U.K. Recovery, Turkey’s Governor, Blocked Suez Canal: Eco Day

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

  • The U.K. economy could see a “rip roaring” recovery even if consumers spend just a bit of the additional savings they accumulated during the Covid crisis, according to Bank of England Chief Economist Andy Haldane
  • The U.K. may need tougher border measures “very soon” to prevent the arrival of coronavirus variants from continental Europe that risk undermining the country’s vaccine roll-out, Boris Johnson said
  • Global warming may force central banks to keep interest rates low. Sweden’s Riksbank, the world’s oldest central bank, warned on Wednesday that rising temperatures mean monetary policy can’t ignore the fallout of carbon emissions
  • Turkey’s new central bank governor promised to stick to the single interest-rate framework adopted by his predecessor, state news agency Anadolu reported, citing a meeting between the monetary authority and commercial lenders on Wednesday
  • One of the strongest market trends of the last 12 months appears to have broken. The euro is no longer on a consistent upward path compared to the dollar, and this has ramifications for virtually everything else, writes John Authers
  • The last thing the world’s ocean trade lanes needed was another bottleneck. But the mother of all traffic jams started building Tuesday and into Wednesday as a container ship longer than an aircraft carrier ran aground in the Suez Canal, blocking transit in both directions and threatening to increase costs and delays globally
  • The U.S. fiscal boost will bring huge spillovers to the world economy, especially China, the biggest exporter. About $360 billion of the stimulus package will be spent on imports, according to Allianz SE, with Chinese exports likely to increase by $60 billion over 2021-2022
  • China’s services sector improved only marginally in the first quarter against a strong rebound in the broader economy, a sign of still weak consumption, according to a private survey by China Beige Book International

    • China’s central bank has asked lenders to keep loan growth stable and reasonable, with increased support to house leasing, innovative technology and the manufacturing sector.
  • The Asian Development Bank warned that rising U.S. yields could trigger currency and debt crises across Asia like past shocks that rocked emerging markets
  • Treasury Secretary Janet Yellen is facing fierce Republican opposition for supporting a major expansion in funding for the International Monetary Fund’s efforts to help poor nations cope with the global pandemic
  • Democrats will likely prove successful in raising individual income tax rates and in strengthening audits of wealthy Americans as they work on overhauling the U.S. tax code in coming months

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