German economy bounces as QE draws near

The best-known indicator for the German economy is pointing to a speed-up in growth in the fourth quarter.

Full-blown quantitative easing (QE), or money printing, is drawing nearer in the eurozone, says European Central Bank (ECB) president Mario Draghi. The ECB will "do what we must to raise inflation and inflation expectations as fast as possible". Eurozone inflation is rising at just 0.4% a year, and fears of a Japan-style deflationary slump are spreading.

Draghi's statement sent government bond yields to new record lows as prices rose that's because full-blown QE is expected to involve the ECB buying government bonds with printed money. Borrowing costs for Italy, France and Belgium all hit fresh all-time lows. The latest economic data, meanwhile, was mildly encouraging, with German business and investor confidence ticking up.

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