European Bankers Are Concerned About Brexit’s Impact, But Hold Off On Economic Stimulus
The European Central Bank is feeling the sting of Britain’s decision to leave the EU—but policymakers have held off discussing potential stimulus measures.
Minutes from the ECB’s July 21 meeting were published today, revealing policymakers are concerned about Europe’s weak banking sector. Bankers had already cut interest rates below zero prior to the Brexit vote, and economists project it will make moves to boost stimulus again in its Sept. 8 meeting, the Wall Street Journal reports.
Unlike the ECB, the Bank of England cut rates to a historic low of 0.25% a month following the referendum vote. The drop from 0.50% to 0.25% immediately weakened the pound, bringing the nation to its lowest rates since the BOE was founded in 1694.
In the US, economists speculate central bankers will raise interest rates in September as the economy continues to strengthen. Federal Reserve officials say the US economy is less susceptible to risks and the labor market is tightening. [WSJ]
