The Latest on Inflation

News and updates

This page intends to point out and illustrate the latest news on inflation in Europe.
It refers to newspapers, magazines, and specific examples.


Inflation Expectations

January 2023:

New data from the European Central Bank indicates that consumers expect inflation in the coming years to be 2.9 and 4.6 percent (mean to median range) - substantially above the ECB's target of 2.0 percent. The small drop in the latest survey is seen as a positive sign.

Reading:
ECB


Risky European Debt

December 2022:

New research published by Bruegel shows (i) the Next Generation EU plan substantially increases EU debt and (ii) EU debt is considered far more risky than that of Germany.

Reading:
Bruegel


ECB Inflation Forecast

December 2022:

According to the latest ECB forecast, inflation in the Euro area will only come down to 2% in Q3 of 2025 (see indicators). This implies that from Q1 2020 to Q1 2025, in just five years, the Euro loses a quarter of its purchasing power.

Reading:
ECB


Falling Container Freight Rates

December 2022:

Prices for international container shipping peaked in summer 2021 and have fallen sharply ever since. The composite index today is about a quarter of its peak value.

Reading:
MacroMicro


Shrinking CB Balance Sheets

December 2022:

There are first signs that central banks are reducing their balance sheets. The latest data from the Federal Reserve, the European Central Bank, the Bank of Japan, and the Swiss National Bank are all below peak.

Reading:
Financial Times


Rising Food Prices

December 2022:

Food price inflation continues to grow. The latest Eurostat data from October indicate that food in Germany got almost 20% more expensive within a year.

Reading:
Eurostat


Falling Oil Price

November 2022:

One reason why rates of inflation could possibly decrease somewhat in the near future is that energy prices have not continued to increase. The oil price, for instance, is down around a third from its peak earlier in 2022.

Other commodity prices are also easing (see Indicators), leading to reduced PPI.


Eurozone Wage Growth Accelerating

November 2022:

New data from job ads indicate increased wage growth in the Euro area. Median pay is 7 percent higher than a year ago in Germany. This could signal the beginning of a wage-price spiral.

Reading:
Financial Times


Euro Area Inflation jumps to 10.7 percent

October 2022:

The latest data from Eurostat documents another record for the rate of consumer price inflation in the Euro area. All three major economies - France (7.1), Germany (11.6), and Italy (12.8) - are far above the 2% target.

Reading:
Eurostat



Inflation 10% in Euro Area, 3.3% in Switzerland

October 2022:

The inflation developments in the Euro area and Switzerland diverge further: While the EA sees a jump to 10.0%, Switzerland observed a reduction to 3.3% in September.


The Great Tightening

September 2022: 

The renowned weekly magazine The Economist discusses the "great tightening" - central banks raising interest rates. Moreover, the author points out the lack of international coordination.

Reading:
The Economist


Shrinking Central Bank Balance Sheets

September 2022:

Data compiled by Macrobond illustrates that major central banks have started to shrink their balance sheets to combat soaring inflation.

Reading:
Macrobond


Rising Inflation Expectations

September 2022:

The ECB's Consumer Expectations Survey reveals that for the next 12 months, people expect on average seven percent inflation (median: five percent).

Reading:
ECB


Drivers of Global Inflation

September 2022:

The International Monetary Fund analyzed the drivers of inflation for 88 countries. As the chart indicates food and energy are the main factors.

Reading:
IMF


Inflation Top Public Concern

August 2022:

Inflation is the number one global concern according to Ipsos. In July, 38% said it is one of the top issues facing their country today. The market research firm conducted surveys across 27 countries between June 24 and July 8, 2022.

Reading:
Ipsos


Anti-Fragmentation in Action

August 2022: 

Newly released data by the ECB indicate that the central bank has used funds freed up by maturing debt to purchase Southern European debt, pushing their yields down. "Net holdings in German, French and Dutch bonds dropped by 18.9 billion euros ($19.3 billion) through July. Net purchases of debt from Italy, Spain, Portugal and Greece totaled 17.3 billion euros."

Source of image and reading:
Bloomberg


OECD Inflation above 10%

August 2022:

Consumer prices in OECD countries, a club of 38 rich countries, rose above ten percent. This is the first time since the late 1980s.

Reading:
OECD


Record-High Inflation in the Euro Area

July 2022:

The latest update from Eurostat shows 8.6% inflation in June, far above the 2% goal stated by the European Central Bank.

Reading:
Eurostat


Surging Producer Prices

June 2022:

Producer prices in Europe's largest economy continue to surge. The latest update shows an increase by 33.6% year-on-year. A new all-time record.

Reading:
DeStatis


New Public Debt Crisis?

June 20222:

As bond yields climb everywhere, Credit Suisse analyzed the risk of a new public debt crisis. The data shows how governments have exploited the record-low interest rates of recent years to extend the average maturity of their debt portfolios and lock in the benefit of low interest rates for a longer period.

