S&P Disinflation Statement

The statement from the credit rating agency indicated that although inflation is not expected to return to the central bank’s 2 percent target by 2025, disinflation should begin to accelerate.

The statement said disinflation had begun to pull the euro zone out of its winter recession, and the growth forecast for the region’s economy was raised to 0.6 percent from 0.3 percent this year. with the strong labor market, the effects of fiscal policy. measures and the possibility of further increases in interest rates.

In the statement, it was indicated that the Eurozone is expected to come out of stagflation in the second and third quarters thanks to the decrease in inflation and the first normal tourism season since Kovid-19, however, it was stated that other post-pandemic Headwinds subsided and high interest rates reduced demand.

“Even in the midst of a weakening business cycle, we do not anticipate the eurozone entering a deep recession,” the statement said. the evaluation was done.

HIGH INTERESTS WILL RESTRICT THE GROWTH OF THE UK ECONOMY

On the other hand, in another S&P statement, it was stated that the increasing pressure caused by the tightening of monetary policy will increasingly restrict the growth of the UK economy.

High employment and strong wage growth have kept UK consumers relatively resilient to inflationary pressures so far this year. At least some of this will continue, but little improvement is expected in 2023 due to high interest rates.

In the statement, it was noted that the Bank of England (BoE) is expected to ease its tightening again in the first half of next year, sooner than markets currently expect, so as not to constrain growth more than necessary. (AA)