A fear of Central bankers and business leaders like the plague: Deflation. Falling or stagnating prices from strangling even the strongest economy. This is not a risk but just.
The prices in Germany so much as for a good ten years. On average, they were in October, 2.5 percent higher than a year ago, as the Federal Statistical office announced on Tuesday. Since the consumer prices in August decreased by 2.0% and in September by 2.3 percent to above, speaks Commerzbank Economist Marco Wagner of a “re-inflation jump”. This catapulted the inflation rate to the highest value since September 2008.
It is once again on the Oil
Significantly more numbers than in October 2017 had to consumers for household energy and fuels (plus 8.9 percent). The increase in the price of Oil as leading energy attracts other energy prices upwards. At the same time, the Euro is weakening tends to be what makes crude oil to European consumers of more expensive. Crude oil is priced in dollars. “Who fills his heating oil tank for the upcoming winter months, empties on the other side, now neatly his wallet,” said Thomas Gitzel, chief economist of the VP Bank group. Also the trip to the gas station was, in the meantime, catch a expensive.
According to the assessment of people’s Inflation, economists also more expensive package travel in the autumn time. The rise in food prices slowed, however, they went under by an average of 1.9 percent. For apartment, a good fifth of the consumption expenditure of private households account for rent, had to consumers to pay 1.6 percent more than in the same month last year.
Now quite sharp downstream not included: Sufficient fuel oil supply, maybe over the WInter?
Interest rates should stay so
For the Euro area as a whole, the European Central Bank (ECB) aims to achieve medium-term an inflation rate just under 2.0 per cent – far enough away from the zero mark. Because permanent low or large-scale decline in prices could encourage businesses and consumers, investment, to defer. That slows down the economy.
Because consumers show prices for some time to the top, aiming for the Central Bank to stop its controversial asset purchases by the end of this year. Savers must be patient still. The interest rates in the Euro area should remain at least until “the summer” in 2019 at a record low of zero percent.
Not good times for Sparer
In spite of the in many EU countries, rising Inflation, a rate hike by the ECB in the term of Central Bank chief Mario Draghi is under traders no longer as a foregone conclusion. The Italian leads the ECB until the end of October 2019.
Since March of 2016, he holds the key set to supply the banks with money at zero percent – much to the chagrin of many Germans: Since the Savings account is nationwide, the most common form of investment and is used by every Second, as data from the asset Manager, J. P. Morgan Asset Management.
If Inflation picks up again, losing savers on the puny interest rates day – or fixed Deposit accounts, only cash. In the Eurozone, the consumer prices in September were 2.1 percent above the previous year’s level. On the other hand, house builders, for instance, benefit from a comparatively favourable credit conditions.
dk/uh(dpa, rtr)