Stable Fed, China Growth, U.K. Furlough Program: Eco Day

(Bloomberg) -- Welcome to Friday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help take you through to the weekend.

• Federal Reserve Chair Jerome Powell opened the door to a possible shift in the central bank’s bond purchases in coming months, saying that more fiscal and monetary support are needed as rising Covid-19 infections cloud the outlook for the economic recovery
• President Xi Jinping is signaling his long-term vision for the Chinese economy likely requires it to expand at a average pace of less than 5% a year, well below the historical trend over the past 30 years
• U.K. Chancellor of the Exchequer Rishi Sunak extended payments to furloughed employees until the end of March, as he sought to provide certainty to the country’s coronavirus-ravaged economy, as well as to rescue his political fortunes
• The Bank of England and U.K. Treasury are investigating a possible leak detailing the central bank’s plans to expand bond buying. The two institutions unleashed a fresh wave of stimulus Thursday
• Pressure is mounting on Poland’s central bank to act as a second, much bigger wave of Covid-19 infections threatens to derail the recovery of the European Union’s biggest eastern economy
• Australia’s central bank expects a burst of spending by households and the government’s substantial fiscal stimulus to spur faster economic growth in the near term, even as inflation weakens and unemployment remains elevated
• Friction between the U.S. and China means Washington will need Japan more than before, regardless of who wins the presidential election, according to a foreign policy adviser to Prime Minister Yoshihide Suga
• Japan’s households increased spending last quarter at the fastest pace in two decades, adding to evidence consumers helped fuel a recovery from the economy’s record collapse during the first wave of the pandemic
• Colombia’s inflation rate unexpectedly dropped to its lowest level in more than six decades after consumer demand slumped amid the coronavirus pandemic
• Europe’s economy, freshly battered by coronavirus restrictions, is facing a sluggish recovery next year that leaves it open to rising company failures and long-term unemployment

©2020 Bloomberg L.P.

With assistance from Bloomberg