By Mary Akbulyakova
Yesterday was the second day of good economic news from the European Union: the inflation in the whole area accelerated in January, reaching an annual rate of 1.8% and meeting the target of "just below 2%" of the European Central Bank (ECB).
In turn, the unemployment marked the lowest figures since may 2009, down from 9.7% in November to 9.6% in December.
The economy of the block is expanded at a rate of 0.5% in the last quarter of 2016, above the two previous periods, ending the year with solid growth of 1.7%.
Support of Germany and France
After the inflation data revealed on Monday –which reached a record high of 1.9% in January– Germany shows further signs of rebound in the economy: the unemployment rate fell in January to a historic low of 5.9%, the lowest level since the country’s reunification in 1990. In absolute figures, there were 26,000 people unemployed, compared with 5,000 predicted.
The recovery of the euro zone is also supported by data from the second economy of the bloc. In France, inflation marked its highest in more than four years, coming in at 1.6 per cent rate year-on-year in January. The price rise was fuelled by a 10% increase in the value of oil and 8.7% in the food.
The economy expanded by 0.4% in the last quarter of 2016, bringing the total for the year to 1.1%. The growth was driven by solid consumer spending and an increase of 1.3% in investments, easing fears that the upcoming elections will put the demand in a "standby mode".
Pressure on the ECB
The latest data increase the pressure on the European Central Bank to end its massive program of buying bonds 2.3 trillion (million million) euros per month. "The ECB will look to the data set with a mixture of joy and concern, as they show that the economy is in the right direction, but will probably alert you to the hawks too early," said Bert Colijn, economist at ING.
however, since the institution no longer hinted that the decision will not come soon. Ewald Nowotny, member of the board of directors of the ECB, had indicated Monday that the authority will not review your program of stimuli before July. Yesterday Francois Villeroy de Galhau, the governor of the central bank of France, added that "concerns about the return of inflation are highly exaggerated".
In turn, core inflation –which excludes food and energy– marked 0.9% in January, with no improvement on the previous month. "With underlying inflation still weak, it seems very unlikely that the data cause a change of direction of the ECB," said Colijn. "Without the underlying inflation, the ECB is not going to move," he confirmed, his time, Michael Schubert, economist at Commerzbank.
in Addition, it is expected that the general inflation –driven in large part by energy prices– will slow in the second half.
As a major risk factor for the current year is compounded by the political uncertainty. "We suspect that the euro zone may find it difficult to sustain their momentum after the political uncertainties in appreciable during 2017 and the purchasing power of consumers, which are probably reduced by the higher inflation,"said Howard Archer, economist at IHS Global Insight.
The majority of economists are betting that the change of monetary policy will not become effective before September and some cite as a possible date to June.
Spain takes steps
Meanwhile, Spain –where prices came to grow 3% rate year-on-year in January – starts to worry and take action about it.
So, as said yesterday the minister of Economy of the country, Luis de Guindos, the government will approve this week the Royal Decree of Desindexación –that unlinks the pricing of public services of the CPI– so that the rebound "worrisome" inflation "does not damage the competitiveness of the economy" and not structural, adding that for the second quarter, the price increase will decelerate to 1%.
Level office candidate French
The French police recorded yesterday the parliamentary office of former presidential candidate Francois Fillon by the case of alleged fake job for his wife, Penelope.
prosecutors are investigating whether the spouse of Fillon received 500,000 euros of public funds in payments for work as a parliamentary advisor of her husband, a charge that would never have played, as reported by the daily satirical French Le Canard Enchaine.
The case has damaged strongly to Fillon, the candidate of the center-right party The Republicans, who until a week ago it was a favorite almost indisputable to be the president of the second european economy. “As things are going, I think we need to put together quickly a plan B,” said a source in the party. Fillon has insisted on denying all the allegations, saying that the work of his wife was real. However, the politician promised to get out of the presidential campaign in the event that you open a formal investigation against them.
No comments:
Post a Comment