Source: China Business News Network
According to data released by the Office for National Statistics on May 18, the UK consumer price index (CPI) reached 9% in April, a sharp increase from 7% in March and the fastest growth rate since 1982.
In the euro zone across the English Channel, high inflation also puts "pressure" on the ECB. According to data released by Eurostat, the euro zone's adjusted CPI rose by 7.5% year-on-year in April, the highest level since statistical records began in 1997.
Due to the extreme quantitative easing monetary policy implemented by Europe and the United States in the past two years, as well as the conflict between Russia and Ukraine this year, European energy prices and international wheat prices have reached record highs, and the global supply chain is not smooth. Very dissatisfied with the high prices.
A poll by McKinsey & Company shows that soaring prices in almost all areas of life have surpassed the Russian-Ukrainian conflict and the new crown pneumonia epidemic as the most worrying issue for Germans. The soaring cost of living has forced both high- and low-income earners to cut back on consumer spending. Moreover, EU economists and analysts believe that prices will continue to rise this year and next.
In the face of record inflation and public dissatisfaction, ECB Governing Council member and Dutch central bank President Nott said on May 17 that he supports raising interest rates by 25 basis points in July. If the inflation data continues to deteriorate, the European Central Bank may There are more aggressive moves, not ruling out a 50 basis point hike. Inflation in the euro zone is at risk of further acceleration, especially after the EU and Russia have reached an impasse over energy supplies. Also on May 17, Fed Chairman Powell also reiterated that he must fight inflation at all costs.
The European and American central banks have such a consistent position in fighting inflation that the market expects that the probability of the European Central Bank raising interest rates in July has greatly increased, and it will respond immediately. On May 18, European bonds fell and yields soared. Among them, the German 2-year bond yield hit 0.423%, the highest point since December 2011, before falling back to 0.394%. On May 17, the German 10-year bond yield rose 10 basis points to 1.04%, and the Italian 10-year bond yield rose 12bp to 2.96%.
The rise in the yields of short-term and long-term government bonds means that the price of funds in the market has risen across the board, and the cost of using funds has increased, which has an immediate inhibitory effect on the prices of risky assets. In addition, investors are worried about the economic outlook. On May 18, the three major European stock markets The whole line fell. The London stock market in the United Kingdom fell by 1.07%, the Paris stock market in France fell by 1.20%, and the Frankfurt stock market in Germany fell by 1.26%. Among them, the consumer stocks are "first to fall for the respect".
Although the European economy has recently benefited to a considerable extent from the gradual relaxation of epidemic control measures, investors' sentiment towards capital markets has changed, and consumers' willingness to spend generally tends to be conservative.
According to data released by the European Automobile Manufacturers Association (ACEA) on May 18, the number of new car registrations in Europe in April was about 830,400, down 20% year-on-year, the biggest dro this year. Meanwhile, the European auto industry remains mired in a supply chain crisis and record inflation threatens to keep consumers away, leading to a 10th straight monthly decline in European car sales. Auto consumption is often the leading indicator of a region's economic development. When auto sales drop significantly, the risk of economic downturn increases significantly.
The European Commission's Spring 2022 Economic Outlook report released on May 16 stated that the real GDP growth rate of the EU and the euro area will be 2.7% and 2.3% in 2022 and 2023, respectively, lower than the 4.0% in the February Outlook report. and 2.8%. At the same time, the European Commission also significantly raised its full-year inflation forecast for 2022, which is expected to rise from 2.9% in 2021 to 6.8% in 2022.
The European economy under high inflation is even more bumpy
Date:2022-05-23 Hits:41
