Draghi pumps money into eurozone
Britain poised for feelgood windfall as ECB opens floodgates
It will mean cheaper European holidays and lower cost imports for businesses and consumers and provide a potential feelgood mood among voters ahead of the General Election.
The news of the massive bond-buying by the European Central Bank sent the euro to a fresh 11-year low against the dollar while sterling rocketed to a six-year high against the single currency.
ECB president Mario Draghi (pictured) announced that €60 billion (£45bn) a month would be spent buying private and public securities – bigger than expected – until September next year.
The massive injection of money into the flailing eurozone economies had an immediate impact on currencies, pushing sterling to its highest rate against the euro since the banking crisis and prompting the FTSE100 of leading stocks to hit a four-month high.
The index finished the session up 1%, gaining 68.59 points to 6,796.63. The index has not closed above this level since 19 September when it settled at 6,837.92.
Totalling at least €1trn, the bond-buying scheme is the equivalent of just over 10% of eurozone gross domestic product, making it close in size to the initial bouts of QE undertaken by the US Federal Reserve and the Bank of England. It is designed to tackle deflationary pressures.
John Cridland, director-general of the CBI, said: “Quantitative easing will give the eurozone recovery a much-needed boost, which should also have a positive economic effect in the UK.”