ECB To Hold Fire While Brexit Impact Unclear: Analysts

(@ChaudhryMAli88)

ECB to hold fire while Brexit impact unclear: analysts

FRANKFURT, (APP - UrduPoint / Pakistan Point News -8th Sept,2016) - The European Central Bank will keep monetary policy steady at its Thursday meeting in the face of inconclusive data following Britain's EU exit vote, analysts said.

But the ECB may well start laying the groundwork for policy shifts later in the year, especially if Brexit economic pain worsens demonstrably, they predicted. Minutes from the July gathering of the ECB's governing council -- a few short weeks after Britain's vote to leave the EU -- hinted at a response in September, when more data and the bank's internal economic forecasts would be available.

But the eurozone economy has held steady since the June ballot, with employment and surveys of purchasing managers stable and ECB figures showing loans to businesses growing by 1.

3 percent in July.

There are patches of shadow in the overall picture though, with inflation -- which the ECB aims to maintain at just below 2.0 percent -- remaining well shy of target, stuck at 0.2 percent in August.

A eurozone-wide business confidence survey saw a bigger than expected drop in August, falling to a five-month low. And on Wednesday, official data showed that industrial production in the EU's economic powerhouse Germany had undergone a surprisingly sharp contraction in July.