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2 Oct 2013
Flash: disinflationary forces are tightening their grip. - BBH
FXstreet.com (London) - Research teams at BBH suggest that the ECB needs to consider tomorrow that the fact that disinflationary forces are tightening their grip.
Key Quotes:
“The preliminary September rate of 1.1% is nearly a four year low. The core rate stands at 1%. The ECB targets headline inflation at close to, but below 2%. The appreciation of the euro also warns of downside risk to imported prices, especially energy”.
“Like the Federal Reserve, it needs to consider ensuring investors that it approaches its inflation target symmetrically. This is to say, that is will be just as concerned about inflation undershooting, as much as overshooting. Some of the drop in inflation is due to the arguably exaggerated effects of the increase in administered prices, like VAT increases, that pushed up measured inflation and are now falling out of the calculations. This is a key factor that has seen the Spanish CPI fell to four year lows”.
“The decline in price pressures is taking place amid continued slow growth in money supply growth, one of the pillars of ECB monetary policy. In addition, private sector lending continues to contract”.
Key Quotes:
“The preliminary September rate of 1.1% is nearly a four year low. The core rate stands at 1%. The ECB targets headline inflation at close to, but below 2%. The appreciation of the euro also warns of downside risk to imported prices, especially energy”.
“Like the Federal Reserve, it needs to consider ensuring investors that it approaches its inflation target symmetrically. This is to say, that is will be just as concerned about inflation undershooting, as much as overshooting. Some of the drop in inflation is due to the arguably exaggerated effects of the increase in administered prices, like VAT increases, that pushed up measured inflation and are now falling out of the calculations. This is a key factor that has seen the Spanish CPI fell to four year lows”.
“The decline in price pressures is taking place amid continued slow growth in money supply growth, one of the pillars of ECB monetary policy. In addition, private sector lending continues to contract”.