CP