Reading:
Credit Suisse


Rising Bond Yields

June 2022:

A saying in London pubs has it that there is no number between two and six. The same might hold for Italian bond yields. At 3.65 percent, they are now higher than during the short peak following ECB President Lagarde's comments in spring 2020.

Reading:
MarketWatch


Supply Chain Pressure

June 2022: 

The latest update on the supply chain pressure index shows a modest decrease but is still at a very high level compared to previous years.

Reading:
Liberty Street Economics


Euro Area Inflation

June 2022:

Currently, we see four record numbers for inflation in the Euro area. The maximum, the minimum, and the average rate of CPI inflation are at a record high. On top, the difference between the lowest and highest rate was never that large.

Reading:
Cash.ch


Stronger US Dollar

May 2022:

The US Dollar has recently started to surge in value. Both the Euro and the Swiss France depreciated strongly. This will raise energy prices in Europe.

Reading:
Indicators


Wage-Price Spiral?

May 2022:

The Bank for International Settlements (BIS) examines whether major advanced economies are on the verge of a wage-price spiral.
If inflation remains high, households may ask for higher wages and firms may raise prices. And stubbornly high inflation may lead to institutional changes such as automatic indexation and cost-of-living adjustment clauses.

Reading:
BIS, May 4, 2022


Industrial Producer Prices in the Euro Area

May 2022:

Eurostat just announced that industrial producer prices in the Euro area are up 36.8% compared with a year ago.

Reading:
Eurostat, May 3, 2022


Surging Food Prices

April 2022:

The Food and Agriculture Organization of the United Nations Food Price Index surged in March to a new highest level since its inception in 1990.

Reading:
FAO, March 10, 2022


German Inflation at 7.6%

March 2022: 

The Federal Statistical Office in the largest Euro economy expects 7.6% inflation for March 2022, a 40-year high for Germany.

Reading:
DeStatis, March 31, 2022


30-Year High Inflation in the UK

March 2022:

The government has set the Bank of England a target of keeping inflation at two percent. Yet, the latest reading shows 6.2%, a 30-year high.

Reading:
ONS, March 23, 2022


Global Commodity Prices rally

March 2022:

The latest data indicate that global commodity prices are on track for the biggest weekly rally in more than fifty years. Prices have doubled since April 2020.

Reading:
Financital Times, March 3, 2022


Producer Prices in Germany surge

February 2022: 

Producer prices in Germany in January 2022 were 25% higher than in January 2021. This was by far the largest increase in ever recorded. The dashed line shows 2%.

Reading:
DeStatis, Feb 21, 2022


ECB discusses House Price Inflation

February 2022:

ECB executive board member Isabel Schnabel tells the FT that the house price surge 'cannot be ignored'. However, the key ECB measure for inflation does so - and will continue to do so.

Reading:
Financial Times, Feb 16, 2022


Asset Price Inflation in Germany

February 2022: 

Flossbach von Storch reports asset price inflation in Germany at 9.2% in the year of 2021. There is a decline in Q4, yet inflation remains exceptionally high.

Reading: 
FvS, Feb 15, 2022


House Price Inflation feeds CPI Inflation

February 2022:

New research by the San Francisco Fed provides empirical support for the idea that changes in house prices ("asset price inflation") predict CPI inflation a year later: "This prediction translates into an additional 1.1pp increase in overall CPI inflation for both 2022 and 2023."

Reading:
Fed, February 14, 2022


Record-High Producer Price Inflation in Germany

February 2022:

The German Federal Statistical Office (Destatis) reports that in December 2021, the index of producer prices for industrial products increased by 24.2% compared with December 2020, 10.4% when excluding energy.

This was the highest increase ever.

Reading:
DeStatis, Feb 10, 2022


Rising European bond yields

February 2022:

The ECB's refusing to rule out a potential rate rise this year contributed to higher borrowing costs for eurozone governments.

Reading:
Financial Times, Feb 7, 2022


US inflation at 40-year high

January 2022:

Consumer prices in the United States grew by 7.0% in 2021. This marks the highest rate of inflation since 1981.

Data from the US BLS.


Highest rate of inflation ever in the Euro area

January 2022: 

According to Eurostat, with 5.0% the rate of consumer price inflation (HICP) is at an all-time high.

Reading:
Financial Times, Jan 7, 2022


Asset Price Inflation in Germany at Record High

November 2021: 

Prices for assets owned by German households have risen by +12.1% compared with the same quarter a year earlier. This is the highest price increase since the start of the time series in 2005. Assets are now almost 30% more expensive than in 2017.

Source:
Flossbach von Storch


Special Bloomberg issue on inflation

November 2021:

Bloomberg Businessweek features a special report on inflation. 

"The fear is real. But maybe the monster is not."