Victory? Inflation Target Comes Into View For Shell-Shocked ECB
Inflation is basically back to target in Europe.
I can hear the jeers and protests now. I didn't say there weren't caveats. There are. Not least of which is that the headline rate may well re-accelerate on base effects and math tied to fiscal measures that dampened the impact of last year's energy crunch.
But when it comes to inflation news in the developed world, policymakers will take whatever wins they can get. And the preliminary read on headline euro-area inflation for November was 2.4%.
If there are doubts that rate hikes are what brought inflation down in the US, would that not be more so in the EU, where energy and other commodities were such a large part of inflation?
perhaps Europe generally is much closer to / or already in recession compared to the US…that could account for differences in inflation…
I agree that the EU exonomy wasn’t doing as well as the US (especially with the debt challenged countries) but maybe another factor is culture: Europeans are far more personally fiscally responsible (much less use of credit and mortgages). With high interest rates they’re even less likely to spend (unlike us spendthrifts burning through savings and right on to credit). Voila!