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☆ Europe should brace for ‘harsh decisions’ if Trump is re-elected, says ECB’s Lagarde
▼ + stars: | 2024-01-30 | by ( Hanna Ziady | ) edition.cnn.com time to read: +3 min

London CNN —Europe should prepare for possible threats to its economy — including new US tariffs on its exports — if Donald Trump returns to the White House, according to European Central Bank President Christine Lagarde. “Let us prepare for potential tariffs, for potential harsh decisions that would be unexpected. The transatlantic relationship was strained during Trump’s first term, not least by a tit-for-tat trade spat between Washington and Brussels. That dispute saw the United States impose tariffs on EU steel and aluminum, to which the EU responded with tariffs on $3 billion worth of US goods, including whiskey, motorcycles and denim. The United States is the EU’s biggest source of foreign direct investment.

Persons: Donald Trump, Christine Lagarde, Mr Trump, ”, CNN’s Richard Quest, ” Lagarde, Trump, Trump’s, Lagarde, “ Organizations: London CNN, White, European Central Bank, United, EU, Republican, Ukraine, Russia, Trade, Trump, French, France, NATO Locations: Europe, United States, Washington, Brussels, Paris

It's a far cry from the peak of 10.6% in October 2022 as an energy crisis left Europe's households and businesses struggling to make ends meet. The new figure is close to the European Central Bank's inflation target of 2% following a rapid series of interest rate hikes dating to summer 2022. Energy prices plunged 11.5% from November 2022. Meanwhile, the larger eurozone economy has stalled this year, even shrinking 0.1% in the July-to-September quarter, according to Eurostat. ___This story has been corrected to show that the eurozone economy shrank 0.1% in the third quarter, not grew by that amount.

Persons: ”, Andrew Kenningham, Christine Lagarde, ” Lagarde, That's, upended, ” Carsten Brzeski Organizations: Eurostat, ECB, Capital Economics, Energy, OECD, ING Locations: Europe, Germany, Europe's, Russia, Moscow, Ukraine

FRANKFURT, Germany (AP) — The head of the European Central Bank said Monday that interest rates will stay high enough to restrict business activity for “as long as necessary” to beat back inflation. Christine Lagarde said rates would stay high because upward pressure on prices “remains strong” in the 20 countries that use the euro currency. “And yes, we know that 30% — 30% — of the households in the member states have variable interest rate mortgages. Analysts think the ECB may be done raising rates given signs of increasing weakness in the European economy. Higher rates are central banks' chief weapon against excessive inflation.

Persons: Christine Lagarde, “, ” Lagarde, ”, Lagarde Organizations: European Central Bank, European, ECB, Analysts, Bank of England, U.S . Federal Reserve Locations: FRANKFURT, Germany, Russia, Ukraine

☆ Europe economy: The recession may already be over
▼ + stars: | 2023-07-28 | by ( Mark Thompson | ) edition.cnn.com time to read: +3 min

Spain reported GDP growth of 0.4%, just a shade weaker than in the first quarter. Second-quarter GDP figures for the euro area as a whole will be published on Monday. “We expect a modest expansion in eurozone GDP after two weak quarters,” Oxford Economics said in a research note on Friday. Only 7% of forecasters expect the euro area to suffer another recession, or two consecutive quarters of contraction, between now and the first quarter of 2024. Separately, survey data released Monday showed that business activity in the euro area contracted at the fastest pace in eight months in July.

Persons: “, Christine Lagarde, ” Lagarde Organizations: CNN, “, French, Oxford, European Central Bank, headwinds, ”, ECB Locations: France, Spain, Germany, China

☆ Italy may have dodged a ‘pasta strike’ but food inflation is still high. Here’s why
▼ + stars: | 2023-06-29 | by ( Anna Cooban | ) edition.cnn.com time to read: +8 min

But it shelved the plan, citing “noticeable” falls in pasta prices. Pasta prices dipped in May compared with April, though provisional official data released Wednesday showed that they ticked up again this month. Broader food price inflation, albeit slowing, is still high in Italy and elsewhere. Concerns have grown that retailers and food producers are deliberately keeping prices high to boost profit margins — claims they strenuously deny. That meant they had “locked in higher prices” for longer, he told a gathering of central bankers in Portugal.

