Take Two: ECB “not sufficiently confident” to start cutting rates yet; China sets 2024 growth target
- 11 March 2024 (3 min read)
What do you need to know?
European Central Bank (ECB) President Christine Lagarde acknowledged that while inflation is falling back towards its 2% target, the central bank is not yet “sufficiently confident” to start cutting rates yet. At its monetary policy meeting last week, it left its main interest rate on hold at 4.0%. Markets are pricing a rate cut in June, which “seems to be converging” with the ECB’s view, Lagarde added. A flash estimate earlier this month showed inflation had fallen to 2.6% in February from 2.8% in January. Meanwhile Eurozone fourth quarter (Q4) GDP growth was confirmed at 0.0% on a quarterly basis. Separately, Federal Reserve (Fed) Chair Jerome Powell stated in testimony to Congress that the Fed was “not far” from having confidence to begin its own rate cutting cycle.
Around the world
China set its 2024 annual growth target, once again, at “around 5%”, as Premier Li Qiang marked his debut opening of the annual National People’s Congress last week. Although the new target is in line with 2023’s, it may be seen as ambitious given that in 2022, growth had been supressed by China’s ‘Zero-COVID’ policy. Several measures to bolster the country’s sluggish recovery from the pandemic were also announced, including initiatives designed to help its troubled property sector. Additionally, a series of central government special bonds will be issued over the following years, starting with RMB ¥1trn (around $139bn) for 2024.
Figure in focus: 37.4 billion tonnes
Energy-based global carbon emissions rose to a record high in 2023, though they increased at a slower pace than the year before, due to a rise in renewable energy, according to the International Energy Agency (IEA). Emissions rose to 37.4 billion tonnes, increasing by 410 million tons in 2023, a 1.1% rise from 2022. The IEA highlighted the progress made in implementing clean energy technologies, citing solar, wind and nuclear power as well as electric cars. It claimed that without such developments the global increase in carbon emissions over the past five years would have been three times larger.
Words of wisdom
Super Tuesday: The day in the US Presidential election process when the largest number of states hold primary elections, with the results viewed as a strong indicator of the candidate most likely to secure their party’s nomination to run for Presidency. Donald Trump won 14 of the 15 states, prompting his main rival Nikki Haley to withdraw from the race. Meanwhile President Joe Biden set out the themes of his election campaign in the State of the Union address.
What’s coming up?
On Monday, Japan issues its final estimate for Q4 GDP growth. On Tuesday, the US publishes inflation data for February while the UK reports its latest unemployment figures. The UK publishes GDP growth covering January on Wednesday, while the Eurozone releases industrial production figures. On Friday, the US publishes its own industrial and manufacturing production data for February.
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