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The ECB’s rate-hike dilemma as eurozone business activity falls

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The ECB’s rate-hike dilemma as eurozone business activity falls

As eurozone businesses face sharp declines in outputs and new orders, experts believe the European Central Bank (ECB) faces a complex challenge as it decides whether to continue its cycle of interest rate hikes in September.

The August Purchasing Managers’ Index (PMI), published Wednesday, placed the bloc’s business activity at its lowest level since 2020, driven by a sharp contraction in the services sector and a continued decline in manufacturing. Economic powerhouse Germany is the worst hit.

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This poses a dilemma for the ECB, which is expected to make its next move on interest rates in September.

The central bank has been raising the borrowing rate in a bid to curb rising inflation and tame consumer prices. In July, its ninth consecutive rise of 25 basis points took the deposit rate to 3.75%, a joint record high last seen in 2000.

While eurozone inflation is showing signs of abating, dropping to 5.3% in July, it remains well above the ECB medium-term target of 2%. Core inflation – without energy and food prices which are considered more volatile –  also remains stubbornly high at 5.5%. 

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ECB chief Christine Lagarde has repeatedly said interest rates will continue to rise until pressures on consumer prices decline but economic experts believe the negative PMI outlook and other signs of stunting economic growth may split opinions on the Governing Council, the main decision-making body of the ECB.

A ‘balance of risks’

“The ECB will be more concerned with the current rates of inflation as opposed to the decline in business activity, which was not at all unexpected,” Stefan Gerlach, Research Fellow at the Centre for Economic Policy Research (CEPR) and Chief Economist at EFG Bank, told Euronews. “I suspect some members of the Governing Council will want to remain cautious by raising interest rates further, whilst others will want to pause hikes to ease pressure on the economy.”

“The balance of risks is certainly starting to shift. Some ECB governors will be worried that tightening monetary policy further could push the euro area into recession next year,” Gerlach added.

One risk experts also disagree over is whether a pause in rate hike would be just that, a pause, or whether it would actually put a definitive end to the past year of tightening monetary policy. 

“The risk is high that any pause would spell an end to the rate hike cycle,” Carsten Brzeski, Global Head of Macro Research and Chief Eurozone Economist at ING, explained. “This is why the ECB hawks will probably still push for a rate hike in September, which would then be the final hike.”

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“It currently really is a 50-50 likelihood,” he said.

ECB hesitation ‘costly’

Brzeski also believes the impact on businesses shows the ECB has “been too benign on the negative impact of its own rate hikes on the economy.”

With a time lag between implementing monetary policy and its impact showing up in economic data, other experts believe the ECB’s data-based approach is flawed.

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“The ECB says its decisions on the level and duration of restrictions are based on a purely data-dependent approach. But data gives us a picture of the present and the past – it does not tell us much about how to design policy for the future,” Maria Demertzis, senior fellow at Bruegel, said.

“The ECB continues to put too much emphasis on the past as a way of understanding the future and in my view this has meant decisions come late.”

Demertzis believes the ECB should change direction and pause its rate hikes in September.

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“If anything, it has already hesitated too much before pausing. It was too late to start increasing interest rates in September and it now risks making the same mistake by exiting late,” she said.

But whatever Lagarde says following the rate announcement will be just as critical and closely watched. 

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“What will happen next remains highly uncertain,” Gerlach said, “but the signals in Madame Lagarde’s communications, which have in the past created uncertainty, will also be critical as we move forward.”

ECB chief Christine Lagarde has been criticised in the past for communication gaffes which have generated uncertainty on the markets. Her messages in the autumn will be crucial, especially if the Frankfurt-based institution embarks on a new direction as many expect.

The ECB’s next Governing Meeting will be held on September 14.

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Fuerzas lideradas por kurdos repelen a rebeldes sirios apoyados por Turquía

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Fuerzas lideradas por kurdos repelen a rebeldes sirios apoyados por Turquía

QAMISHLI, Siria (AP) — Las Fuerzas Democráticas Sirias lideradas por los kurdos anunciaron el martes que han lanzado una contraofensiva contra el Ejército Nacional Sirio respaldado por Ankara para recuperar áreas cerca de la frontera norte de Siria con Turquía.

