The “will they, won’t they” saga over European economic stimulus continues. Analysts are divided over whether the European Central Bank will announce a bigger boost for the struggling economies of the eurozone at its monthly meeting on Thursday.
The ECB is already buying asset-backed securities (bundles of bonds) in an attempt to stimulate lending, but many economists would like to see some more aggressive stimulus to pull the eurozone out of its current economic morass.
Figures released last Friday revealed that unemployment in the 18-country currency zone is stuck at 11.5%. In Italy the jobless count has risen to 13.2%, while in Greece and Spain, a quarter of the working population is out of work.
But Jens Weidmann, the ECB’s hawk-in-chief, said that central banks didn’t have “an Aladdin’s lamp that you just have to rub to make all wishes come true”, dampening hopes that the bank might announce a full-blown quantitative easing programme next week. The head of the ECB, Mario Draghi, is likely to step up his calls for further economic reform within troubled eurozone countries. In a speech last week he warned that lack of reform could create a permanent divergence within the currency union, which would have “potentially damaging consequences for us all”.
Tui keeps its place in the sun
When it publishes results on Thursday, Tui Travel is expected to reveal that it had a glorious summer in 2014, selling plenty of holidays to sunseeking Brits and Germans. But despite the sunny mood, Tui’s share price has been on the slide. Along with other travel companies, Tui has been hit by nervous investors fretting about everything from the slowing global economy to Ebola. This week, rival Thomas Cook ousted its award-winning chief executive Harriet Green, as it admitted it had not sold enough winter holidays and faced difficult trading conditions. But Thomas Cook, which nearly went bankrupt three years ago, is less prepared for choppy economic weather than its rival.
Tui, whose shareholders voted to merge with its German parent company last month, has been gaining customers as a result of an early move into more upmarket hotels. Think of Thomas Cook as the sunburnt holidaymaker sleeping off too many sangrias, and Tui as the one up at 6am to bag the best sunlounger.
Or as Wyn Ellis at Numis Securities puts it: “We believe that Tui Travel is a better-quality business than Thomas Cook and do not expect any surprises.”
Co-op will put Balls on a sticky wicket
Ed Balls will find out this week if he is to lose thousands of pounds in campaign money when the Co-op Group reveals its decision on political funding. The shadow chancellor is among more than 30 Labour and Co-operative MPs who are backed by £1m a year from the group. The future of these donations will become clear when the Co-op publishes its “have your say” survey this week.
Results of the poll of the Co-op’s seven million members are coming out some six months later than promised, because of internal wrangling at the Co-op over governance reforms. Former chief executive Euan Sutherland had promised to publish by last May, but walked out in March after details of his £6.6m pay deal were leaked to the Observer, complaining that the group was “ungovernable”.
But even if members decide against further political funding, there will be no final decision until the Co-op’s next annual meeting, which is expected to take place in late spring or early summer – after the general election on 7 May.
The timing raises an awkward question for Balls and his fellow MPs in the cash-strapped Labour party: could they continue to take Co-op money if members had voted against it? The results of this poll will be widely read.
