FirstFT: Omicron adds doubts to ECB’s commitment to further stimulus

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European Central Bank policymakers Reassess your commitment to additional stimuliReflects growing doubts about how rapidly inflation will fall as the Omicron coronavirus mutant fuels concerns about further price increases.

Three recent events have questioned the minds of some ECB interest rate setters who have predicted for months that inflation has fallen below target and justified the continuation of the vast stimulus package.

First, the eurozone inflation surge to 4.9% in November, well above the ECB’s 2% target, the record since the euro was created 20 years ago. This was followed by new variants that could exacerbate the supply chain bottlenecks that pushed up prices.

Last week, the Federal Reserve said it would accelerate the end of a bond purchase program to tackle inflation and put pressure on the ECB to curb its asset purchase plans.

Analysts worried that a “hawkish” shift to withdraw stimuli earlier than expected could increase the likelihood of selling in the eurozone government bond market ahead of the ECB’s meeting next week. doing.

Do ECB policy makers need to withdraw the stimulus sooner than expected?Share your thoughts at firstft@ft.com.. Thank you for reading FirstFT Europe / Africa.This is the rest of today’s news — Jennifer

1. Deutsche Bahn auditors are not fully informed about whistleblower complaints The railroad operator did not “comprehensively notify” auditor PwC. Allegations of fraud In Germany’s largest infrastructure project, decision accounting experts said it was below German and international audit standards.

2. EU plans to tackle “coercion” face resistance NS Proposed EU law Concerns that allowing rapid retaliation against countries such as China and Russia for economic sanctions could violate the rules of the World Trade Organization, strengthen protected trade principles and damage the fragile trading system. Face resistance from member states against.

3. US regulatory investigation Lucid Motors, an electric vehicle group published in one of the largest Spac deals in history, investigating According to the Securities and Exchange Commission on Disclosure and Forecast. The SEC is also investigating a blank check company to be merged. Donald Trump’s Social Media Startup..

4. US diplomatic boycott of the Beijing Winter Olympics Joe Biden has decided not to send a government delegation to the Olympics. Diplomatic boycott It is designed to send a powerful message to China about the persecution of Uighurs in the Xinjiang Uygur Autonomous Region.

5. Aung San Suu Kyi was sentenced to imprisonment Myanmar Testimony Record Leader Received a judgment According to state media, it was two years for instigating an objection to the military and two years for violating the national disaster management law, but the penalties were later reduced by two years. The 76-year-old politician faces more than 10 criminal charges.

Aung San Suu Kyi was banished in a military coup in February and has limited legal access.

Aung San Suu Kyi was banished in a military coup in February and has limited legal access. © Sakchai Lalit / AP

Coronavirus digest

  • Sajid Javid, Minister of Health, Community communication Omicron variant England As the case rose to 336 across the UK.

  • Initial data from the hospital South Africa Showed it on December 2nd Only 9 out of 42 patients He was being treated in the Covid Ward and needed oxygen.

  • New York City Will Need all private sector workers To be vaccinated, you have the strictest vaccination obligations in the United States.

  • new Zealand The runaway house price is Low net migration If the border remains closed, the deputy governor of the central bank said.

  • After suffering from one of the worst Covid-19 disasters Brazil Staging turnaround Due to the mass inoculation campaign, mortality rates were lower than those in the US, EU and UK.

  • opinion: Don’t despair if Omicron ruins your vacation plan, Pirita Clark writes.. Vacations are great, but a few days off can be as useful as a week.

Brazil has more cumulative Covid-19 deaths than the United States, the United Kingdom, or the European Union across the pandemic, but currently has two line charts showing lower daily deaths than any of these regions. ..

The day before

Putin-Biden Phone US President Joe Biden Detailed disciplinary action If Ukraine invades Ukraine today on a phone call with Vladimir Putin, it will do “serious” damage to the Russian economy.

  • opinion: Putin argues that Ukraine is a failed state and is misled by foreign conspiracies. Gideon Rachman writes..

  • FT view: Biden must show that he will face sanctions imposed by further attacks on Ukraine Unbearable cost In Russia.

UK Travel Ban From 4am, anyone arriving in the UK, regardless of vaccination status, should be shown Proof of negative pre-departure coronavirus test.. Citizens other than the United Kingdom or Ireland who have been to Nigeria in the last 10 days are not allowed to enter the country.

Economic data The EU releases revised GDP data for the third quarter.In the United States, preliminary data show a modest increase in exports and imports in October, showing narrower Trade gap.. Germany will also publish industrial production figures and Zew’s economic survey. (WSJ)

Anniversary of the attack on Pearl Harbor Today’s mark 80 years Since Japan bombed Pearl Harbor. Expect a substantial analysis of the relationship between the two countries that has improved significantly since Prime Minister Shinzo Abe first visited Japan five years ago.

Sign up to receive Last week’s email Preview what’s happening in global business, politics, and economics every Sunday in your inbox.

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Next quantum revolution Corporate credit is largely unaffected by computer-driven transactions.But a new kind of money manager Shake the market Use processing power, models, algorithms, and big data to systematically withdraw cash from price anomalies.

La Niña intensifies extreme weather NS Weather patternDeveloped for the second year in a row, is expected to have a continuous impact on agriculture and water supply, intensifying rainfall and drought around the world.

What does the lost decades of education mean for the economy? Boris Johnson likes to blame the business for economic problems and claims that Brexit will rock Britain from “a broken model of low growth, low skills and low productivity.” But what about domestic workers who are expected to empower this transformation? Sarah O’Connor asks..

The world does not feel the effects of China’s downturn Beijing is locking down to contain Covid-19, cracking down on unmatched attacks on economically significant sectors and high corporate debt. But the country may not be as important to the world economy as it once was, Ruchir Sharma insists..

Competition to go to electricity The automotive industry is undergoing transformation as batteries replace internal combustion engines. After grasping the handle of the latest model FT reporter talks about cars, Technology, and top companies and countries.

Video: Cars, Companies, Countries: Competition to Use Electricity

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Musician Courtney Love shares her story as part of the FT Financial Literacy and Inclusion campaign. Make and lose property: “My family was a victim of all financial crimes,” she writes.

Illustration by Serena Pereira

© Serena Pereira

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