Las FDS son aliado crucial de Estados Unidos en Siria, enfocándose en las células durmientes del extremista grupo Estado Islámico dispersas por el este del país.

Desde la caída del régimen totalitario de Bashar Assad a principios de este mes, los enfrentamientos se han intensificado entre el grupo apoyado por Estados Unidos y el ENS, que capturó la ciudad clave de Manbij y las áreas circundantes.

Los intensos enfrentamientos, que han durado semanas, ocurren en un momento en que Siria, devastada por más de una década de guerra y miseria económica, negocia su futuro político tras medio siglo bajo el dominio de la dinastía Assad.

Ruken Jamal, portavoz de la Unidad de Protección de Mujeres, o YPJ, bajo las FDS, dijo a The Associated Press que sus combatientes están a poco más de 11 kilómetros del centro de Manbij en su contraofensiva en curso.

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Acusó a Ankara de intentar debilitar la influencia del grupo en las negociaciones sobre el futuro político de Siria a través del ENS,

“Siria está ahora en una nueva fase, y se están llevando a cabo discusiones sobre el futuro del país”, dijo Jamal. “Turquía está intentando, a través de sus ataques, distraernos con batallas y excluirmos de las negociaciones en Damasco”.

El Observatorio Sirio para los Derechos Humanos, un grupo que monitorea la guerra desde Gran Bretaña, dice que desde que la ofensiva del ENS contra los kurdos comenzó a principios de este mes, decenas de combatientes de ambos lados han muerto.

Ankara ve a las FDS como una filial de su archienemigo, el Partido de los Trabajadores del Kurdistán, o PKK, al que clasifica como una organización terrorista. Grupos armados respaldados por Turquía junto con jets turcos han atacado durante años posiciones de las FDS en el norte de Siria, en un intento de crear una zona de amortiguamiento a lo largo de la extensa frontera compartida.

Mientras que el ENS estuvo involucrado en la insurgencia relámpago liderada por el grupo islamista Hayat Tahrir al-Sham que derrocó a Assad, ha continuado su avance contra las FDS, vistas como el segundo actor clave de Siria para su futuro político.

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El lunes, el portavoz de las FDS, Farhad Shami, dijo que las fuerzas del grupo repelieron a los rebeldes respaldados por Turquía de áreas cerca de la presa de Tishrin en el Éufrates, una fuente clave de energía hidroeléctrica. Dijo que las FDS también destruyeron un tanque perteneciente a los rebeldes al sureste de Manbij.

El monitor de guerra con sede en Gran Bretaña dijo el martes que el grupo liderado por los kurdos, tras los combates nocturnos, ha recuperado cuatro aldeas en las áreas cerca de la presa estratégica.

Los jets turcos también bombardearon la ciudad fronteriza de Kobani en los últimos días.

Durante el conflicto de Siria, los kurdos se hicieron con un enclave de gobierno autónomo en el noreste de Siria, sin aliarse completamente ni con Assad en Damasco ni con los rebeldes que intentaban derrocarlo.

Incluso tras el derrocamiento de Assad, parece que la posición de Ankara no cambiará. El ministro de Relaciones Exteriores turco Hakan Fidan visitó Siria y mantuvo una posición firme sobre el grupo liderado por los kurdos en su reunión con el líder de facto Ahmad al-Sharaa de HTS.

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“Ha convertido la región en un caldero de terror con miembros del PKK y grupos de extrema izquierda que han venido de Turquía, Irak, Irán y Europa”, dijo Fidan en una conferencia de prensa después de la reunión. “La comunidad internacional está haciendo la vista gorda a esta anarquía debido a la custodia que proporciona (contra el Estado Islámico)”.

Con los combates en curso, el comandante de las FDS, Mazloum Abdi, ha expresado su preocupación por un fuerte resurgimiento del EI debido al vacío de poder en Siria y los combates que han dejado al grupo liderado por los kurdos incapaz de llevar a cabo sus ataques y redadas en las células durmientes del grupo extremista.

