The European Central Bank (ECB) left the deposit rate at -0.4 per cent and the main refinancing rate at zero per cent while retaining the course of its bond-buying programme.

In the news conference after the meeting last Thursday, ECB president Mario Draghi indicated that the central bank is in wait-and-see mode after announcing an aggressive round of easing measures in March. Draghi also brushed off German criticism that the ECB’s stimulus is hurting the country’s savers and vowed to use all the tools at his disposal for “as long as needed”.

Some economists had speculated that the central bank chief would lay the groundwork for further easing or even hint at so-called helicopter money, where the bank effectively injects cash into the economy to bring about a consumer shopping spree. But Draghi stressedthat the ECB’s policy-setting committee did not discuss using helicopter money.

Meanwhile, producer prices in Germany registered their biggest annual decline in over six years as these were pulled down by low energy prices, the Federal Statistical Office said last week. Factory gate prices in March were unchanged from February, but fell 3.1 per cent from March last year. This is the sharpest annual decline since January 2010. Economists had predicted a monthly rise of 0.1 per cent, but an annual decline of 2.9 per cent. The data show there is limited upward pressure on German consumer prices from the production side.

Ever volatile energy prices once again had the largest effect on producer prices. Excluding energy prices, producer prices in Europe’s largest economy slipped by 0.1 per cent from February and dropped by 0.9 per cent from March 2015.

Finally, data from the Office for National Statistics (ONS) showed that UK unemployment was un­changed at a 10-year low in three months to February. The unemployment rate came in at 5.1 per cent. This remained the same from the previous three months and met economists’ expectations. The ONS also reported an increase in average earnings, including bonuses that rose by 1.8 per cent compared with a year earlier. Excluding bonuses, earnings increased by 2.2 per cent compared with the previous year.

This report was compiled by Bank of Valletta plc for general information purposes only.

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