• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • EAPF criticised for water company investments

    August 10, 2022

  • Welsh pension fund confirms £50m investment in clean energy

    August 10, 2022

  • Inflation ‘disastrous’ for local services, warns LGA

    August 10, 2022

  • Consultation opens into care charging reforms

    August 9, 2022

  • ADASS survey: ‘worst fears confirmed for adult social care’

    August 5, 2022

  • GMCA to unlock funds for home energy-efficiency upgrades

    August 4, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

No good excuses for the decline in inflation, says Draghi

0
  • by James Bevan
  • in James Bevan
  • — 27 Aug, 2014

jb-banner-grey
ECB chief Mario Draghi gave a big speech at Jackson Hole, Wyoming on Friday.
There were two big ideas to come out of the speech:
• The first is that the ECB will do more to halt falling inflation.
• The other is that the ECB probably can’t do it on its own, and that the destructive effects of austerity (fiscal policy outside the direct control of the ECB) need to be reversed somehow.
In a series of off-the-cuff remarks, Draghi went much further than before to acknowledge there were no good excuses for the decline in inflation and inflation expectations (Euro-area inflation slowed to 0.4% this month, a fraction of the ECB’s goal of just under 2%); acknowledging a significant real deterioration that can’t just be explained by some temporary problems, like the situation in Ukraine or food prices.
Stocks rose, the euro fell and bond yields dropped to record lows on Monday as the comments fanned speculation the ECB is finally heading for a form of monetary stimulus it has long avoided.
Draghi previously said that a worsening of the medium-term inflation outlook would provide a reason for broad-based asset purchases. Investors’ attention will be on the Eurozone inflation data out this Friday, consensus expects a further contraction to 0.3%, from 0.4% in the prior month.
The ECB has already announced a list of easing measures in June, including a targeted long-term financing operation (TLTRO); under this the euro-zone central bank will give euro-zone banks access to up to EUR850bn worth of cheap loans. Against this backdrop, it is widely believed that the ECB will not provide any additional QE stimulus at its meeting next week on the 4th September.
As such, TLTRO usage will be under greater scrutiny. The first TLTRO operation is scheduled for September 18th, with policy makers scheduled to lend banks as much as 400 billion euros in the first stage of a funding program tied to real-economy loans. Officials are also “fast moving forward” with a program for buying asset-backed securities, and meanwhile the euro area should also benefit from a weaker currency.

James Bevan is chief investment officer of CCLA, specialist fund manager for charities and the public sector. CCLA launched The Public Sector Deposit Fund in 2011 to meet the needs of local authorities and other public sector organisations. You can follow James on twitter @jamesbevan_ccla

Share

You may also like...

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • 151 BRIEFS – WHAT’s NEW?

    • Inflation ‘disastrous’ for local services, warns LGA
    • Consultation opens into care charging reforms
    • ADASS survey: ‘worst fears confirmed for adult social care’
    • GMCA to unlock funds for home energy-efficiency upgrades
    • Levelling up committee calls for urgent boost to social care funding
  • Room151’s LGPS Roundtables

    Biodiversity
    Valuations & Risk
    LGPS Women

  • Room151’s LGPS Roundtables

    Biodiversity
    LGPS Women
    Valuations & Risk
  • Latest tweets

    Room151 6 hours ago

    Which LGPS pools and funds are attending the LGPS Investment Forum on Nov 2 & the LGPS Private Markets Forum on Nov 1st? Answer here: lnkd.in/eDHU8tuy pic.twitter.com/D3gd63Rh7F

    Room151 23 hours ago

    LGPS and levelling up: nothing to fear but fear itself: There have been a number of objections to government plans for LGPS funds to invest 5% of their assets in local projects. But George Graham says these objections can be[...] dlvr.it/SWL7vt pic.twitter.com/ebwBEkZTy4

    Room151 23 hours ago

    George Graham @SYpensions @bordertocoast channels his inner FDR in a call for local government pension funds to avoid the fear factor and embrace levelling up #LGPS #localgov room151.co.uk/local-governme…

    Room151 2 days ago

    Changes to rules on capital receipts raise wider questions: Stephen Kitching argues that DLUHC’s latest rule changes are part of a series following on from revisions to MRP guidance and the purchase of commercial property. He questions whether… dlvr.it/SWGqKC pic.twitter.com/Ycr5hWZDPk

    Room151 5 days ago

    ‘No ifs, no buts’: the Bank of England continues its battle with inflation: Partner Content: CCLA Investment Management’s Robert Evans discusses the MPC’s 0.5% increase in the Official Bank Rate and its ongoing commitment to the 2% inflation target… dlvr.it/SW7SNC pic.twitter.com/ryOzYRSNA9

    Room151 6 days ago

    DLUHC changes rules on flexible use of capital receipts: The levelling up secretary has written to all council leaders to amend the rules concerning the flexible use of capital receipts to fund transformation projects. In his letter, Greg Clark[...] dlvr.it/SW3jyX pic.twitter.com/KEhSSaMITl

    Room151 7 days ago

    Local audit and financial reporting: let’s take back control: Mazars’ Suresh Patel suggests three steps that auditors and council finance teams should take to help get financial reporting and local audit back on track. Following my recent appearance… dlvr.it/SW0PfV pic.twitter.com/miL7pjukce

    Room151 1 week ago

    The case for residential investment: income, impact and resilience: Partner Content: Emma Gullifer from Columbia Threadneedle discusses the options for pension funds looking to invest in residential property including the Build-to-Rent market.… dlvr.it/SVzKwN pic.twitter.com/hdgZ4zKt4H

    Room151 1 week ago

    Draft accounts: delays continue despite deadline dash: Dan Bates discusses the latest data on the publication of local authority accounts and examines why so many councils missed the 31 July deadline. Sunday 31 July 2022 was the[...] dlvr.it/SVx2ZT pic.twitter.com/gdELhD3Yis

  • Register to become a Room151 user

  • Previous story West Sussex £1.2bn investment contract open to other councils
  • Next story Benn reignites equalisation debate

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares