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1 Nov 2013
Flash: Surprised on low inflation in Europe? – Societe Generale
FXstreet.com (London) - Kit Jukes, Global Head of Currency Strategy at Societe Generale explained the surprise really ought to be that so many people are so surprised by low inflation in Europe.
Key Quotes:
‘With no credit growth, a strong currency, falling wages in great swathes of the Euro Area and a quarter of the under-25s out of work, what exactly provides upward pressure on prices?”
“I wrote plenty over the summer about the 40% fall in the price of a cup of coffee in Moraira”.
“The answer is usually indirect tax increases. Still, yesterday's shock has prompted a flurry of rate cut forecasts from ourselves as well as everyone else. If the ECB wants to avoid the further Japanification of the Euro Area, they need to do everything they can to ease monetary policy”.
Key Quotes:
‘With no credit growth, a strong currency, falling wages in great swathes of the Euro Area and a quarter of the under-25s out of work, what exactly provides upward pressure on prices?”
“I wrote plenty over the summer about the 40% fall in the price of a cup of coffee in Moraira”.
“The answer is usually indirect tax increases. Still, yesterday's shock has prompted a flurry of rate cut forecasts from ourselves as well as everyone else. If the ECB wants to avoid the further Japanification of the Euro Area, they need to do everything they can to ease monetary policy”.