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FT’s editor Roula Khalaf chose her favorite story in the weekly news and communication.
The euro area inflation was unexpectedly increased in January, with the target of 2 % of the 3 % mid -term target of the Central Bank of Europe for the third consecutive month, but it is expected that the plan to change decision makers will continue to reduce interest rates.
The Group’s statistical office reported on Monday that the price of consumers in January was 2.5 % higher than the year ago, which was higher than the analyst’s expectations of 2.4 %, which was 2.4 % higher than December.
However, the month with a higher inflation rate (the price of 1.7 % in September) is largely driven by the energy price of the damaged title of inflation. Because the inflation rate in the past few months is still more than the European Central Bank’s forecast, the acceleration in September will not affect the direction of monetary policy.
The number of inflation is an administrative order for US President Donald Trump that it has announced a 25 % tariff on Canada and Mexican goods since Tuesday, although Canadian energy products will be levied by 10 %. He also levied 10 % tariffs on Chinese goods.
Trump said that 10 % of the tax levied by EU commodities will definitely happen. Economists warn that the US tariffs on the imports of euro zones and a wider economic uncertainty may cause a currency growth of up to 0.5 percentage points in one year.
Bank of Economist Bert Colijn warned that the EU’s retaliatory tariffs will promote the increase in inflation because tariffs usually cause consumer prices to rise.
He added: “As the risk of inflation is still common, the uncertainty increases. The problem is that the European Central Bank can promote the rate of economy to make the economy more breathing space.”
In January, the inflation rate of the service industry was still significantly higher than the European Central Bank’s goals, accounting for 3.9 %, but the central bank was convinced that this year will decline this year due to relief of wage pressure. Starting from the expectations of 2.6 % interest rates in December and above, the core inflation rate has reduced volatile food and energy prices, but has not changed.
“Inflation data in January will not change the idea of the European Central Bank decision makers’ recent ways to interest rates,” said Jack Allen-Reynolds, an economist in charge of capital economics and economist. “The fact that the service inflation rate remains high will mean that they want to relax the policy with a small step.”
Last week, the fifth time since the Central Bank of China reduced the interest rate of 2.75 %, which reflected that the inflation rate would drop to its 2 % target in the year. After the surge in energy costs, the annual price rose to 10.6 % at the end of 2022.
The European Central Bank President Christine Lagarde emphasized last week: “The dissolution process is valid.”
“We know the direction of travel.” Ragard’s decision on Thursday emphasized, indicating that this is downward, and added that the speed and range of the future interest rate will be decided to meet through the meeting.
The official data released last week showed that the euro zone economy did not grow in the last three months of 2024, which marked the sharp decline in the growth of 0.4 % of the growth of the previous three months.
Compared with the previous quarter, in the last three months of 2024, Germany’s GDP revenue was 0.2 %, while French economic accidents were reduced by 0.1 %. The output of Italy is flat.
