Some European economies are still recovering after crisis

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Some European economies are still recovering after crisis

September 10, 2018 - 16:00
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Ten years after collapse of Lehman Brothers and start of global financial crisis, many developed countries are still recovering, Reuters reports. This will become more obvious at the meeting of European Central Bank on Thursday.

Photo © Gerd Altmann, CC0 1.0

Ten years after collapse of Lehman Brothers and start of global financial crisis, many developed countries are still recovering, Reuters reports. This will become more obvious at the meeting of European Central Bank on Thursday.

Some key economies of euro area still have not reached their pre-crisis sizes, despite of decade of stimulus.

However, at first glance, the economy looks quite healthy. Growth is observed for six years. Employment level is record high. Wages are finally rising. And even inflation is getting closer to target level. This is enough for ECB to start reducing by half its bonds purchasing program from October.

Meanwhile, investors will unlikely notice that, as this program change is already accounted in stock prices. They will rather concentrate on slow inflation pace, political instability and possible weakening of economy among escalating trade war. This might disturb ECB’s plans and result in lowering some economic projections.

Most likely, interest rates will be at record low levels until next summer. This will give ECB some time to think.

Bank of England will most likely keep its current monetary policy unchanged until UK fully exits EU.