Two European Central Bank policymakers are of the opinion that the prospect of the effectiveness of the Covid-19 vaccine over 90% is breaking news. However, the European zone is still affected by the increase in cases of Covid-19 infection which has an impact on economic activity.
Spanish central bank governor Pablo Hernandez de Cos and ECB board member Isabel Schnabel reiterated President Christine Lagarde's speech, which further strengthened hopes for a new stimulus in December.
De Cos said that the news of the effectiveness of the Vaccine has boosted the confidence of investors, consumers and economic activity.
A Pfizer report stating Monday that the COVID-19 vaccine has an effectiveness of more than 90% has pushed the company’s stock higher.
On the other hand, Schnabel said the latest restrictions would likely reduce economic growth projections in the fourth and first quarters of next year. He added that the vaccine only reverses the basic scenario that the economy will fall 8.0% in 2020 and recover by 5.0% in 2021.
The ECB is expected to announce a new stimulus package in December. This week, Lagarde has added information that the latest stimulus will include the purchase of bonds and the provision of subsidies to banks.
