ECB's Draghi says risks receding and wants more help for globalisation's 'losers' - as it happened
European Central Bank meeting has voted to leave borrowing costs unchanged across the eurozone
- Summary: Cautious Draghi pulls euro down
- Draghi: Don't ignore globalisations losers
- Draghi press conference: highlights start here
- Draghi: French election wasn't a factor
- Threat of trade protectionism has fallen - Draghi
- ECB leaves interest rates on hold
3.32pm BST
That's probably all for today (I'll pop back if anything dramatic happens). Thanks for reading and commenting. GW
3.20pm BST
AFP have a good write-up of Mario Draghi's comments about US trade politics:
ECB chief Mario Draghi said Thursday that the threat of protectionism may be diminishing, sounding a cautiously optimistic tone amid global fears that Donald Trump's America First policy could spark trade wars.
Asked what he had learnt about the Trump administration's economic policies during a recent trip to the US, Draghi replied: "One has to be very tentative in this, one thing that may have come out of the meetings is that perhaps the risk of trade protectionism may have somewhat receded."
3.11pm BST
Timothy Graf, head of macro strategy at State Street Global Markets, says the ECB is unwilling to change course, even though the economy is improving and political risks are fading:
Low core inflation is clearly weighing in their minds, suggesting policymaker caution will dominate for at least a few more meetings.
While the second half of the year might get more interesting if the better run of data continues and core inflation starts to trend higher, asset purchase levels and benchmark rates will likely hold for at least the next few meetings.
3.08pm BST
Bill Adams, economist at the PNC Financial Services Group, enjoyed Draghi's slapdown of Germany's finance minister:
Draghi pushed back against criticism of the ECB's monetary policy from Germany's Finance Wolfgang Schiuble by calling it "ironic" that a supporter of independent monetary policy would criticize that the outcome of that independence.
This statement immediately followed Draghi saying he doesn't comment on the statements of politicians. This is the closest you'll ever see to a central banker saying "haters gonna hate." The ECB's monetary policymaking process is well insulated from political pressure.
3.06pm BST
Ranko Berich, Head of Market Analysis at Monex Europe, says the ECB has shown that its asset purchase programme is 'here to stay for now'.
"The crux of today's presser was the fact that even though growth has improved and certain Governing Council members are more "sanguine" about economic risks, the inflation outlook has not improved sufficiently for the ECB to formally consider an end to QE.
3.05pm BST
Anyone hoping for a barn-storming performance from Mario Draghi today will have been disappointed.
The simple message from the ECB today is that the eurozone recovery is strengthening and broadening, with risks diminishing ; but the inflation outlook looks subdued, so there's little pressure to consider tightening monetary policy.
The signs of a stronger global recovery and increasing global trade suggest that foreign demand should increasingly add to the overall resilience of the economic expansion of the euro area.
A very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up and support headline inflation in the medium-term. In terms of my criteria the (inflation) assessment hasn't really changed.
In the Governing Council meetings we discuss policies, not politics.
2.27pm BST
Q: What headline would you write to sum up today's meeting?
The headline, giggles Draghi, is...
The risks surrounding the eurozone growth outlook, while moving to a more balanced configuration, are still tilted to the downside and relate predominantly to global factors.
Draghi should clearly not become a jounalist. No talent for headlines...#ECB
Draghi delivers a 45-word "headline" for ECB journalists proving that he should probs work for Bloomberg
2.22pm BST
The press pack are demanding more answers from Draghi about the French elections.
Q: Surely the battle between pro-EU Emmanuel Macron and anti-EU Marine Le Pen is a concern?
2.19pm BST
Draghi is making some rather dovish noises about the inflation outlook:
A circle needs squaring:
Draghi says deflation risks virtually disappeared...but ultra-loose policy - maybe even more easing - still needed
Tales of two #Draghi :
- hawkish economic outlook ("recovery increasingly solid")
- very dovish in inflation and inflation outlook
2.15pm BST
Draghi has called for eurozone politicians to do more to help those who have lost out from globalisation.
draghi: the EU commission should have a much greater social consideration for those who don't gain or get harmed by globalization
2.09pm BST
Q: What did you learn about the situation in the US during your trip to Washington for the IMF/World Bank meeting?
One thing that may have come out of the meetings is that the risk of trade protectionism may have receded, Draghi replies cautiously.
Draghi has learned Trump is slightly less of a dangerous nutcase than previously expected
#Draghi says, tentatively, after meetings in US the "risk of trade protectionism may have receded" &markets are reassessing US fiscal policy
2.06pm BST
Draghi says the ECB did not discuss changing its forward guidance (to maintain interest rates at present or lower levels).
