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#ECB welcomes a strong rebound in activity, but notes that much depends on the evolution of COVID-19

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President of the European Central Bank Christine Lagarde announced the latest monetary policy measures today (10 September). Lagarde said that the incoming data showed a strong rebound in activity, although the level of activity remains well below the levels prevailing before the coronavirus (COVID-19) pandemic.

The ECB welcomed the improved activity in the manufacturing sector and some momentum in the services sector more recently. Nevertheless, the governing council recognized that the recovery was surrounded by significant uncertainty, as it continues to be highly dependent on the future evolution of the pandemic and the success of containment policies.

Domestic demand in the euro area has seen a significant recovery from low levels, although elevated uncertainty about the economic outlook continues to weigh on consumer spending and business investment. Headline inflation is being dampened by low energy prices and weak price pressures in the labour market. Lagarde said this justified continued monetary stimulus.

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Lagarde says the measures taken since early March are providing crucial support to underpin the recovery and to safeguard price stability. Overall, she said the EBC along with measures adopted by national governments and European institutions, continue to support access to financing. She said that an ambitious and coordinated fiscal stance remains critical, but added that interventions needed to be combined with sound structural that could contribute to a faster, stronger and more uniform recovery from the crisis, with a focus on boosting investment in priority areas such as the green and digital transitions.
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