Decenas de miles de niños, familiares y partidarios de los militantes del EI todavía están retenidos en grandes centros de detención en el noreste de Siria, en áreas bajo control de las FDS.

Chehayeb informó desde Beirut.

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Esta historia fue traducida del inglés por un editor de AP con la ayuda de una herramienta de inteligencia artificial generativa.

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Netanyahu warns Houthis amid calls for Israel to wipe out terror leadership as it did with Nasrallah, Sinwar

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Netanyahu warns Houthis amid calls for Israel to wipe out terror leadership as it did with Nasrallah, Sinwar

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TEL AVIV – Amid negotiations to forge a hostages-for-cease-fire deal between Israel and Hamas in Gaza, and as the truce with Hezbollah in Lebanon mostly holds, Jerusalem has an opportunity to direct additional military resources to cut Yemen’s Houthi leadership down to size, according to former Israeli officials.

“Israel has to accelerate and expand attacks [in Yemen], not only on national infrastructure but also on the political leadership,” retired Maj. Gen. Amos Yadlin, former head of Israeli Military Intelligence and president of MIND Israel, told Fox News Digital. 

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“Targeted killings are an option if there is good intelligence to enable such operations. The leaders of the Houthis should meet Sinwar and Nasrallah and the sooner the better,” he added.

US NAVY SHIPS REPEL ATTACK FROM HOUTHIS IN GULF OF ADEN

Israeli Prime Minister Benjamin Netanyahu split screen with Abdul Malik Badruddin Al-Houthi, leader of the Houthis. (Getty Images)

An Israel Defense Forces strike killed Hezbollah terror master Hassan Nasrallah in Beirut, Lebanon, on Sept. 28, while Israeli ground troops eliminated Hamas chief Yahya Sinwar in the southern Gaza city of Rafah on Oct. 17, and Hamas’ Ismail Haniyeh in Iran last summer.

Houthi terror leaders:

The Houthis are led by Abdul Malik Badruddin Al-Houthi (Abu Jibril), whom the U.S. State Department designated as a Specially Designated Global Terrorist in 2021.

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According to the Foundation for Defense of Democracies (FDD), other top officials include Abdul Khaliq Badruddin Al-Houthi (Abu Yunis), commander of the Republican Guard (Presidential Reserve), whom the U.S. also blacklisted in 2021; Muhammad Ali Al-Houthi (Abu Ahmad), a member of the Supreme Political Council; and Abdul Karim Amiruddin Husayn Al-Houthi, interior minister and director of the executive office of Ansar Allah.

An undated picture of Houthi terror leader Abdul Malik Badruddin Al-Houthi. FDD's Long War Journal notes he was designated by the State Department as a Specially Designated Global Terrorist in 2021.

An undated picture of Houthi terror leader Abdul Malik Badruddin Al-Houthi. FDD’s Long War Journal notes he was designated by the State Department as a Specially Designated Global Terrorist in 2021. (FDD’s Long War Journal)

Joe Truzman, a research analyst at FDD’s Long War Journal, told Fox News Digital that intel-based assassination operations take time and that, to date, the Israelis have been preoccupied with Gaza and Lebanon.

“But it can be done. We’ve seen Israel target nuclear scientists and military personnel in Iran. This can be replicated in Yemen. If the Houthis continue these attacks, more of Israel’s focus turns to them,” Truzman said.

Maj. Gen. (res.) Yaakov Amidror, a former national security adviser in Israel and a senior fellow at the Washington-based JINSA think tank, outlined to Fox News Digital the intricacy of such attempts.

US MILITARY CONDUCTS SUCCESSFUL AIRSTRIKES ON HOUTHI REBEL FORCES IN YEMEN

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IDF attack on Yemen

A handout picture obtained from Yemen’s Huthi Ansarullah Media Center shows a huge column of fire erupting following IDF strikes in the Yemeni rebel-held port city of Hodeida on July 20, 2024. (Ansarullah Media Center/AFP via Getty Images)

“You have to be sure that a target is in the place that you bomb. If he has three houses, how do you know which one he’s in? You need real-time intel,” said Amidror, who noted that it was relatively easy for Israel to hit Nasrallah from the moment his exact location was known.

