European stocks continue to be nervous and signals on Thursday after the data announced today in Europe and showed a new price rally against the assurances of the President of the European Central Bank that the upward pressures will be mitigated over time.
Christine Lagarde reiterated today that inflation, according to the bank’s forecasts, will gradually decline over the year as energy prices and supply chain disruptions are expected to decline.
Speaking to France Inter radio, the ECB president noted that the central bank does not need to act as boldly as the US Federal Reserve, due to the different economic situation. “The cycle of economic recovery in the United States is ahead of that in Europe. So we have every reason not to act as quickly and violently as one might imagine the Fed would do,” he said.
“But we have started to react and we are obviously ready to react with monetary policy measures if the facts, the data, the facts, demand it,” he stressed.
However, data released today by Eurostat confirmed that annual inflation jumped to a new high of 5% in December 2021 from 4.9% in November and -0.3% a year earlier.
At the same time, in Germany the data of the Federal Statistical Office showed a new record increase in producer prices, bringing back to the forefront inflation concerns.
In particular, producer prices in Germany recorded an annual jump of 24.2% in December, continuing the rally of previous months. This is the largest annual increase since records began in 1949, the statistics office said. At the same time, it exceeded the average estimates of analysts who spoke of an annual increase of 19.4%.
The December jump follows a rally in prices over the past two months, with the statistical service announcing an increase of 18.4% for October and 19.2% for November.
On the board, the pan-European Stoxx 600 recorded small gains of 0.1% at 481.56 points.
The German DAX rose 0.15% to 15,832.42 points, the French CAC-40 lost 0.1% to 7,163.57 points, while the British FTSE 100 also fell 0.1% to 7,583.80 points.
In the region, the Italian FTSE MIB increased by 0.5%, while the Spanish IBEX 35 increased by 0.3%.
The climate is not helped by tensions in Western-Russian relations over Ukraine, with US President Joe Biden warning yesterday that he expects Russia to “move” inside Ukraine and warning that a “large-scale” invasion would provoke the fierce response against Moscow.
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