Wednesday, April 16, 2008

Euroland infaltion soars - ECB rate cut forecast pushed back

European inflation rose more than expected to 3.6% in March, nearly a 16 year high. Food-price inflation accelerated to 6.2 percent in March from 5.8 percent in February, the highest since Eurostat began the current series in 1997. Energy-price inflation accelerated to 11.2 percent from 10.4 percent, the highest since May 2006.

Price increases are "not out of control, but this inflation rate is intolerable and the ECB will fight it,'' former ECB chief economist Otmar Issing said in a Bloomberg Television interview in Frankfurt. "The ECB has a clear mandate: maintaining price stability.''

Westpac senior economist James Shugg pushes back ECB rate cut forecast. He talks about Euroland inflation, the ECB, EM and China, and US housing.

"European growth story is probably holding out better than the UK and US. The EU does not have a housing driven consumer boom."

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source: Shugg Says Westpac May `Push Back' ECB Rate Cut Forecast
Bloomberg, James Shugg Westpac senior economist

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