finance

Bank of England could signal shift towards stimulus withdrawal – business live


Right now, the sky is the limit for confidence indicators in Germany and indeed, the entire eurozone. The end of lockdowns and the reopening of economies has clearly boosted expectations. In the case of Germany, despite anecdotal evidence, particularly in the automotive industry, of supply chain disruptions affecting activity, the impact apparently has not been strong enough yet, to dent growing optimism.

Looking ahead, the general outlook for the German economy has improved. The vaccination programme has picked up speed and with currently more than 50% of the population having had a first jab, the reopening of the economy has gained momentum, too. New variants of the virus, however, could still spoil the reopening party.

The only problem so far has been that hard data, which is only available until April, has not yet matched these expectations. On the contrary, the start to the second quarter was rather sluggish. If the past relationship between soft and hard data holds, this catch-up with the strong optimism should happen soon.

German football supporters have learned the hard way that strong optimism does not necessarily always lead to strong results. Let’s hope the economy can do better.



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