ECB’s Headache, U.K. Growth, BOJ Stimulus Chances: Eco Day

(Bloomberg) --

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

• European Central Bank officials trying to make their sub-zero monetary policy more palatable may need to be imaginative if they want it to reach the whole euro zone
• The U.K. government delayed its full spending review to 2020 and will instead hold a one-year exercise so departments know their budgets for the next financial year. A report Friday will show the U.K. economy stagnated last quarter, according to a Bloomberg survey of economists
• German exports registered their steepest annual decline in three years, highlighting the plight of a manufacturing sector suffering from global trade conflicts
• The specters of a currency war and global recession re-emerged in full force this week, with central bankers struggling to keep up on the defense while other economic risks also rise
• The Kremlin’s bet that Russia’s sputtering economy would finally accelerate in the second half of the year is turning into a losing one as international demand for commodities weakens amid the global trade war
• Another quarter of stronger-than-expected growth did little to ease concerns that trade tensions and a tax hike are set to slow Japan’s export-driven economy. Meanwhile, Bank of Japan watchers are flagging a growing chance of additional stimulus as soon as next month’s policy meeting
• Donald Trump’s intensifying battle with China and other major trading partners is morphing into a global currency war, and it will be hard for him to win both
• The likelihood of a U.S. recession in the next 12 months rose to 35% in an August survey of economists, from 31% forecast previously, as global trade tensions fuel economic uncertainty
• Australia’s central bank reiterated it’s prepared to cut interest rates further as subdued household income and consumer spending mean inflation will take longer to return to its elusive target, in the RBA’s quarterly Statement on Monetary Policy released Friday

To contact the reporter on this story: Anirban Nag in Mumbai at anag8@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram, Tuhin Kar

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