Revised Outlook for EU

A new week, a new stance on our continent’s economic status.  Last week, one was beginning to feel positively rosy with all the news of increased profits and slowdown in declines….

But we wouldn’t want to get too excited would we?  Because we really ought to know by now that all in all, there just isn’t that much to get excited about on the economy.  Yes, there is the odd bit of good news here and there, and currency trends change sometimes for the better for certain currencies – recently the Norwegian krone has been enjoying a reliable status – but overall the best thing to do, it seems, is to just stay cynical.

The European Commission has now re-thought its last forecast for Europe, and now things are even worse!  There will be declines all around, and Germany’s decline is set to be the largest at 5.5 per cent.  The UK will see around 4 per cent, which is more than Chancellor Darling’s prediction.

The European Central Bank is also set to introduce measures to boost the EU economy.  There is even speculation that they will introduce quantitative easing, something which the Bank of England introduced amid much negative reaction.  They are also set to reduce the interest rate to 1 per cent.  This and other speculation in the foreign exchange market over what they are set to do has caused the euro to fall against 13 of the 16 most-traded currencies, including the US dollar and the yen.

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