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Euro Zone Inflation Jumps, Ecb Seen Unmoved

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http://uk.reuters.com/article/2011/01/31/uk-eurozone-inflation-idUKTRE70U20720110131

Euro zone inflation rose more than expected in January to further above the European Central Bank's target, but the bank seems more likely for now to step up its rhetoric on price pressures than raise interest rates.

Inflation in the 17 countries using the euro rose to 2.4 percent year-on-year, the European Union's statistics office Eurostat estimated on Monday, holding above the ECB's target of just below 2 percent for the second month running after hitting 2.2 percent in December.

January's rate was the highest since October 2008, when it was 3.2 percent. Economists polled by Reuters had expected 2.3 percent.

While analysts have attributed the rising price pressures mainly to increases in non-core energy costs, the data boosted the euro against the dollar as it kept alive the view that interest rates in the euro zone may rise sooner than previously thought.

The ECB, which aims to keep inflation below but close to 2 percent, next meets on interest rates on Thursday, when it will also face the problem of how to respond to stark discrepancies between the pace of recovery in different euro zone states.

"While the ECB will be far from happy to see euro zone consumer price inflation move further above target..., it is still highly unlikely to prompt the bank into action at its February policy meeting," said Howard Archer, economist at IHS Global Insight.

"It will probably step up its anti-inflation rhetoric and stress that it is prepared to hike interest rates despite growth risks if the current spike-up ... shows any significant sign of leading to a significant pick-up in second round inflationary effects, such as rising wage settlements."

Are we seeing the new unexpected with the phrase "more than expected"?

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Would really expect the ECB to be moved by inflation slightly over target for a couple of months when the BOE has been unmoved by inflation grossly over target for 2 years?

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"It will probably step up its anti-inflation rhetoric and stress that it is prepared to hike interest rates despite growth risks if the current spike-up ... shows any significant sign of leading to a significant pick-up in second round inflationary effects, such as rising wage settlements."

So they want to lower standards of living by as much as possible before the public notice they are being shafted?

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So they want to lower standards of living by as much as possible before the public notice they are being shafted?

Yes, the only inflation the corrupt central banks will target is wage rises - as if that were all that led economies to become moribund and uncompetitive.

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With the Euro at current levels, the ECB would be insane to raise interest rates - unless they are planning to speed up the complete collapse of the PIIGS.

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Yes, the only inflation the corrupt central banks will target is wage rises - as if that were all that led economies to become moribund and uncompetitive.

Nice of them isn't it, and it's only the wages of non bankers being targeted. It's a great system where everyone at the bottom gets shafted.

Viva recovery.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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