The European Central Bank could start raising interest rates about a year from now if the euro-zone economy develops as policymakers currently expect, governing council member Olli Rehn said on Thursday.
Speaking a week before the next policy meeting, Mr Rehn said financial markets seem well-aligned with the central bank's guidance, which foresees borrowing costs staying at record low levels through the summer of 2019.
"Markets appear to be reading the ECB's forward guidance correctly," Mr Rehn said. "The starting point should be that if the economy develops roughly in line with the current outlook, the first rate increases would take place in the final quarter of 2019."
His comments come as the ECB prepares to cap its bond- buying programme by the end of the year, according to Bloomberg, and will feed into the debate over the exact timing of rate lift-off. Dutch governor Klaas Knot raised the possibility earlier this month that officials may consider speeding up the process of removing their extraordinary stimulus if the euro-zone economy evolves in line with projections.
Mr Rehn said policy must remain stimulative as core inflation hovers around 1 per cent. While headline inflation is fluctuating around 2 per cent, that's largely driven by energy prices.
He said the governing council has yet to discuss its strategy for reinvesting proceeds from maturing debt under quantitative easing, but the decision will be taken in the coming months. In any case, reinvestment of government and corporate debt will continue for "quite a long time." Mr Rehn also joined in criticism of the 2019 budget draft that Italy's populist government sent to Brussels earlier this week.
The plan, which foresees a deficit three times the previous government's projection, was criticised late Wednesday by Bundesbank president Jens Weidmann, who said the euro zone's third-largest economy should focus on reducing its huge debt pile.
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Read more:
European Central Bank cannot rescue Italy without EU bailout, sources say
Euro likely to stay weak against dollar until mid-2019
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Separately, Ewald Nowotny, governor of Austria’s central bank, said if German Chancellor Angela Merkel really has given up on backing Mr Weidmann to succeed Mario Draghi as European Central Bank chief, that’s a mistake.
"I would have welcomed Weidmann's candidacy" for ECB president, Mr Nowotny said in an interview with Oberoesterreichische Nachrichten. "I consider it a serious political mistake by Angela Merkel that she is no longer pursuing Mr Weidmann's candidacy. It would be good if someone from the largest economy in the euro zone heads the ECB."
Mr Draghi's job will become available at the end of next October, Reuters said. By that time Mr Nowotny - a moderate policy hawk who has often sided with Mr Weidmann - will have left his post too.
"I would have welcomed a candidacy of Weidmann very much," said Mr Nowotny.
Mr Nowotny’s comments highlight the difficulty in reading Mrs Merkel’s strategy to secure one of many upcoming top European jobs for a German. Mr Weidmann, long seen as the front runner to succeed Mr Draghi when his term expires in October 2019, fell back in the pack of contenders after she apparently decided to prioritise the European Commission’s top post.
Common wisdom would suggest that Germany couldn’t also claim the presidency of the ECB, which hasn’t had a German leader in its 20-year history.
Mrs Merkel acknowledges she can’t have it both ways, but has also insisted that pushing for Mr Weidmann isn’t ruled out. According to the chancellor, the road to certainty is “endlessly long”.
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Company%20Profile
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Company%20Profile
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The view from The National
Bombshell
Director: Jay Roach
Stars: Nicole Kidman, Charlize Theron, Margot Robbie
Four out of five stars
A%20QUIET%20PLACE
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JAPANESE GRAND PRIX INFO
Schedule (All times UAE)
First practice: Friday, 5-6.30am
Second practice: Friday, 9-10.30am
Third practice: Saturday, 7-8am
Qualifying: Saturday, 10-11am
Race: Sunday, 9am-midday
Race venue: Suzuka International Racing Course
Circuit Length: 5.807km
Number of Laps: 53
Watch live: beIN Sports HD
COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Ponti
Sharlene Teo, Pan Macmillan
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
Five expert hiking tips
- Always check the weather forecast before setting off
- Make sure you have plenty of water
- Set off early to avoid sudden weather changes in the afternoon
- Wear appropriate clothing and footwear
- Take your litter home with you
Key fixtures from January 5-7
Watford v Bristol City
Liverpool v Everton
Brighton v Crystal Palace
Bournemouth v AFC Fylde or Wigan
Coventry v Stoke City
Nottingham Forest v Arsenal
Manchester United v Derby
Forest Green or Exeter v West Brom
Tottenham v AFC Wimbledon
Fleetwood or Hereford v Leicester City
Manchester City v Burnley
Shrewsbury v West Ham United
Wolves v Swansea City
Newcastle United v Luton Town
Fulham v Southampton
Norwich City v Chelsea
PSG's line up
GK: Alphonse Areola (youth academy)
Defence - RB: Dani Alves (free transfer); CB: Marquinhos (€31.4 million); CB: Thiago Silva (€42m); LB: Layvin Kurzawa (€23m)
Midfield - Angel di Maria (€47m); Adrien Rabiot (youth academy); Marco Verratti (€12m)
Forwards - Neymar (€222m); Edinson Cavani (€63m); Kylian Mbappe (initial: loan; to buy: €180m)
Total cost: €440.4m (€620.4m if Mbappe makes permanent move)