The world’s largest central banks have come together to stop a banking crisis from spreading after the Swiss financial authorities succeeded in convincing multinational investment bank UBS to acquire its troubled rival Credit Suisse in a historic deal.
Leading central banks, including the Federal Reserve, the European Central Bank, the Bank of Canada, the Bank of England, the Bank of Japan and the Swiss National Bank announced a joint action late on Sunday, March 19, to increase liquidity.
The second and third biggest bank failures in US history earlier this month triggered market uncertainty, threatening to make it harder for people to borrow money, US Treasury Secretary Janet Yellen said last week.
The German economy’s investor sentiment fell for the first time in six months following the recent turmoil in the global banking sector that added to the worries of inflation faced by German companies and households.
The ZEW Indicator of Economic Sentiment tumbled to 13.0 in March from 28.1 in February, the Mannheim-based think tank said. The index dropped after five successive months of improvement. Notwithstanding three consecutive months of positive readings, the March reading was below economists’ forecast of 17.1.
The current situation index fell to -46.5 from -45.1 in the preceding month. The reading was forecast to improve to -44.3. “The international financial markets are under strong pressure”, and the high level of uncertainty is reflected in the economic expectations, said ZEW president Achim Wambach.
British households continue to face high food and energy bills, while workers across various sectors have launched industrial action in recent months.
According to the National Statistics Office (ONS), the consumer prices index (CPI) accelerated to 10.4 per cent in February from 10.1 per cent the prior month, with prices being driven higher by a rise in the cost of drinks, women’s clothes, meals out, and fresh food due to acute shortages vegetables.
“Food and non-alcoholic drink prices rose to their highest rate in over 45 years, with particular increases for some salad and vegetable items as high energy costs and bad weather across parts of Europe led to shortages and rationing,” ONS chief economist Grant Fitzner said.
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