Europe Inflation Up

Europe Inflation Up

by Ashley Clark, Director

Inflation in Europe (euro countries) has increased in a month by 0.3% to 1.7% for July.  In addition inflation across the whole of Europe, including none-euro countries such as the UK, inflation rose in July by 0.2% to 2.1% overall.  The UK inflation rate is much higher with CPI at 3.5% and RPI at 5%.

Again, this is a global impact of government spending cut backs, increases in taxes with many Euro nations increasing VAT rates and the ongoing increases in fuel prices.

Wheat prices are also on the increase with a shortage now from Russia, Europe’s major supplier, which has a direct impact not just on bread prices but also on animal feed products and therefore meat and dairy produce.  

We suggest by government and central bank design, inflation will continue to rise in a stealth effort for many countries to devalue their public sector debt over a sustained period without having to actually repay it.

Expect a period of sustained higher inflation and interest rates to remain comparatively low for a couple of years before huge interest rate increases in a few years to reduce overheating of European economies.

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