Jens Weidmann said in the text of a speech that "politically brought about
devaluations" do not lead to improved economic competitiveness. He also said
indicators suggest the euro is "not seriously overvalued".
The euro has strengthened recently, raising concern it will hurt exports from
the 17 euro countries, AP reported. French President Francois Hollande has
suggested the eurozone needs to manage its exchange rate.
Weidmann sits on the ECB's 23-member rate setting council and heads Germany's
Bundesbank national central bank.
ECB President Mario Draghi indicated the bank does not seek any particular
exchange rate, which is set by markets, but is monitoring the stronger euro's
effect on inflation.
Since the introduction of the single currency in 2002 the Euro has appreciated
35% vs the once once-great British pound. It's not that the Euro is overvalued
but rather the fact that Sterling is in Terminal decline. Being the Nr1
private debt/Gdp% country in the world without any growth prospects, incompetent
and destructive Tory politcians and a budget deficit worse than Spain the only
way out for Sterling and the UK is further impoverishment & print print
print...
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Police raided two British meat companies on Tuesday in their first action – jointly with food standards officials – into food fraud and the horsemeat scandal.
Officers entered Peter Boddy Licensed Slaughterhouse in Todmorden, West Yorkshire, and Farmbox Meats Ltd near Aberystwyth in Wales, as they investigated the circumstances in which horsemeat was sold as beef "for kebabs and burgers".
The Food Standards Agency said in a statement it believed Peter Boddy Licensed Slaughterhouse supplied horse carcasses to Farmbox Meats.
"The FSA has suspended operations at both these plants. Both West Yorkshire and Dyfed-Powys police have entered the premises with the FSA. The FSA has detained all meat found and seized paperwork, including customer lists from the two companies."
On Tuesday night the main entrance to the Todmorden abattoir, on a hillside above the town in West Yorkshire, was blocked by a tractor. Two people who appeared to be guarding the entrance refused to answer questions, and insisted journalists could not enter the grounds of the abattoir. Nearby farmers also refused to comment.
Andrew Rhodes, the FSA's director of operations, said he had ordered an audit of all abattoirs processing horses in Britain after this issue first arose last month. "I was shocked to uncover what appears to be a blatant misleading of consumers. I have suspended both plants immediately while our investigations continue."
The Bank of England is expected to downgrade its growth forecasts on Wednesday and warn of more financial pain for households after figures confirmed inflation remained above target last month.
Economists predict the central bank governor, Sir Mervyn King, will paint a grim picture of rising inflation and difficult economic conditions when the latest quarterly forecast is released.
In an unexpected statement to support its decision to keep interest rates on hold last week, the Bank's monetary policy committee warned inflation was likely to rise in the coming months and might remain above the 2% target for another two years.
The Office for National Statistics said the Consumer Prices Index (CPI) held firm at 2.7% in January for the fourth month in a row.
Retail Prices Index (RPI) inflation, which includes housing costs, rose to 3.3% in January from 3.1% in December.
Experts predict energy price increases and rising food prices could push CPI above 3% by the summer.
That means one of incoming Bank governor Mark Carney's first tasks this summer could be to write a letter to the chancellor to explain why inflation is more than one point above target
The Bank of England governor, Sir Mervyn King, insisted a "recovery is in sight" but warned the path ahead for the UK economy will not be smooth in part because there are limits to what more economic stimulus can achieve.
Nevertheless, he said the central bank remained ready to do more to help the economy if needed.
"We must recognise there are limits to what can be achieved via general monetary stimulus – in any form – on its own," he said.
Sterling tumbled on the gloomy outlook for the UK and the prospect that the Bank's monetary policy committee, ignoring recent good news from higher construction output, will inject more funds into the economy. The pound fell to $1.55, down a cent on the previous day.
The governor appeared baffled that ministers had sanctioned large investments in green energy through higher prices and the near trebling of university fees, which raised inflation and made the MPC's job harder.
King said it was "an own goal" by the government, though he assumed they had taken the impact on inflation into account when they agreed the policies.
The Bank of England is under pressure from monetarist economists to bring down inflation by raising interest rates to allow a period of real wages growth. Some economists believe that only with higher consumer demand will the economy regain its previous momentum.
Challenging this view are economists who argue the central bank should inject more money into the economy to improve lending conditions.
The incoming governor, Mark Carney, hinted last week that he may press for the bank to be more aggressive in its attempts to boost growth.
King said the MPC was committed to "looking through" the current high inflation because some of the rise came from one-off factors, such as the near trebling in university tuition fees, and the risk that higher interest rates would crash the economy and push inflation below its target.
"Attempting to bring inflation back to target sooner would risk derailing the recovery and undershooting the target in the medium term," he said.
The central bank has spent £375bn on buying government bonds but has held off from increasing the programme.
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