Contact Your Financial Adviser Money Making MC
30 June 2017
 |
Eurozone (The Total Investment & Insurance Solutions)
Inflation across the 19-country eurozone held up better than anticipated
in the face of waning energy prices, a sign that the region's economic recovery
is reverberating across the single currency bloc, official figures showed
Friday. The Total Investment &
Insurance Solutions
In its first estimate of inflation for June,
Eurostat, the European Union's statistics agency, found that consumer prices
rose by an annual 1.3 percent, down slightly from 1.4 percent the month before.
Though the rate has not been lower since
December, the decline was more modest than financial markets had anticipated.
That was likely due to the fact that the core inflation rate, which strips out
the volatile items of food, alcohol, energy and tobacco such as energy, rose to
1.1 percent in the year to June from 0.9 percent. The Total Investment & Insurance Solutions
The increase in the core rate is a further
sign that many prices are being pushed up by higher wages as unemployment
across the region steadily falls and economic growth improves.
A run of economic data recently has raised
hopes that the eurozone economy is gaining momentum, fueling speculation that
the European Central Bank may start reining in its stimulus sooner than
predicted. Earlier this week, ECB President Mario Draghi spoke of a
"firming and broadening" recovery, words that investors interpreted
as a move to lay the groundwork for a change in policy. As well as slashing
interest rates, including its main one to zero, the ECB has been buying bonds —
currently about 60 billion euros ($68 billion) per month — to keep market
interest rates down and encourage lending across the economy. The Total Investment & Insurance
Solutions
The ECB's primary policy aim is to keep the
inflation rate just below 2 percent. A little bit of inflation is considered a
good thing for an economy as it encourages consumers to spend now and
businesses to invest. Inflation in the eurozone has been below target for most
of the past few years, turning negative at times. However, it's been rising steadily
in recent months as oil prices have bounced back from multi-year lows and in
February inflation actually hit 2 percent.
Energy prices remain the main driver of the
headline rate as evidenced in the June figures. The main reason inflation rate
fell to a 2017 low in June was the fact that energy prices were up only 1.9
percent from the year before compared with a 4.5 percent gain the previous
month. As recently as February, they were 9.3 percent higher. The Total Investment & Insurance
Solutions
Analysts said the inflation figures are
unlikely to prompt any immediate turn in sentiment, and the euro remained flat
at near 14-month highs of $1.14. The
Total Investment & Insurance Solutions
Jennifer McKeown, chief European economist at
Capital Economics, said the figures will "add to the ECB's sense that
reflationary pressures are appearing" but that the bank will remain
cautious.
"The ECB will keep saying that the pace
of normalization will be slow and that interest rate hikes are a long way
off," she said.The Total
Investment & Insurance Solutions
No comments:
Post a Comment