The index of producer prices in the euro area in March showed the maximum reduction of 22 years in annual terms, giving another reason to believe that the ECB cut interest rates at the next meeting on Thursday. The index of prices fell by 0.7% m / m and 3.1% y / y - a sharp decline since February 1987, reported the European Union statistics agency Eurostat. This was the eighth consecutive monthly declines. The fall in prices exceeded the forecasts of economists: -0.6% m / m and -2.9% y / y. However, the rate of decline for February were revised up to 0.4% m / m and 1.7% y / y from 0.5% m / m and 1.8% y / y, published in April.
These are likely to support expectations that the ECB will reduce its stake to a minimum 1.0% to 1.25% after its next meeting on Thursday. While economists also expect that the ECB has announced the introduction of innovative measures to increase liquidity in the market, such as an increase in its refinancing operations, and refuses to cut rates further, despite the weak economy. The ECB lowered its rate from 4.25% in October, but its monetary policy dampened less aggressively than did the U.S. Federal Reserve System and the State Bank of England, which reduced the rate is even lower and introduced other measures to increase business activity.
Eurostat data showed that the index of producer prices in the euro area excluding the price of fuel and construction fell by 0.4% m / m and 1.7% y / y in March, the maximum annual decline since the start of the record in the year 19900.
These are likely to support expectations that the ECB will reduce its stake to a minimum 1.0% to 1.25% after its next meeting on Thursday. While economists also expect that the ECB has announced the introduction of innovative measures to increase liquidity in the market, such as an increase in its refinancing operations, and refuses to cut rates further, despite the weak economy. The ECB lowered its rate from 4.25% in October, but its monetary policy dampened less aggressively than did the U.S. Federal Reserve System and the State Bank of England, which reduced the rate is even lower and introduced other measures to increase business activity.
Eurostat data showed that the index of producer prices in the euro area excluding the price of fuel and construction fell by 0.4% m / m and 1.7% y / y in March, the maximum annual decline since the start of the record in the year 19900.
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