By Mark Lowen
BBC Rome correspondent
By Mark Lowen
BBC Rome correspondent
By Andrew Walker
BBC World Service economics correspondent
As Chancellor Rishi Sunak prepares to deliver his first Budget, the European Central Bank president Christine Lagarde has reportedly warned European Union leaders to spend heavily in the fight against the coronavirus outbreak or pay the price of passivity.
Speaking to the bloc's leaders in a conference call late last night, she said there was a risk of a financial crisis if they did not increase spending to deal withe the outbreak, Reuters reported.
According to Melissa Davies, an economist at British financial broker Redburn, the European Central Bank's strategic review is likely to be will be wide-ranging in nature, but perhaps limited in output.
“Inflation remains the main focus and we don't expect anything revolutionary in terms of targets, although the nod to employment suggests a perhaps more US-style dual mandate in future," she said.
“The operating framework has already been changed radically, with scope for further innovation. Environmental concerns could provide a 'wrapper' for further change, including the greening of collateral and quantitative easing assets.”
While the European Central Bank conducts a strategic review of its monetary policy, Ms Lagarde said that the current strategy and inflation target of less than 2% will remain in place.
It is predicted that Eurozone growth will likely to stay the same as now in the next few months, according EY Item Club's Howard Archer.
The European Central Bank has launched its proposed monetary policy review on Thursday.
The review is expected to be concluded by the end of 2020 and will focus on quantitative formulation of price stability, monetary policy toolkit, economic and monetary analyses and communication practices.
The review will also include inancial stability, employment and environmental sustainability.
The ECB said that changes to the world economy and the euro area since 2003 has spurred the review.
Declining trend growth due to slowing productivity and an ageing population, the financial crisis, climate change, rapid digitalisation, globalisation and evolving financial structures have "transformed" the environment in which monetary policy operates, it added.
BBC business reporter
Thirteen minutes into her first introductory statement, Christine Lagarde went off script with a message for those around the world waiting to assess her communication style.
"I know some of you are keen to compare and rate, or rank. I will have my own style. Don't over interpret, don't second guess, don't cross reference. I'm going to be myself. And therefore, probably different."
As head of the International Monetary Fund -- the post she held before taking the reins at the ECB last month -- Ms Lagarde was friendly, but direct in her communications. It's clear that's an approach she wants to continue at the ECB.
During the hour-long press conference, Ms Lagarde refused to evaluate her predecessor's policy decisions....reinforced the ECB's message that governments need to step up spending to support their own economies...and explained the goal of the central bank's strategic review which she announced will start in January.
She frequently used plainer language to explain economic theory....and said she'd admit when she didn't know the answer to a question.
At the end, when Mr. Draghi would normally leave his seat after the last answer, Ms Lagarde wrote her own ending by saying, "Voila..." and then wishing everyone in the room happy holidays.
After watching the ECB press conference, Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics concluded: "Lagarde is off to a good start."
Quote Message: Ms. Lagarde passed the test. Granted, EURUSD is up nearly 0.5% on the day as we type—which would often have counted as a bad day in Mr. Draghi’s days—but the euro’s rise is an entirely logical result of the fact that Ms. Lagarde’s economic assessment was slightly more balanced than in previous statements. Risks remain tilted to the downside, but they are also now 'somewhat less pronounced' due to early signs of stabilisation in the data.
He pointed out that the new ECB president dodged most of the difficult questions by referring to the ongoing strategic review, which will now be done by the end of next year.
He said we should get used to the idea that the Bank will use the review to "dodge bullets" in the next six months.
Quote Message: Lagarde also made it clear that she is not Mario Draghi, and that she intends to communicate with markets in her own way, urging investors not to 'over interpret or second guess' her remarks. That’s all well and good, but you can be very certain that markets will do just that in the next few months. So far so good, though, for the new president and the governing council.
Christine Lagarde is having her patience tested by journalists trying to define her. "Once and for all, I am neither a dove nor a hawk," she replied to one questioner.
"My ambition is to be this owl," she went on, adding that it was a bird associated with wisdom.
Christine Lagarde has been giving some hints about the strategic review that the ECB is planning next year, its first since its inception in 2003.
"There is nothing unusual or extraordinary about having a strategic review," she said. "I myself consider that it is a little bit overdue." She said the review would begin in January and would be completed by the end of 2020. "We will be reaching out to not just the usual suspects."
MEPs, the academic community and civil society representatives would also be consulted, she said. The ECB would be "listening to the views of those to whom we reach out", with "no pre-conceived landing zone".
Christine Lagarde has just issued a thinly-veiled rebuke to those who would seek to compare and contrast her with her predecessor, Mario Draghi, saying she will have her own style of communicating.
"Do not over-interpret, do not second-guess, do not cross-reference. I am going to be myself and therefore different."