| Videos | Channels | Search |
Deflation: Just how worried should we be?
As inflation in the eurozone is at its lowest level in four years, investors are starting to worry about incipient deflation. Saxo Bank's Nick Beecroft says: “I think it’s pretty serious. I am really reminded of the Bank of Japan’s failure to take bold action in the 1990’s."
Worries over low inflation levels prompted the European Central Bank to cut its benchmark interest rate by 25 basis points last week, one of the reasons which caused the euro to drop.
But Nick argues that this is not enough, because a rate cut was expected in December anyway, so it was only a surprise in the sense that it was a month early.
He argues: “What would be really needed to create a decline in the euro would be a cut in the deposit rate. That would really show that the ECB had finally got the message."
01:48 minutes
Tags: bank of japan, deflation, deposit rate, ecb, ecb rate, ecb rate cut, economy, eu, eu debt crisis, eu economy, eur, euro, european central bank, eurozone crisis, eurozone deflation, eurozone economy, eurozone inflation, financial crisis, france, germany, inflation, inflation rate, inflation rates, japan, japan deflation, japan inflation, lea jakobiak, macro, mario draghi, mark carney, nick beecroft, politics, saxo bank, saxo tv, tradingfloor.com, video