The leadership of the European Central Bank (ECB) during the July meeting warned that the adopted by referendum on 23 June Britain’s decision to withdraw from the EU (Brexit) will have unpredictable impact on the situation in the global economy and the Eurozone in particular.
The ECB meeting minutes of July 21, published on Thursday, showed that the manual regulator was concerned about the weakness of the European banking sector, which may prevent the Central Bank to reduce the cost of lending in the region, reports PRIME.
The management of the ECB has acknowledged the existence of “new negative factors to economic recovery in the Eurozone that emerged after the decision of the UK to leave the European Union. The Central Bank stressed the readiness to introduce new stimulus measures if necessary.
During the July meeting, the regulator left its policy unchanged and ECB President Mario Draghi did not dare to signal the imminent increase of the incentive measures. The Central Bank already lowered interest rates below zero and monthly gains of assets (mainly government bonds of the Eurozone countries) in the amount of 80 billion euros ($90,18 billion) to support the economy of the currency Union.
However, inflation in the Eurozone is also at a level close to zero, and the prospects for economic growth look rather vague, so the majority of economists expecting the ECB to extend the program of “quantitative easing” for at least six months, and it will happen at the meeting on 8 September. By that time, will have published new economic forecasts that take into account the possible consequences of Brexit.
