The International Monetary Fund (IMF) has today urged the Euro zone to adopt quantitative easing measures due to ‘worryingly low’ inflation rates.
The International institution put forward the case for the European Central Bank (ECB) to bring in unusual measures amidst fears of possible deflation.
The IMF claim that “[QE] would boost confidence, improve corporate and household balance sheets, and stimulate bank lending. Overall, it holds the potential to have a significant impact on demand and inflation,” and if that is the case it could be a positive move for business.
The ECB has already taken steps to combat this problem. With European inflation sitting at 0.5% (well below the 2% target) interest rates from the ECB were plunged into negative territory so as to encourage bank lending and try and make sure that banks don’t hoard this money.
With these measures already in place and the possibility of further asset buying measures this could be an absolutely massive boost for European business and garner massive rewards for those looking at trading in the EU.
With the Euro zone still only just emerging from recession, prices and labour remain relatively cheap but there are positive signs that the EU is turning things around.
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