Thursday, May 2, 2013

German bond yields hit record low after ECB rate cut falls short

Yields on 10-year German Bunds fell to an all-time low of 1.16pc, signalling the risk of a deflationary crisis and a slide towards outright depression.

Mario Draghi, the ECB’s chief, said the bank “stands ready to act” with further stimulus if needed but insisted that the economy would recover “later this year”.

The bank failed to deliver the expected measures to alleviate a serious credit crunch for small firms across Southern Europe, agreeing only to study possible options.