Draghi: Did not discuss the easing bias, which are linked to inflation
2.00pm BST
Q: Did the ECB discuss its exit strategy from its asset purchase scheme, and how it would communicate it?
We did not, Draghi says. He adds that growth is improving, the recovery is broad and solid
Draghi says have not discussed exiting stimulus, however things are going better
#Draghi to @carolynnlook: the recovery was "fragile and uneven", now it's "solid and broad".
There is no better measure of increased equality than by increasing employment.
1.56pm BST
The euro is a little volatile as Draghi speaks.
It rose to $1.903 when Draghi declared that downside risks have fallen, only to drop back as he says there isn't enough evidence to change the ECB's inflation outlook.
The #Draghi is on TV formation in EURUSD pic.twitter.com/uCq0sWVbAN
1.54pm BST
Q: Six years ago, the ECB raised interest rates too early, forcing you to cut them. Is that experience influencing policy this time?
Draghi says he doesn't quite understand the logic of the question. In 2011, inflation was above target - today, it's not, so there isn't the same pressure to raise borrowing costs.
1.51pm BST
Draghi is in a feisty mood!
He slaps down a question about criticism from German finance minister Wolfgang Schauble, saying it was ironic to hear this from someone who supports central bank independence.
Zing! Draghi says Schauble's criticism of ECB is "ironic" from a supposed supporter of central bank independence
1.50pm BST
Q: Did any governing council members disagree about where the 'balance of risks' lies?
Draghi says there was a discussion, everyone agreed that the risk outlook is improving, but still tilted to the downside.
#Draghi - had a discussion on balance of risks to #Eurozone growth BUT not on #inflation. Some Gov Council members more sanguine on growth
1.47pm BST
Onto questions.
Q: Did the French election, and the prospect of Emmanuel Macron becoming president, influence your decisions this month?
meeow "we don't do monetary policy based on likely election outcomes" #Draghi
1.46pm BST
Nice snap summary of Draghi's statement:
Draghi- something for everyone
-Recovery more solid
-Expansion to strengthen
-Risks still to downside
-Substantial accomodation still needed
1.45pm BST
Draghi ends with his usual call for eurozone governments to do their bit, saying other policy areas must contribute "much more decisively".
1.44pm BST
The eurozone still needs a "very substantial degree of monetary accommodation" in order to get inflation back to a sustained level of 2%.
1.43pm BST
Draghi says that underlining inflationary pressures are still low, and predicts that inflation will probably remain around its current levels until the end of the year.
1.40pm BST
Economic indicators suggest that the eurozone economic recovery is increasingly solid, Draghi declares.
And importantly, he adds that downside risks to the eurozone have diminished.
DRAGHI SAYS DOWNSIDE RISKS HAVE DIMINISHED
1.37pm BST
Mario Draghi begins by reading out the key points from today's statement - namely that:
1.33pm BST
Mario Draghi is late! Ah...here he comes now.
1.27pm BST
Mario Draghi is about to face the press pack in Frankfurt, to explain today's decisions.
Here's a live feed from the ECB's headquarters:
1.06pm BST
With exquisite timing, Germany's inflation rate has risen to 2% this month.
That's up from 1.5% in March, according to figures just released by the Federal Statistics Office.
*GERMAN APRIL CONSUMER PRICES RISE 2.0% Y/Y; EST. 1.9%
12.58pm BST
Ana Boata, European economist at trade credit insurer Euler Hermes, predicts that eurozone interest rates will stay on hold until 2019.
Here's why:
"The Eurozone economy is strengthening, but we don't expect the ECB to start raising interest rates until 2019. The most likely scenario is that interest rates increase to two per cent by 2022, which will push interest payments for the total private sector up by a160 billion compared to their current level, a moderate increase.
12.57pm BST
There are no significant changes in the language of today's ECB statement, compared to the one released after March's meeting.
Spot the difference pic.twitter.com/dheCqAIIuj
12.54pm BST
Here's some instant reaction to the ECB's decision:
ECB keeps policy and message unchanged. More of same from Mario Draghi at 2.30 CET.
https://t.co/YkXUMteQ4p
No surprise so far from #ECB as expected:
- Refi 0%
- Marginal lending 25bps
- Depo rate -0.4%
- Asset Purchase a60bn
No new drum beat or drama by the #ECB, French elections have them on a tight leash
ECB all three rates on hold as exp with statement the same, so no hawkish tweaks that might have been outside bet https://t.co/ciy9zJdJuZ
12.50pm BST
Newsflash: The European Central Bank has left borrowing costs across the eurozone unchanged.
That means the headline interest rate remains at 0%, an alltime low.
If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the programme in terms of size and/or duration.
