Skip to content
Subscriber Only
Markets
Economics

Lagarde Signals New Recession Even as ECB Holds Stimulus

  • Bond-buying, interest rates, bank loans are kept unchanged
  • December forecast for 3.9% growth in 2021 is “broadly valid”
Bavaria's Capital Under Lockdown
Photographer: Andreas Gebert/Bloomberg
Updated on

European Central Bank President Christine Lagarde signaled that the euro-zone economy is headed for a double-dip recession, while insisting that the current level of monetary stimulus is enough for now.

The ECB chief said output probably shrank at the end of 2020, and “a decline in the fourth quarter will travel into the first quarter.” Economists are increasingly predicting a contraction in the first three months of this year as governments extend lockdowns to contain the resurgent coronavirus.