Eurozone weekly economic briefing – A mixed start to the year
The news for Europe at the start of the year has been mixed. The spread of the Omicron variant has resulted in a predictable surge in infections, in many countries widely surpassing previous waves.
What you will learn:
- There are encouraging signs that this new variant is having a much milder impact, partly because of the increased protection offered by vaccines.
- This means lighter restrictions and a smaller economic impact than seen during the last winter wave.
- December PMIs confirm the notion of a slowing eurozone economy at end-2021, with Germany being the country hit hardest.
Why an ageing population doesn’t mean soaring inflation
What’s the future for inflation? Joachim Nagel, the new president of Germany's central bank, believes the rapidly ageing global population will play a key role – ramping up pressure on prices in the medium term. While we agree slowing labour supply will stifle output growth, in his recent discussion Nagel failed to fully consider the demand side of the argument.Find Out More
Surging global food prices could drive eurozone core inflation higher
Along with energy prices, global food prices have emerged as a key driver of the eurozone's current inflationary surge. Like other advanced economies, eurozone countries tend to be less exposed to global food price fluctuations. But if persistent and combined with strong demand, high food prices could result in a higher pass-through to core inflation.Find Out More