J.P. Marín-Arrese | The Socialist-run regional governments in Spain face dire prospects in the coming elections next year. High inflation, low growth and rising unemployment weigh heavy on voters’ sentiments against the left-wing coalition governing Spain. So they resort to promising tax cuts as the best recipe to cushion their dwindling support. The Valencia Chairman, Mr Puig, has announced a cut in personal income tax, mirroring the national Opposition leader’s…
J.P. Marín-Arrese | The ruling coalition in Spain faces a dim prospect in the coming elections next year. According to the polls, the main Opposition party, bolstered by its new leadership, is poised to snatch a comfortable victory. It seems even close to securing an overall majority, counting on a helping hand from the extreme right and some minor partners. To ward off the danger of a crushing defeat, the…
J.P. Marín-Arrese | While markets mildly reacted to the widely discounted rate hike and the prospect of protracted high-interest levels, the stern message delivered by Jerome Powell unsettled them. Stocks tumbled as he emphasised the Fed’s commitment to tighten its policy as long as inflation remains unabated, flying high above its 2% medium-term target. In short, he sounded ready to do ‘whatever it takes’ to curb the current price spiral….
J.P. Marín-Arrese | The UK has delivered a humbling lesson to the Spanish government as its forceful attempts to downgrade the former King Juan Carlos’s attendance at late Queen Elisabeth’s funeral have backfired. The Foreign Minister stepped in, eagerly underlining that State representation confined itself to the sovereign and himself, even consigning Queen Letizia to oblivion in his hasty statement. His frantic efforts to portray Don Juan Carlos as an…
J.P. Marín-Arrese | Pressed by a skyrocketing headline and core inflation, the ECB took the boldest step in its history when it raised rates by 75 basis points. Further hikes will follow in a desperate attempt to curb the current price spiral. Will they achieve this goal? For all the bombastic claims made by Christine Lagarde, there is good reason to doubt the ECB might solve such an entrenched problem….
J.P. Marín-Arrese |Christine Lagarde announced the first rate hike in a decade as an upfront offensive against inflationary pressures. While no one doubts this tightening aims at cutting short the current price race, the claim that it is an early reaction fails to match the records. For more than a year, all advanced economies have witnessed soaring prices. Yet, the ECB dismissed this trend as a temporary mismatch betwen demand…
Juan Pedro Marín-Arrese | Blaming Putin for the current inflationary bout no longer holds. No one disputes that sanctions aimed at crippling the Russian economy following the aggression on Ukraine have made the prices of vital commodities skyrocket, mainly due to wild speculative movements. Nowadays, we are witnessing sharp falls in raw materials while prices gather further momentum. Thus, claiming we only face a cost shock from such products seems…
J.P. Marín-Arrese | Now that the monetary tables are turning, it is not at all prudent to indulge in overspending. Inflation undoubtedly has a dampening effect by automatically raising fiscal drag while lowering liabilities in real terms. But if the slowdown deepens, the most vulnerable countries could once again come under suspicion. This is a real risk, no matter how much we try to ignore it. In such turbulent times,…
J.P. Marín-Arrese | The new Opposition leader has decided to confront the government on economic policies, which signals a departure from his predecessor’s bitter bickering and acrimony toward Mr Sánchez. Mr Casado practised a scorched earth policy treating the Premier as a mendacious liar, felon and traitor. Such terms of abuse stirred the hearts of hardline supporters but did little to convince mainstream voters of his suitability to govern the…
J.P. Marín-Arrese|Skyrocketing prices confront central bankers with a challenging dilemma. Their sacred duty to preserve stability forces them to take vigorous action to curb inflation. Yet, they are conscious that tightening the monetary stance will fail to put on hold the current supply shock. Worse still, only by pulling hard on the hand brake coulld they stop short prices from escalating. A move that would come at a heavy cost…