agri food

And Is It Possible To Decouple The CPI (9.8%)?

Fernando González Urbaneja | The CPI for March (+3%), which raises the year-on-year rate to 9.8%, is an outstanding fact, a major one, enough to stop the machines and turn to Saint Ignatius and his existential questions: where are we and where are we going? The cold data, released by the INE, coincides with the presentation in Congress of the urgent shock measures adapted by the government to deal with…

The ECB bets on buying private debt

Inflation Is Not Just A Monetary Issue

Fernando González Urbaneja | The risk of inflation which last autumn seemed temporary, caused by a temporary rise in energy prices, has become systemic. And the longer-term and worrying consequences threaten stagflation (inflation without growth and with unemployment). Economic textbooks warn that inflation is a monetary phenomenon that can be cured with monetary policy, with restrictions in the form of interest rate rises and a reduction in the money supply….

spain savings rate

Inflation Also Soars To 7.4%.

The Consumer Price Index (CPI) has shot up by 7.4%, the biggest rise since July 1989, according to the National Statistics Institute (INE) on Monday, which will have to be confirmed in two weeks’ time. Inflation is driven, as has been the case for months, by the price of energy, but it is already spreading to the rest of the goods and services in the consumer basket. In fact, core…


Talking Down Inflation

Juan Pedro Marín-Arrese | Christine Lagarde is trying to convince the markets of the ECB’s strong determination to tame the current inflationary bout. To avoid having its reputation as caretaker of price stability tarnished, the ECB has to reverse the benign neglect shown up to now. Yet, Lagarde is conscious of the narrow scope monetary policy has when dealing with supply-side cost hikes. Thus, rather than taking the pivotal action…

inflation rises

January: Inflation With Asterisks

Fernando González Urbaneja | The INE published, as expected, the leading indicator of prices for January with two basic data: the year-on-year rate stands at 6% (half a point lower than the previous month) and the monthly rate for January is negative by half a point (prices fell in January) compared with the rise of 1.2 points the previous month. To these two figures we should add a third: core…

pricing power

Pricing Power Can Help Companies Fight Inflation

Diana Wagner (Capital Groups) | Remember in 2011 when Netflix raised prices by dividing its streaming subscriptions from its DVD service? The announcement sparked an uproar that forced the company to issue an apology and hammered the stock price. Today the world is in a very different place — and so is Netflix: The company is now a dominant streaming service and a megahit-making machine with more than 213 million…

spain red light

Bad News: CPI Soars To 6.7% In December, Almost At 30-Year Highs

Bankinter : Preliminary December CPI +6.7% YoY rises strongly from 5.5% previously and well above the 5.6% expected. The underlying rate stands at 2.1% YoY in December (preliminary) from 1.7% previously. According to the INE, the advanced figure for December would be the highest CPI rate since March 1992. Of note in this behaviour is the rise in the price of electricity, higher this month than in December 2020. Also…

USA reflation

US Inflation Stays Put

Fernando González Urbaneja | The thesis defended by the US Treasury and the Fed that the upturn in inflation this year will be temporary is losing momentum by the week. The latest data for October brings the year-on-year rate to 6.2%, a figure that has not been seen for the last thirty years. What is more worrying is that core inflation, excluding energy and unprocessed foods, is above 5%. It…


Five Charts Which Explain What Is Going On With Inflation

Simon Keane (Schroders) | “Output gap”, “bottlenecks”, “core inflation”, “base effects”, “second-round effects” “labour participation rate”. These are some of the key industry terms essential to understanding what’s going on with inflation.Soaring job vacancies reflect the strong economic recovery of the world’s major economies, as Covid-19 induced restrictions have been gradually eased. Shortages of materials, energy and transport have also been seen, resulting in backlogs of work across a number of sectors.

energy prices impact on inflation

Inflation At 5.5%: Keep calm, very calm…

Fernando González Urbaneja | The advance CPI data for October burst in early in the morning like an explosive device; no one had estimated, not even in the worst scenario, a year-on-year rate of 5.5%, which is unprecedented in the history of the euro, an anti-inflationary currency. The 5.5% in October suggests that the figures for November and December will not be lower as they contrast with increases of two…