The European Central Bank (ECB) is expected to announce its first interest rate hike since July 2008 this week even as the eurozone crisis deepens with three members missing key deficit targets.
“Only a severe escalation of the situation in Japan or a crisis in the financial markets is likely to prevent the ECB from raising rates” on Thursday, Commerzbank economist Michael Schubert said.
It would be the first change to the record low rate of 1 percent in effect since May 2009, but could raise pressure on eurozone members Greece, Ireland, Portugal and Spain.
It would also make the ECB the first leading central bank to raise its interest rate and it could drive the euro higher on foreign exchange markets.
Bank policymakers, including ECB president Jean-Claude Trichet, who flagged the rate hike last month, want to bring monetary policy back toward normal since the economy is growing and inflation is now well above target.
ECB chief economist Juergen Stark said in the Wall Street Journal Europe last month: “We need to be mindful not to keep interest rates too low for too long.”
Inflation has risen for four months running to 2.6 percent, higher than the ECB’s target of just below 2 percent, and shows little sign of stopping as oil, food and other commodity prices climb upward.
The current level of inflation, the highest since October 2008, raised the chances of more than one interest rate hike this year, economists said.
“In our view, it is obvious that more hikes will follow,” ING senior economist Carsten Brzeski said.
High prices have also begun to wear on consumer sentiment, undermining what some economists have said could be a crucial pillar of growth this year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day