European financial markets sharply collapsed due to the concerns of investors that central banks will reduce emergency support packages in the coronavirus pandemic. The authorities already declare plans, despite the slowdown in the growth of the global economy. Reports about it The Guardian.
The leading index of the British Stock Exchange FTSE 100 fell by about 2.3 percent in the morning of August 19, amounting to about 7,000 points, as stock prices decreased throughout Europe. This happened after the US Federal Reserve announced the possibility of reducing the economy support this year.
German stock markets, France and Italy fell by more than 2 percent, while the Key Spanish Stock Index IBEX 35 decreased by 1.7 percent.
Despite the fact that the “Delta” -Stam cronavirus holds back the pace of restoration of the global economy, officials suggested that economic and financial conditions will require reductions in investment in the coming months. Officials of the American Fed on August 18 reported that they could reduce the threshold, limiting the quantitative mitigation program, from October to December. This program suggests that the Central Bank redeems bonds from banks and provides them with funds for lending to the economy.
signs that the largest Central Bank of the world can begin to reduce pandemic support measures, forced to fall in the price of Asian stocks, and on August 19, the sale of assets shifted to Europe.
Investment director of AJ BELL TRY Mold spoke about the situation as follows: “The Protocols of the Fed, which showed the separation of opinions between its members about when to launch a reduction in financial incentives, the continued global distribution of Delta -Stamma, the weakness of the Chinese economy and riots In Afghanistan, this is a cocktail of fears that constrain investors. “
Inflation has increased sharply in several developed economies. In the US, it reached a 13-year high of 5.4 percent, which far exceeded the target Fed rate of two percent. Inflation in the UK fell from 2.5 percent to two percent in July, although it is expected that this year it will grow to four percent.