Unhealthier German Economy, IMF’s Advice, China Exports: Eco Day

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

• Olaf Scholz is about to become chancellor of an unhealthier German economy than the one he looked set to inherit when his party won elections in late September
• European Central Bank Governing Council member Robert Holzmann supports decoupling any decision to increase interest rates from the institution’s use of asset purchases, according to an interview with Handelsblatt
• The ECB should stick with its ultra-supportive stance as long as the current bout of surging consumer prices appears to be temporary, the International Monetary Fund said
• Bloomberg Economics’ base case for the global recovery remains robust. But with the virus refusing to quit, the Fed preparing for liftoff, and China attempting to deflate a McMansion size real estate bubble, a lot could go wrong
• The U.K. is moving forward on trade engagement with individual American states, and stands ready to resume talks with Washington on a broader federal deal, Secretary of State for International Trade Anne-Marie Trevelyan said
• China’s exports and imports grew faster than expected in November, with both hitting records as external demand surged ahead of the year-end holidays and domestic production rebounded on an easing power crunch
  • Separately, China’s policy makers moved to expand support for the nation’s economy
• India will likely keep its key lending rate at a record low on Wednesday, with a new virus variant seen as the latest threat
• Australia’s central bank kept its monetary settings unchanged on Tuesday, citing uncertainty from the omicron strain of the coronavirus while highlighting positive signs in the labor market and broader economy
• President Recep Tayyip Erdogan’s push for lower borrowing costs aims to transform the economy into a job-creation engine that’ll keep him in power when elections come around in 2023, but it’s ordinary Turks who are so far paying the price
• Japan’s household spending continued to grow in October after virus restrictions were eased, a gain that further underlines the importance of keeping Covid under control to ensure the economy returns to growth
• Read the U.K.’s latest returning to the office trends from the Pret Index

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