Weekly Export Risk Outlook, March 18

03.19.2015 ZF English

Corporate tax cuts will stimulate investments in the United Kingdom, while Russia and Ukraine adjusted their respective monetary policies amid deep economic contraction, Euler Hermes noted in this week's Export Risk Outlook report.

Starting April 1, the corporate tax will be cut by a further 1 percentage point to 20%, the lowest level in G-20, Euler Hermes analysts wrote in this week's report.

The move will have seen the tax reduced by 10 percentage points, from 30% in 2009, and will free up some cash for companies. The tax cut will also stimulate investment by both domestic and foreign corporations, due to higher rates of return, the report reads.

In the East of Europe, the central banks in Russia and Ukraine took divergent moves, as they confront a deep recession. The Russian bank lowered interest rates, despite the high increase in prices, and it seems it has shifted its focus from inflation targeting to supporting the banking sector and the economic growth.

Meanwhile, the Ukrainian policy makers raised the key rate, as inflation surges, while the hrivna touched an all-time low against the US dollar, as foreign currency exchange reserves are in freefall.

See other information about the European and global economies, in the full report.