China’s Loan Rate, U.K. Spending, U.S. Economic Damage: Eco Day

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(Bloomberg) --

Welcome to Thursday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help get your day started:

  • Federal Reserve officials indicated they could leave interest rates unchanged for many more months amid concerns about a persistent undershoot of their inflation goal, potential room to further boost employment and risks stemming from the coronavirus and trade
  • China’s banks lowered the benchmark borrowing costs for new corporate and household loans after Beijing slashed a range of policy rates this month to blunt the economic impact of a deadly virus outbreak; Bloomberg Economics’ David Qu sees the official one-year Loan Prime Rate falling another 30 basis points this year
  • The bond market is giving U.K. Prime Minister Boris Johnson the green light for a spending splurge, which looks likely to see an increase in infrastructure investment
    • The U.K. only wants highly skilled workers now, but construction companies say that’s not enough to fulfill big infrastructure projects
  • The White House acknowledged what many economists considered obvious through much of last year: President Donald Trump’s trade stance depressed economic growth and business investment
  • European Union member states are at loggerheads over their negotiating position in post-Brexit trade talks as French President Emmanuel Macron pushes for more demanding conditions to be imposed on Britain
  • The International Monetary Fund reiterated that global economic growth appears to be bottoming out, but cautioned that risks including the coronavirus dominate the outlook
  • The IMF gave Argentina the backing it needed to hit its bondholders with a significant haircut
  • Economists are torn on the timing of Egypt’s next interest-rate cut. Following a surprise decision to leave the benchmark deposit rate at 12.25% in January, the central bank will have to decide if it can look past an uptick in inflation and the economic havoc unleashed by the virus outbreak in China
  • Australia’s jobless rate unexpectedly climbed in January despite a surge in full-time employment as more people hunted for work

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