“It took 15-20 minutes to strike [the Hezbollah headquarters] in Beirut because it is so close to Israel,” he said. “Yemen is a huge logistical operation, it requires refueling jets, let alone the tactical issues on the ground. A totally different sort of intelligence is needed.

“Both Nasrallah and Sinwar were known enemies and we amassed information on them over many years, but the Houthis were not a priority,” continued Amidror. “The way forward is to begin intensifying the collection of intelligence by building bridges with those who can provide it.” 

Overnight Wednesday, the IAF struck targets some 1,200 miles away in Yemen, after a Houthi missile hit an elementary school in Ramat Gan, just east of Tel Aviv.

Hassan Nasrallah

IDF profile picture showing Hezbollah terror chief Hassan Nasrallah, who the IDF confirmed was killed in a strike in September. (IDF Spokesman’s Unit)

The pre-dawn strikes were conducted in two waves, targeting the Ras Isa oil terminal on the Red Sea, the Hodeidah and Salif ports, as well as the D’Habban and Haziz power stations in Sana’a, according to reports.

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In July, a Houthi drone killed a civilian in Tel Aviv, prompting the IAF to strike Yemen’s Hodeidah Port. Israeli jets also conducted dozens of strikes in the area of Hodeidah in September.

Overall, the Houthis have launched over 200 missiles and 170 drones at Israel since Hamas’s Oct. 7, 2023, massacre of 1,200 people. Since then, the Houthis have also attacked more than six dozen commercial vessels – particularly in the Bab-el-Mandeb, the southern maritime gateway to Egypt’s Suez Canal.

“The distance to Yemen is about the longest range the IAF has ever flown, but they could expand that with more refueling,” Brig. Gen. (res.) Relik Shafir, a former IAF pilot who took part in Operation Opera, the attack on Iraq’s Osirak nuclear reactor on June 7, 1981, told Fox News Digital. 

“It’s uncomfortable for a pilot to sit in an F-15, F-16 or F-35 for seven hours. You need to be fully aware and at your top level of concentration,” he continued. “Israel can strike far enough for any existing enemy and the air force uses guided missiles that fire at a precision of two or three feet.”

Sinwar poster in Iran

Deceased Hamas terror chief Yahya Sinwar on a poster in Tehran, Iran, Aug. 13, 2024. (Fatemeh Bahrami/Anadolu via Getty Images)

On Monday, Israeli Defense Minister Israel Katz issued a warning to the Houthis, “We will strike their strategic infrastructure and decapitate their leaders. Just as we did to [former Hamas chief Ismail] Haniyeh, Sinwar and Nasrallah, in Tehran, Gaza and Lebanon – we will do in Hodeidah and Sanaa.” 

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Jerusalem had previously refrained from taking responsibility for the July 31 killing of Haniyeh, who traveled to the Iranian capital for the inauguration of the country’s president.

On Friday, U.S. Defense Department spokesman Maj. Gen. Pat Ryder stated that the Israelis “certainly have a right to defend themselves.” 

Ismail Haniyeh of Hamas and his bodyguard were killed in an assassination blamed on Israel on Aug. 1, 2024 in Tehran.

Ismail Haniyeh of Hamas and his bodyguard were killed in an assassination blamed on Israel on Aug. 1, 2024 in Tehran. (Cem Tekkesinoglu/Anadolu Agency via Getty Images)

The Houthis “are a danger to everybody in the Middle East,” former Mossad head Efraim Halevy told Fox News Digital. “In the end, most countries in the region will be interested and willing to cooperate in efforts to bring about the end of these attacks, which have no justification whatsoever.”

ISRAELI AIRSTRIKES TARGET YEMEN’S HOUTHI-CONTROLLED CAPITAL OF SANAA, PORT CITY OF HODEIDA

Israeli Air Force jets depart for strikes in Yemen.

Israeli Air Force jets depart for strikes in Yemen. (IDF)

Halevy insisted that “terrorist activity of every kind is a challenge that has to be met with an appropriate response. The Houthis have incurred losses and if they continue to provoke us, we will have to do more.”

