Eurostat has just revised their May inflation numbers. The statistical agency now believes that eurozone inflation is rising at 3.7 percent a year - the fastest rate in 16 years. Hourly eurozone labour costs rose 3.3 per cent in the year to the first quarter – the fastest since early 2003.The ECB are now a long way from their 2 percent target. Rates are about to go up and when they do, say good-bye to the Irish and Spanish property markets.
4 comments:
It's not looking good for Ireland and Spain at all. But the Pigs (Portugal, Italy, Greece and Spain) are also looking bad. Look at their budget deficits. This is very bad. The Telegraph has a good article on he problems.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/16/bcnecb116.xml
"say good-bye to the Irish and Spanish property markets."
I think good-bye has been said. Prices are already collapsing. We could however add "good riddance".
The BoE just came out with an extremely dovish letter to Alistair Darling on inflation. I don't see hikes beyond a cosmetic 25bps one.
http://www.creditwritedowns.com/2008/06/boes-inflation-letter-to-alistair.html
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