The real disappointment this week: the ECB

Election drama and political uncertainty may be exercising the market in the UK, but sharp falls overnight in stock markets round the world were a reaction to a different factor: the surprising complacency demonstrated by the European Central Bank (ECB) as the bloc's economic outlook deteriorates almost by the day.

When the ECB lifted some supportive measures earlier this year, investors took it as a sign of confidence in a nascent economic recovery in the Eurozone. Since then the Greek debt crisis has deepened, but this week the central bank showed no sign of having taken on board the seriousness of the challenges the EU faces. It was widely expected that the bank would leave rates on hold but the customary commentary betrayed no sense of the tensions now building as other member countries struggle to contain their volatility. The prospect of a hung parliament in the UK is unwelcome, because the w...