Central Banks Struggle for Exit as Recovery Weakens

September 23, 2010 04:39

The recovery from the worst global downturn since World War II is proving weaker than projected, the Organization for Economic Cooperation and Development said this month.

By Scott Lanman and Jana Randow – Sep 22, 2010

at Bloomberg.com


‘The U.S. Federal Reserve said Sept. 21 it’s prepared to ease monetary policy further if needed and has highlighted asset purchases as an option. The Bank of England yesterday signaled policy makers are moving closer to adding stimulus. The European Central Bank extended liquidity support for banks into 2011 on Sept. 2.’

‘“Economies are slowing, so the central banks will have to do an awful lot more to help them,” said Stuart Thomson, international fixed income fund manager at Glasgow-based Ignis Asset Management, which manages about 70 billion pounds ($110 billion). “It’s a done deal that more quantitative easing is coming and then the only question now is when we get it.”’

‘Recent data suggest the economy of the Group of Seven nations could grow at an annualized rate of about 1.5 percent in the second half, below the 1.7 percent previously envisaged and the 3 percent rate of the first six months of the year, the Paris-based OECD said Sept. 9. The International Monetary Fund said in July, while raising its global growth forecast for this year, that “downside risks have risen sharply.”’


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