Spain and France present disappointing inflation figures today. And this while the European Central Bank (ECB) is currently doing a lot to curb inflation. According to ING senior macroeconomist Bert Colijn, this can be easily explained. “These interest rate hikes will have an effect, but there will be a few months in between.”
Inflation in France and Spain rose by 6.2 and 6.1% respectively. There are two reasons for this, Colijn says. ‘Food prices are a major factor driving up inflation there. But what is also very important for the ECB: the prices of services. They are still stubbornly growing at the moment.’
Colijn thinks these developments are a cause for concern in Frankfurt, especially in light of inflation data for the eurozone as a whole, due to be released on Thursday.
New rate hike
The economist therefore expects that the ECB’s interest rate hikes will not end for the time being. “It is almost safe to say that interest rates will rise another half percentage point in March. And then maybe two more times, maybe in a step smaller than a quarter of a percentage point. Hopefully this will give signs of a decline in core inflation in the summer, which is also somewhat of an expectation.’
United States of America
Colijn sees that the US is also struggling with high inflation, though it has a different cause. ‘Our inflation has been fueled by the energy crisis. In the US it was much smaller, because they don’t have Russian gas there. At the same time, demand has been fueled by Biden’s tremendous amount of economic support.”
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
