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  • Annual inflation up to 4.9% in the euro area

    From ec.europa.eu

    The euro area annual inflation rate was 4.9% in November 2021, up from 4.1% in October. A year earlier, the rate was -0.3%. European Union annual inflation was 5.2% in November 2021, up from 4.4% in October. A year earlier, the rate was 0.2%. These figures are published by Eurostat, the statistical office of the European Union. The lowest annual rates were registered in Malta (2.4%), Portugal (2.6%) and France (3.4%). The highest annual rates were recorded in Lithuania (9.3%), Estonia (8.6%) and Hungary (7.5%). Compared with October, annual inflation remained stable in one Member State and rose in twenty-six. In ... (full story)

This isn't an inflation because of COVID, that's what happens when you print money like crazy all over the world for the last decade or so.
4.9% in sleepy old Europe?!!! Wowzers!!

Factor in the Germans loathing of inflation at every level of leadership...... that is trully the cat being out of the bag.

I think folks......time to ignore anything dovish..... their hands will be very much forced by mid next year, latest. Right now it's full blown poker faces all round.
This is the important table.
Attached Image
IMHO The key factor is Energy. Not money printing (yet ).
Largely supplyside apart from China where y-on-y gas demand expected +10%.
The transience or persistence of the current inflation surge depends on both geopolitical (Russia/OPEC) and Global energy market developments, suffering toxic combination of output flexibility and recovery from CV19 demand slump, (eg US oil rigs currently at 420 - up from 172 last summer but well short of the 700 online in 2019.).

I think this is short term and will very slowly normaise thru 2022.
IMHO biggest worry is longer term.
(IEA’s World Energy Outlook 2021 published this week highlights, the world is not investing enough to meet its future energy needs. Transition-related spending is gradually picking up, but remains far short of what is required to meet the rising demand for energy services in a sustainable way. At the same time, the amount being spent on oil appears to be geared towards a world of stagnant or falling demand. A surge in spending on clean energy transitions provides the way forward, but this needs to happen quickly or global energy markets will face a bumpy road ahead.)
source: IEA
Quoting RossEdwards
This is the important table. {image}IMHO The key factor is Energy. Not money printing (yet ). Largely supplyside apart from China where y-on-y gas demand expected +10%. The transience or persistence of the current inflation surge depends on both geopolitical (Russia/OPEC) and Global energy market developments, suffering toxic combination of output flexibility and recovery from CV19 demand slump, (eg US oil rigs currently at 420 - up from 172 last summer but well short of the 700 online in 2019.). I think this is short term and will very slowly normaise...
All good points. Do you think, though, that the political battle between EU and Russia with regard to a) Russia and OPEC needing/wanting to keep prices high in a global sense and then b) the individual gas pipeline issues with regard to the potentially highly volatile Ukraine/Belarus situation will actually resolve in such a way that a structural energy-deflation might play a part? Personally I'm not so sure. I think that game strategic face-off is at an impasse and, therefore, unlikely to break the constraint on the Demand/Supply issue, particularly until the summer season, of course.
Nothing going to be transient about food inflation to come. Especially in Europe as the cost of fertilizer will be rising continually into spring.
This a direct consequence of Natural Gas and energy policies as Europe goes all in on Green.
Nitrogen Fertilizer is made from Natural Gas.
Higher Fertilizer cost means marginal Farmers will cut back on usage. Resulting in production shortfalls and higher price in Stores.

As Europe and other policymakers continue to Live in Dreamland, when people cannot afford to feed themselves then comes unrest.
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