No hawkish surprise. ECB rates expected to remain "at present or lower levels". Bias for QE expansion unchanged, too. Rendez-vous in June.
12.37pm BST
Tension is building....
10 minutes to go until ECB decision
Time for #ECB pic.twitter.com/bOazTgfV7D
12.33pm BST
Economists at Societe Generale predict that the ECB's governing council will sound more optimistic about growth today, but resist making any major changes to their language.
They say:
"The ECB will likely acknowledge a further improvement in the balance of risks by pointing to upside risks to growth,
However, no material changes to its dovish communication are likely and we only expect the medium-term risks to be described as balanced in June."
After all, the risks to inflation - CPI dipped in March - are still tilted to the downside and this could be one reason to delay tapering. The other reason is the precarious state of the Italian banking sector.
Its banks hold the largest amount of bad debt in all of Europe. If the ECB reduces the amount of liquidity in the European financial system too quickly then it is hard to see how these banks can recapitalise themselves, and avoid selling off some of their bad debts at a book value so low that it hits their capital position. This could ultimately cause a much bigger problem for the ECB and the wider European banking sector.
12.10pm BST
Today's ECB meeting could be rather a damp squib, I fear. The central bank won't want to rock the eurozone boat before the French election is over.
Craig Erlam, senior market analyst at OANDA , says "very little" is expected from the ECB:
The meeting falls in between the first and second round of the French Presidential elections, with eurosceptic Marine Le Pen one of the two candidates set to battle it out for the Presidency on 7 May.
While the central bank may want to avoid appearing to interfere in the election, it will be interesting to see whether the reference to downside risks is scaled back in order to avoid playing into Le Pen's hands, or whether they talk up the progress achieved this year and the improved prospects for the region.
12.05pm BST
Over in Frankfurt, the European Central Bank is wrapping up this month's monetary policy meeting.
"The big question is when we will hear from the ECB regarding a potential tapering of the current asset purchase facility. Draghi has already said that the eventual unwinding of the quantitative easing (QE) programme will involve a tapering of the asset purchase size, the timeline of which we will have to see laid out in advance.
With that in mind, it is always worth noting that at some point, we will face the repercussions of a more hawkish Draghi, and the market response to such an event. Will it be this week? Probably not.
11.35am BST
The CBI's monthly healthcheck on Britain's retail sector suggests that sales jumped this month as consumers kept spending.
Around 59% of retailers surveyed said that sales volumes were up in April on a year ago, whilst 21% said they were down, giving a balance of +38%. That's the highest balance since September 2015.
Retail sales growth accelerates in the year to April, but growth expected to slow next month. #CBI_DTS #retail https://t.co/TM0j0AxB0F pic.twitter.com/ZhwFvOkyWa
There is also a strong likelihood that consumer confidence and willingness to buy major items will soften - as it is not only pressurized by weakened purchasing power but also by increasing concerns over the economy and jobs as growth likely slows and uncertainties are magnified by Brexit coming more to the forefront now that Article 50 has been triggered.
10.55am BST
Wall Street is expected to open flat in nearly four hours time, as traders await reaction to Trump's tax plan.
Marc Ostwald of ADM Investor Services says there's a "clear sense of anti-climax in markets" about the lack of nitty-gritty released yesterday. That means Congress will now "chisel out" the details, he adds.
10.19am BST
Breaking: Economic confidence in the eurozone has jumped this month, to its highest level since the financial crisis struck.
The EC's monthly economic sentiment survey, just released, has jumped to 109.6 this month, up from 108 in March. That's the best reading since August 2007.
Major boost to #Eurozone growth hopes as #EUCommision reports overall #business & #comsumer confidence surged in Apr to best since Aug 2007
#Euro Business Confidence at 1.09 https://t.co/tk2Z3fwXVD pic.twitter.com/dX8xsKxZPq
9.38am BST
Pensions are a hot topic in the UK right now, with speculation that the Conservative Party might drop the 'triple-lock' (a pledge that pensions rise by 2.5% per year, or in line with earnings or inflation if they're higher).
But the OECD thinktank argues that Britain should go further, and stop giving anything to richer pensioners.
"Faced with these pressures, are you going to ask people of working age to pay more, or people to work longer before they can claim their pension?
"Or another way to ensure an adequate pension is to think about whether the pension should only be paid to those who really need it, to ease the tyranny of the maths. Giving less [pension] to the people at the top would free up resources to increase general benefits."
Related: UK should axe state pension for rich people, says OECD
9.24am BST
Britain's housebuilders appear to be doing well, despite the uncertainty created by Brexit.
Persimmon and Taylor Wimpey have both reported solid result this morning, pushing their shares up 0.8% and 0.5% respectively.
