Stagflation Anyone?
Remember the 1970s? High oil prices, stubborn inflation and low economic growth? Well could it be about to happen again?
Inflation in the 12 nations using the euro accelerated in September to the fastest pace in more than a year after oil prices surged to a record.Meanwhile of course the economies of the Eurozone are not growing nearly fast enough and the ECB cannot now reduce interest rates, to stimulate them.
The key for the ECB is that this higher inflation doesn’t feed into other prices and expectations.So does anyone still think that a one size fits all currency is a good idea?
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