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In March 2015, a Saudi-led coalition launched a military intervention against the Houthis at the request of then-Yemeni President Abdrabbuh Mansur Hadi, who had been ousted from Sana’a the previous September. Yemen’s civil war remains stalemated, with the internationally recognized government, led by the Presidential Leadership Council since 2022, based in Aden, in the country’s south, since February 2015.

A source close to that government told Israel’s Kan public broadcaster on Saturday that Jerusalem should initiate assassinations of Houthi leaders, while the Saudi outlet Al-Arabiya reported that senior Houthi officials had fled Sana’a out of concern they would be targeted.

“We need to understand more deeply what it is that would cripple the Houthis’ ability to operate,” former Israeli national security adviser Eyal Hulata told Fox News Digital. “For this, we need more intelligence, more assessments and coordination between the different parties.”

Houthi militants in vehicles

Houthi fighters man heavy machine guns mounted on vehicles at a rally in support of Palestinians in the Gaza Strip. (Mohammed Hamoud/Getty Images)

The big question, Hulata posited, is whether the Houthis will continue to pose a threat if Israel and Hamas agree to a cease-fire.

“If they become a major enemy, Israel will need to address this by directing resources it was hoping to avoid – and maybe is still hoping to,” he said.

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On Sunday, Prime Minister Benjamin Netanyahu urged Israelis to be “patient” while intimating Jerusalem was preparing to up the intensity of its campaign against the Houthis.

“We will take forceful, determined and sophisticated action. Even if it takes time, the result will be the same,” he vowed. “Just as we have acted forcefully against the terror arms of Iran’s axis of evil, so too will we act against the Houthis.”

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Five convicted over Amsterdam clashes with Israeli football fans

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Five convicted over Amsterdam clashes with Israeli football fans

Men found guilty of crimes including kicking fans of Maccabi Tel Aviv and inciting violence in chat groups.

A Dutch court has convicted five men for their part in last month’s violence involving Israeli football fans in Amsterdam.

The Amsterdam district court on Tuesday found them guilty of a range of crimes from kicking fans of Maccabi Tel Aviv in the street to inciting violence in chat groups.

The heaviest sentence imposed was six months in prison, for a man identified as Sefa O for public violence against several people.

The violence took place on November 8 during two days of skirmishes in the city, where the Israeli football fans clashed with apparent pro-Palestinian protesters before and after a Europa League football match between their team Maccabi Tel Aviv and Ajax.

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Videos shared on social media at the time showed Israeli fans chanting racist, anti-Arab songs, vandalising a taxi and burning a Palestinian flag.

The fighting broke out after that and was instigated by the Israeli fans, witnesses and a local councilman told Al Jazeera at the time.

Police arrested people who had beaten the Israeli fans, as global leaders made accusations of anti-Semitism.

The prosecutor in the case said the beatings had “little to do with football” but added that “in this case, there was no evidence of … a terrorist intent and the violence was not motivated by anti-Semitic sentiment”.

“The violence was influenced by the situation in Gaza, not by anti-Semitism,” said the prosecutor.

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The most serious case under consideration by the court on Tuesday was Sefa, who prosecutors said played a “leading role” in the violence.

The court saw images of a man identified as Sefa kicking a person on the ground, chasing targets, and punching people in the head and the body.

Another man identified as Umutcan A, 24, received a sentence of one month for assaulting fans and ripping a Maccabi scarf from one of them.

A 22-year-old, identified as Abushabab M, faces a charge of attempted murder, but his case has been postponed while he undergoes a psychiatric assessment. He was born in the Gaza Strip and grew up in a war zone, his lawyer told the court, while Abushabab sat sobbing as his case was being heard.

A further six suspects are set to appear at a later stage. Three of these suspects are minors and their cases will be heard behind closed doors.

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Police said they were investigating at least 45 people over the violence, including that carried out by fans of the Israeli club.

At an emotionally charged news conference the morning after the riots, Amsterdam Mayor Femke Halsema said the city had been “deeply damaged” by “hateful anti-Semitic rioters”.

However, Halsema later said she regretted the parallel she had drawn between the violence and “memories of pogroms”, saying this word had been used as propaganda.

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