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The British referendum on the 23th of June resulted in a vote to leave the European Union, with 51.9% of votes in favour of 'Leave'. The details of the results show an extremely divided UK, highlighting the strong likelihood of a dislocation of the country if a 'Brexit' really happens. The political crisis is set to prevail in the coming months, as is the uncertainty over the future of the country and its relationship with the EU. This will undoubtedly weigh on confidence and economic growth in the UK in the near to longer term.
Highlights: Kazakhstan is in recession for the first time since 2009. Hungary's sovereign rating is at long last back at investment grade. In Algeria, the depletion of the Revenue Regulation Fund has triggered a rise in public debt. Mozambique looks increasingly likely to default on its sovereign debt. April in China: keep your eye on the ball… The Termer government has political difficulties in Brazil.
"...what changes...is that if structural reforms are in place, the time that it takes to reach this objective is smaller, is shorter”. The ECB did not change its monetary policy stance, it reaffirmed its confidence in its tools to support the Eurozone economy but, once again, it insisted on the need for other policy areas to act.
As we went to press in March, the European Central Bank had just announced that it was stepping up its quantitative easing policy. But, thanks to our QE impact indicator, we can already observe its initial effects on monetary and financial conditions.
Following our report "TLTRO II in five questions", we continue our series of technical publications on the ECB. At first glance, the EAPP (expanded asset purchase programme) is a simple quantitative easing programme, and the 2008 crisis taught us what a QE programme is. However, as always as far as the Eurozone is concerned, things are a little bit more complex.
FOMC voters want to keep their options open for raising rates in June. They seek to "maintain the flexibility to make this decision based on how the incoming data and developments shaped their outlook for the labor market and inflation as well as their evolving assessments of the balance of risks around that outlook." Fed officials generally saw the Q1 growth slowdown as temporary and noted that labor market conditions continued to strengthen while inflation continued to run below the 2% objective.
On 10 March 2016, the ECB announced a second series of TLTRO with easier conditions than the first series. At the four quarterly operations (from June 2016 to March 2017), banks will be able to borrow for four years at a rate between -0.4% and 0%, depending on their lending to the private economy.
Edition June 7, 2016
Latin America: structure of income tax
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