Business

Eurozone inflation at four-year high of 2% increases pressure on European Central Bank

Eurozone inflation at four-year high of 2% increases pressure on European Central Bank”

Eurostat, the European Union's statistics agency, said Thursday that consumer prices across the eurozone were 2 percent higher in the year through February.

On a non-harmonized basis, annual inflation also picked up to 2.2 percent after 1.9 percent in January.

Preliminary data from several German states showed that consumer price inflation accelerated across the country, mainly driven by higher food, energy and transportation costs.

As a result, the news is likely to bolster pressure from some European nations for the bank to end its extraordinary monetary policy support for the bloc's economy.

Strategists said lower core inflation, a measure that excludes the effect of sharply rebounding energy prices over the past year, could temper the market reaction because it would signal that consumer price growth may not be durable over time.

In December, the ECB said it would extend its bond-buying programme until at least December 2017, and caution that it is unlikely that the central bank will further limit its QE program on the news, at least in the short term. According to a survey of 3,000 companies by data firm IHS Markit, eurozone manufacturers raised their prices at the fastest rate in over 5 1/2 years during February as their costs jumped.

Europe's benchmark German 10-year yield hit a 10-day high, buttressed by expectations that the U.S. Federal Reserve is set to raise interest rates later this month. Stimulus critics, however, have grown louder as the eurozone economy recovers and inflation nears the bank's goal of just under 2 percent.

The bank has cut its main interest rate to zero and embarked on the bond-buying programme to try to stimulate growth in the eurozone and avoid deflation, or falling prices.

In December, the European Central Bank chose to continue bond purchases through the end of this year while reducing them from 80 billion euros ($84 billion) a month to 60 billion euros a month from April.

Policymakers could point out that the oil price fuelled inflation surge is temporary, growth is fragile and the outlook is fraught with uncertainty given elections in France, Germany, the Netherlands and possibly Italy.

Unemployment has also fallen steadily.

Eurostat estimates that the number of unemployed people in the eurozone fell by 56,000 to 15.6 million.



Like this

Latest


04 March 2017
DOL Calls For 60-Day Delay To Fiduciary Rule Implementation
The Labor Department will now take comments for 15 days on whether to finalize the proposed extension. The Financial Services Roundtable, a lobbying group, issued a statement praising the delay.

03 March 2017
Spotify Is Testing A Premium Hi-Fi Lossless Audio Option
It makes sense that Spotify might want to give users the option-as a bonus, the new tier will bring in more revenue. The days of low-quality audio streaming may be behind us, at least as far as Spotify is concerned.

03 March 2017
Darryl Sutter and former Flames captain Jarome Iginla reunite in Los Angeles
In exchange, LA will be sending the Avs a conditional fourth-round draft pick for the 2018 National Hockey League draft. Louis for the final playoff spot in the Western Conference, Iginla could have a chance to win his first Stanley Cup.

03 March 2017
Active Volume Stock: Office Depot, Inc. (NASDAQ:ODP)
The stock is now moving above its 20-Day Simple Moving Average of -8.32% with the 50-Day Simple Moving Average of -8.32 percent. According to their observations and findings, the stock could provide a high EPS of $0.08/share and a Low EPS of $0.04/share.

03 March 2017
Nigeria says economy shrank 1.51 pct in Q4 2016
That exceeded forecasts for an increase of 0.8 percent following the 0.5 percent contraction in the third quarter. The non-oil sector, while increasing its share of the GDP to 92.85 percent, also declined in 2016.

03 March 2017
Syria opposition pin hopes on Trump after 'catastrophic' Obama
Russian Deputy Foreign Minister Gennady Gatilov said on Tuesday a U.N. I was impressed by the level of depth we were able to get.

28 February 2017
Dealt to Los Angeles
Bishop compiled a 54-34-7 record at ME with a 2.29 goals-against average and a.912 save percentage in his three seasons. The Kings will also receive a fifth-round draft pick from the Lightning .

27 February 2017
Group gathers at Statehouse rallying to keep Affordable Care Act
It has extended health care coverage to millions of Americans since its passage. About 150 people, many employed in the healthcare sector, gathered outside U.S.

26 February 2017
Warren Buffett rips hedge funds for 'huge' fees, defends immigration
Berkshire Hathaway Inc. owns more than 90 companies, including railroad, clothing, furniture and jewelry firms. Net earnings attributable to Berkshire shareholders totaled $24.07 billion, versus $24.08 billion in 2015.

26 February 2017
Pitt vs. North Carolina: Open Gamethread
North Carolina (24-5, 12-3 ACC) holds a two-game lead over a quartet of teams - Louisville, Duke, Florida State and Notre Dame. The Panthers will close out the regular season with games at Georgia Tech on February 28 and at Virginia on March 4.



Recommended