2023-06-30 17:16:22
The financial world has been eyeing Portugal with interest this week. The European Central Bank had invited to the annual ECB symposium. There the heads of the European, American, British and Japanese central banks discussed how to proceed in the fight against inflation. There was agreement that inflation is too high everywhere. There is disagreement on how to deal with it.
ECB President Christine Lagarde held out the prospect of further interest rate hikes in July if developments remained the same and warned of possible second-round effects on the labor market. “Although we currently see neither a wage-price spiral nor an unanchoring of expectations, the longer inflation remains above the target value, the greater these risks become,” said the central bank president. Fed Chairman Jerome Powell, on the other hand, was still unsure whether the US central bank would raise interest rates further or not. The Bank of England took drastic steps just over a week ago when it surprisingly raised the key interest rate by 0.5 percentage points to five percent. With an inflation rate of 8.7 percent, the United Kingdom is currently the sad leader among the G-7 countries. In the EU, the inflation rate was 6.1 percent in May, in the USA it was four percent.
In Japan, on the other hand, the inflation developments were viewed much more favorably. The Bank of Japan wants to be “reasonably certain” that inflation will accelerate after a period of moderation until 2024, said President Kazuo Ueda. Only then will one possibly refrain from loose monetary policy. Japan’s inflation rate was 3.2 percent in May, while core inflation remained below the 2 percent target.
In Spain, the inflation rate fell to 1.6 percent in May, falling back below the ECB’s target of two percent. According to the Spanish statistical office, the reasons are the falling fuel and food prices. And electricity also has a significant share, since in Spain it mainly comes from renewable energy sources and has become significantly cheaper. However, core inflation, i.e. excluding food and energy prices, is currently 5.9 percent in Spain, higher than overall inflation.
Christian Siedenbiedel Published/Updated: , Recommendations: 57 Gerald Braunberger, Sintra Published/Updated: , Recommendations: 3 Christian Siedenbiedel Published/Updated: , Recommendations: 9
In Germany, inflation rose again in June to 6.4 percent, for the first time since February. According to economists, the reasons for this are base effects from the tank discount and 9-euro ticket from last year. The high interest rates and the inflation data for June also weighed on the Dax. The recovery this week was bumpy at best, the 16,000 mark was being eyed, but could only be passed on Friday morning. Nevertheless, the bottom line is a solid plus of 15 percent for the first half of the year. The direction in which things continue also depends on further interest rate developments.
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