Eurozone Inflation

ILW

Just heard on the radio that Eurozone inflation is currently running at 0.7%.

We are forever being told that our inflation at around 4 times that is mainly imported and BoE have no control over it.

Do the Eurozone import nothing or are we being fed a load of cobblers?

lvader

So the BoE is closer to the infation target than the ECB, who is less in control of inflation?

ILW

lvader wrote: »

So the BoE is closer to the infation target than the ECB, who is less in control of inflation?

Any fool can increase inflation virtually overnight just by increasing indirect taxes or printing money. Controlling it seems to be beyond our BoE.

ManAtHome

ILW wrote: »

Do the Eurozone import nothing or are we being fed a load of cobblers?

Check out quid v dollar (or euro) against euro v dollar over the last few years.

Of course a weak quid "rebalances the economy" which is why the UK trade defecit has almost vanished (sorry, should have saved that one for April 1st).

Generali

ILW wrote: »

Just heard on the radio that Eurozone inflation is currently running at 0.7%.

We are forever being told that our inflation at around 4 times that is mainly imported and BoE have no control over it.

Do the Eurozone import nothing or are we being fed a load of cobblers?

Because places like Spain and Greece are experiencing deflation and pushing the average down.

We're back to the Devonian School of Economics: if inflation is 2.6% or more then interest rates should rise to whatever is required to force prices back to rising by less regardless of the reason for price rises.

ILW

Generali wrote: »

Because places like Spain and Greece are experiencing deflation and pushing the average down.

We're back to the Devonian School of Economics: if inflation is 2.6% or more then interest rates should rise to whatever is required to force prices back to rising by less regardless of the reason for price rises.

I would have thought the Greek economy is now too small to have much effect on the average. Are some eurozone countries having rates of 3 or 4%?

michaels

Mmm - 12.2% unemployment, I wish we were more like those Eurozone heros.....

CLAPTON

in the UK inflation is largely 'imported' i.e. fuel, foods etc

in Euroland they too have imported inflation but they 'benefit ' from falling labour costs (wages) whilst we suffer from static or slightly increasing wages


each can have a view which is 'best'

Graham_Devon

Generali wrote: »

We're back to the Devonian School of Economics:

Joining in then?

Thought this sort of stuff would be below yourself, but clearly not.

leveller2911

Graham_Devon wrote: »

Joining in then?


Thought this sort of stuff would be below yourself, but clearly
not.

Not sure why you even bother in here any more, the little clique of posters who constantly take the p1ss out of anyone who disagrees with them cream themselves everytime you post.

Its a shame really as this section of the forum use to be excellant. BTW do we actually have moderators anymore?. Seems not..

I'm surprised at Generali too, thought he was above all that cr @p but it seems not. Guess there are more fakers/trolls on here than I thought.

princeofpounds

We are forever being told that our inflation at around 4 times that is mainly imported and BoE have no control over it.

When inflation is imported, what that actually means is that our currency is weak. This causes the price of imported goods or tradeable goods with an international price to rise in pound terms.

Policymakers who are determined to run loose monetary policy will often say that the prices of such goods are not affected by domestic monetary policy impact on demand, and the devaluation is a one-off event, so it is pointless to try to address such problems with monetary policy.

This is a bit of a fiction however. Firstly because if you run continually loose policy then devaluation is a continual, repeated process. Secondly because although higher interest rates may not lead to price changes from lower demand, tighter policy tends to support the currency which means less inflation is imported.