Sunday

5th Dec 2021

Euro strength raises concerns

European Central Bank policymakers are becoming increasingly uneasy about the euro's rise, fearing it could move substantially higher and undermine the fragile eurozone recovery, reports the Financial Times.

The newspaper quotes a senior ECB official as saying: "We have warned for some time about the risks for growth posed by economic imbalances in other regions. Those risks are now materialising".

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He went on to say that the rapid strengthening of the euro had "introduced an element of uncertainty" into the outlook for the eurozone economy.

The ECB holds its next rate-setting meeting on 8 January, it is due to update its economic projections for growth and inflation in February and present them to governing council members in March.

The central bank has kept rates steady at 2 per cent since June, but the euro has risen about 6 per cent in four months.

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