Economic security

Europe Deploys The Super Bazooka

The global economy has faced one its periodic growth scares in the last few months. All the classic signs are present. Equities have slumped, business confidence is slipping and economists have cut their expectations for growth and inflation for most countries. 

Pressure on policymakers to "do something" has mounted. But so, too, have concerns that policy stimulus is becoming increasingly ineffective and that, as the Economist front page put it a couple of weeks ago, policymakers are "Out of ammo".

Last week the European Central Bank sought to convince markets that it has plenty of ammo and new weapons with which to deploy them. In policy terms last week's ECB announcement was a "super bazooka".

The ECB has turned up the volume of its existing programme of money printing, or Quantitative Easing, raising the amount of assets it buys each month from Ђ60 to Ђ80 billion euros.