Germany piles pressure on ECB over record low interest rates – business live

All the day’s economic and financial news, as Deutsche’s John Cryan urges the European Central Bank to raise interest ratesLatest: Wolfgang Schäuble criticises ECBDeutsche Boss John Cryan warns of financial bubblesSports Direct chairman survives revoltEarlier:German factory orders fall in JulyMarkets nervous as South Korea meets RussiaEuropean equities down again 2.30pm BST Over in America, the trade gap has widened slightly, and the deficit with China has hit an 11-month high.The Commerce Department has reported that the difference between US imports and exports rose by 0.3% in July to $43.7bn, from June’s $43.5bn.US Trade deficit widens in July #USD pic.twitter.com/B0YnFL4cv7U.S. trade gap edges up; deficit with China at 11-month high https://t.co/88b2hGGSmc 1.57pm BST Despite this pressure from Germany, the European Central Bank will be reluctant to trim its bond purchase programme at tomorrow’s meeting.But….waiting too long has its own dangers, and could allow the ‘bubbles’ which John Cryan warned about to get even larger.In July, the European Central Bank President Mario Draghi said that the Governing Council would discuss the future of its €60 billion monthly purchases programme in the autumn. Technically, autumn in the Northern Hemisphere will not start until Friday September 22, so there is a possibility that the topic of QE tapering may not be discussed at this week’s meeting.However, many analysts reckon that an announcement would be made a bit early at this meeting because it coincides with the new ECB staff forecasts. There are a number of reasons why the ECB would want to reduce QE purchases, not least because of bond scarcity. But more importantly, the consequences of acting too late could be very damaging as inflation could spiral out of control. Continue reading…
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