Following yesterday’s surging German inflation print of 6% and Spanish inflation of 5.6%, it was clear that today’s broader euro area inflation figure was going to be a hot number.
30 November 2021
Coming in at 4.9%, this was ahead of 4.5% estimates and continues to point to the impossibly incongruent argument from central bankers that this cost push inflation is transient. As the new, more infectious coronavirus variant lays down roots across the globe and parts of Europe re-enact lockdowns, what does that mean for more persistent inflation shocks? It may be wishful thinking on the part of ECB President Lagarde when she declares that price pressures won’t run out of control – they already are and it’s difficult to follow the argument that it will abate soon. The ECB decides in just over two weeks whether to end its bond buying from next March as previously planned – that decision still hangs largely on the apparent danger of this new variant. That information will likely be released close to the wire of its meeting, so further policy missteps are potentially ahead.
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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.