The European markets got off to a positive start Tuesday, but remained stuck in a sideways trend for the first few hours of trade. The markets then began to pare their early gains and slipped into negative territory in the afternoon.
Early gains were driven by yesterday’s record setting performance on Wall Street and continued euphoria from the French election results. However, dovish comments from Bank of England Governor Mark Carney and a steep drop in crude oil prices soured the mood among investors. Energy stocks were under pressure as crude prices tumbled to near bear market territory.
The time is not right to begin raising interest rates, Bank of England Governor Mark Carney said on Tuesday, citing the weak wage growth and inflationary pressures.
“Given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anemic wage growth, now is not yet the time to begin that adjustment,” Carney said in his delayed speech at the Mansion House.
The Confederation of British Industry forecast a steady, but subdued economic growth for the UK over the next couple of years as the country faces several headwinds.
In its latest economic forecast, released Tuesday, the business lobby said British businesses and the government should navigate carefully in the months ahead amid the ongoing political uncertainty and Brexit negotiations.
The business group forecast 1.6 percent growth for this year and 1.4 percent for 2018. The outlook for this year was revised up from 1.3 percent and that for next year from 1.1 percent.
The upturn in the German economy is gaining impetus, the Munich-based Ifo economic institute said Tuesday. The Ifo raised its growth outlook for this year to 1.8 percent from 1.5 percent. For 2018, the think tank projected 2 percent growth instead of 1.8 percent.
The German economy is set to sustain its robust growth momentum this year with foreign trade emerging again as the key driver,…