8.46am BST
As well as the tax reform plan, investors are also digesting the surprise news that Donald Trump no longer wants to abolish the NAFTA free trade agreement.
This huuuge u-turn broke last night, after talks with the leaders of Canada and Mexico:
Massive Trump U-turn: says he will not pull out of Nafta at this time. He's railed against it his whole life pic.twitter.com/IPlYbpzKAD
Overall, this suggests that both communication and policy decision making are a shambles at the White House right now, with extreme and more moderate forces vying to get Trump's attention.
Overall, this Nafta issue highlights that policy implementation risk is surging under the Trump administration, and could stoke volatility if it continues.
8.43am BST
The dollar has also dipped this morning, taking the greenback close to its lowest level in five months.
That's pushed sterling back over $1.29.
The lack of details contained on Trump's single piece of paper was perceived as a publicity stunt for the President as he celebrates his first one hundred days in the Oval Office, and unfortunately, seemed more of a wish list than a serious starting point.
8.37am BST
UK bank Lloyds is defying the selloff, with its shares jumping 4% at the open.
Related: Lloyds profits double to 1.3bn despite PPI and fraud payouts
8.28am BST
Connor Campbell of SpreadEx sums up the problem with Donald Trump's tax plan - Not Enough Detail!
Alongside cutting corporate tax rates to 15%, Treasury Secretary Steven Mnuchin and National Economic Council director Gary Cohn revealed that the USA's 7 tax brackets would be reduced to 3, while the alternative minimum tax would be slashed and nearly all of the current tax deductions eliminated.
Yet when pressed for more information, specifically if these reforms would be revenue neutral, the pair came up short, producing some Trumped up rhetoric about how it would pay for itself through 'growth, reduction of deductions and closing loopholes' and that the administration had a 'once in-a-generation opportunity to do something really big'.
8.26am BST
Here's the damage across Europe's markets this morning:
In focus today will be fallout from Trump's tax announcement, having disappointed by being merely a proposal framework and still facing the same Congressional hurdle (deficit hawks on both sides of the aisle) that he was unable to clear with Healthcare reform.
8.14am BST
European stock markets have fallen at the start of trading as traders give their verdict on Trump's tax policies.
In London, the FTSE 100 has shed 27 points or 0.4%, while France's CAC 40 has lost 0.2%.
Investors focused on President Trump's tax reforms were disappointed by the lack of any real detail.
8.05am BST
Robin Bew of the Economist Intelligence Unit isn't impressed by the lack of detail in the Trump tax plan.
Trump tax plan so thin as to be almost meaningless. Headline grabbing rate reductions with no detail on funding. Long way from being passed
The tax plan unveiled today is like turning in a book proposal to your editor on the day the manuscript is due.
White House unveils dramatic plan to overhaul tax code: plan has less than 200 words and contained just 7 numbers https://t.co/EWDPvEn5MQ
7.49am BST
After all the razzmatazz, Donald Trump's tax reform plan has left investors rather cold.
If you're going to promise one of the biggest tax cuts ever, you need to present more than one side of A4 paper peppered with bullet points. So the broad brush policies presented last night haven't really impressed the City.
Related: Trump unveils 'most significant tax reforms since 1986', but experts sceptical --as it happened
Related: Trump under fire for 'huge tax cut for the rich'
Markets had been hoping for more in the way of specifics, in particular the percentage level of the one-off profits tax, which it is hoped will prompt technology companies to repatriate the billions of dollars in profits currently held overseas, as well as some indications on timings, and how the cuts would be funded.
These still appear to be some way off, and appear unlikely to go through this year, though we may get something on healthcare by the end of the month. In any case the effect on the US dollar is likely to be a negative one given that markets will have to wait a while longer for a repatriation boost.
7.35am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
After the market's 'hawkish' interpretation of the March meeting we expect that Draghi will purposely look to strike a more dovish tone in his press conference along the lines of his recent speech to the annual 'ECB and its Watchers' conference earlier this month.
He argued that, despite an improving growth backdrop, the conditions under which the ECB could begin to consider tightening policy had yet to be met, meaning that that there was no cause to deviate from the current policy path and forward guidance, including what it implied about the sequencing of policy changes
UK companies posting results - Persimmon, Jardine Lloyd Thompson, Cobham, Agrekko, Astra Zeneca, Weir Group, Schroders, WPP, Katz Minerals
LLOYDS BANKING GROUP posts Q1 interim management statement today at 7.00am
US companies posting results - Ford, Raytheon, Zimmer, Bristol Myers Squib, Mead Johnson, CME, KKR, Microsoft, Amazon, Starbucks, AbbVie,
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