European Inflation Growth Hides Underlying Weaknesses
Europe’s inflation rate grew faster in October than at any other time in the last two years, and while stronger inflation is usually considered a good sign in today’s economic climate the figures hide bad news for the European Central Bank.
ECB chief economist Peter Praet warns that the data lacks convincing signs of underlying price pressures, Bloomberg reports. The figures show that despite inflation rising overall, the core rate actually fell to its lowest point in six months once you exclude volatile items from the calculation.
If it wants to push the core inflation rate up and maintain this improved inflation rate, analysts say ECB needs to extend quantative easing beyond its current end date. [Bloomberg]