There are many events taking place in the world today. Not least of these is the Russian war on Ukraine which has affected all industries. The Central Bank predicted a downward spiral of the economy and the eurozone facing major inflation. As a result, employment rates and costs of living prove to be a dilemma. In this blog, we share some blog posts that will shed light on this topic.
Euro zone inflation surge intensifies ECB policy dilemma
This post expands on how inflation continues to surge across Europe’s biggest economies this month. This has left households poorer as they pick up the bill for soaring energy costs in the wake of Russia’s shock invasion of Ukraine. In March, price growth hit two decade highs in Italy, France, Germany and Spain.
This has intensified a policy dilemma for the European Central Bank, which needs to fight the price surge but must also avoid choking off already waning growth. The data, along with sky-high readings from Germany and Spain a day earlier, suggest that Friday’s euro zone inflation reading will be well above 7%, exceeding expectations and coming in far above the ECB’s 2% target.
Central Bank revises downwards economic forecast
The Central Bank has revised its forecasts for economic growth facing a downward spiral. This post highlights that the revision is due to higher inflation and the impact of the war in Ukraine on the global economy.
In its quarterly bulletin, the Bank states inflation surge this year could peak at 8% and will average out at 6.5% for the year as a whole.
In just three months since its last bulletin, the Central Bank has knocked two percentage points off its growth forecast for the economy this year and added two percentage points to its inflation forecast.
Most of the reasons are connected to the current war in Ukraine.
How you can beat inflation and save money
Prices have been rising at their fastest pace in decades, but it’s not that anyone needs reminding. According to the latest figures from the CSO, inflation hit a 22 year high of 6.7% in March. The ESRI and the Central Bank both expect the annual rate of price increases to peak at 8% in the summer and will average at around 6% for the full year.
During most of the last decade, aside from rent increases and the occasional increase in public transport costs, inflation has been pretty much non-existent. This spike is either a totally new experience, or probably a fairly distant memory for those who are old enough to remember about past inflation.
Just think of it in the words of Warren Buffett who likened inflation to ‘running up a down escalator.’ Follow the link for a few ways to make the escalator travel a little slower.
In these difficult times people across the world will be affected in many different ways. Stay updated on all you need to know regarding the economy with Mark Kennedy and co.