- European Central Bank
The European Central Bank said that its bank lending and asset-buying programmes have significantly improve credit conditions in the Euro zone and supported the ongoing recovery in lending activity. The programmes have increased the size of the central bank's balance sheet and has raised the money supply. Both programmes reduced banks' funding costs, incentivising them to pass on the cost relief to final borrowers. Such a development should underpin the recovery in lending and economic activity, pushing inflation up to the ECB's goal in the medium term.
Meanwhile, the unemployment rate in Spain, the Euro zone's fourth largest economy, continued to rise in October. The number of unemployed surged by 82,000 in the reported month, following an increase of 26,100 in the preceding month. The Spanish economy slowed its pace of growth in the third quarter, with preliminary data showing economic output increasing 0.8% quarter-on-quarter in the three months through September. In the second quarter, the nation's GDP rose 1.0% . Measured on an annual basis, the economy expanded 3.4%, following the second quarter's 3.1% growth. The International Monetary Fund predicts a slowdown of Spanish economic growth in 2016 to 2.5%, half a percentage point below the Spanish government's forecast.
© Dukascopy Bank SA