Persons: Danni Hewson, AJ Bell, Pasta, Remo Casilli, Andrew Bailey, “, Mintec, Andrew Woods, ”, Jack Allen, Reynolds, That’s, Christine Lagarde, ” Nestlé, ” Lagarde, Jeremy Hunt, —, Cristiano Laurenza, ” — Valentina Di Donato, Hanna Ziady Organizations: London CNN, CNN, ”, Bank of England, Labor, European Union, Capital Economics, European Central Bank, Wednesday, Competition, Markets Authority, Unione Italiana Food Locations: Italian, Italy, United Kingdom, United States, France, Germany, Russia, Ukraine, Cecco's, Fara San Martino, Portugal, Europe, European, “, Sweden

☆ Why some central banks are rushing to hike rates now
▼ + stars: | 2023-06-25 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

Even though inflation is slowing in many countries after more than a year of interest rate hikes, it remains above the 2% level many central banks are targeting. Raising interest rates is the primary tool central bankers have at their disposal to get inflation down. That’s why the Federal Reserve paused interest rate hikes at its June meeting after 10 consecutive hikes since last March. It’s harder for central banks to clamp down on inflation when it becomes sticky, or persistently high. That’s because research shows that inflation, if unaddressed, could become even more sticky and harder for central banks to control with rate hikes.

Persons: Andrew Bailey, Bailey, don’t, Christine Lagarde, ” Lagarde, it’s, Michael Bordo, “, ” Organizations: New, New York CNN, ” Bank of England, Federal Reserve, European Central Bank, Center for Monetary, Rutgers University, CNN Locations: New York

☆ Inflation in Europe drops to lowest level since Russia invaded Ukraine
▼ + stars: | 2023-06-01 | by ( Hanna Ziady | ) edition.cnn.com time to read: +2 min

London CNN —Inflation in Europe has fallen to its slowest pace since Russia invaded Ukraine, bolstering the case for the region’s central bank to bring interest rate hikes to an end soon. That’s the lowest rate of inflation since February 2022, when Moscow launched a full-scale invasion of its neighbor, sending global energy prices soaring. The pace of food price rises eased for the second month running in May, while energy prices actually fell. Inflation has fallen sharply in Germany, France, Italy and Spain, national data published Wednesday showed. Separate data published Tuesday showed lending by banks in the euro area stagnated further in April, with loans to households barely growing at all.

Persons: Price, Christine Lagarde, ” Lagarde, ” Franziska Palmas, ”, Bert Colijn Organizations: London CNN, Russia, European Central Bank, ECB, US Federal Reserve, Bank of, Capital Economics, ING Locations: Europe, Ukraine, Moscow, Germany, France, Italy, Spain, Bank of England, Palmas

☆ Christine Lagarde says she has ‘huge confidence’ that the US won’t default on its own debt
▼ + stars: | 2023-04-16 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +3 min

New York CNN —Christine Lagarde, president of the European Central Bank, said she has “huge confidence” the US will not allow the country to default on its own debt during an interview on CBS’ “Face the Nation” Sunday. “I just cannot believe that they would let such a major, major disaster happen,” Lagarde said, adding if a debt default did happen, it would have a “very, very negative impact” both in the US and around the world. “(The US is) a major leader in economic growth around the world. It cannot let that happen,” Lagarde said. It now expects economic growth to slow from 3.4% in 2022 to 2.8% in 2023.

☆ Interest rate hikes are 'yet to bite,' IMF head says
▼ + stars: | 2023-01-20 | by ( Anna Cooban | ) edition.cnn.com time to read: +2 min

Kristalina Georgieva, managing director of the IMF, said on Friday that conditions in the world economy were “less bad” than feared a few months ago, but further pain could be on the way. Addressing a panel at the World Economic Forum in Davos, Switzerland, Georgieva said interest rate hikes by the world’s major economies had “yet to bite,” and could increase unemployment — a situation that cash-strapped governments could find hard to respond to adequately. That could weigh on global growth, which the IMF forecast in October would slump to 2.7% this year, down from 3.2% in 2022. Even so, economists and business leaders have signaled in recent weeks that the world economy may be at a hopeful turning point. Lagarde said that economies are moving from “defense mode…to competition mode.”“So something must be getting better,” she added.

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