Positive picture in Euromarkets against inflation data

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European stock markets continued to rise on Thursday in the shadow of data that also showed a new record of inflation in the Eurozone shortly after the statements of a high-ranking official of the European Central Bank that the price rally may continue.

The ECB’s concerns about the path of inflation have not subsided, he stated today the member of the ECB’s Executive Committee, Isabel Schnabel, even noting the risk that “in the short term, inflation will increase further”.

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“In July, we decided to raise interest rates by 50 basis points as we were concerned about the path of inflation,” the official told Reuters in an interview. “The concerns we had in July have not eased… I don’t think the outlook [του πληθωρισμού] has fundamentally changed,” he added.

The data announced today by Eurostat confirmed its fears, showing a new record of inflation in July. In particular, annual inflation climbed to a new record high of 8.9% from 8.6% in June and 2.2% a year earlier, the European statistics agency announced.

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On the board, the pan-European Stoxx 600 index moves with small gains of 0.3% to 440.39 points.

Germany’s DAX gained 0.8% to 13,741.54 after plunging 2% yesterday, France’s CAC 40 gained 0.5% to 6,561.13, while Britain’s FTSE 100 fell marginally 0.04% to 7,513.06 units.

Elsewhere, Italy’s FTSE MIB rose 0.7%, while Spain’s IBEX 35 edged up 0.1%.

The battle against inflation is escalating globally, with major central banks raising interest rates back-to-back as they try to rein in prices. Norway’s central bank raised interest rates by 50 basis points today and said it expects to hike again next month as inflation continues to run above estimates.

In particular, Norges Bank’s monetary policy committee raised its key interest rate to 1.75% from 1.25% previously, beating the forecast it made last month for an increase to 1.50%.

In the US, moreover, the minutes of the last meeting of the Federal Reserve released yesterday showed that central bank officials have seen “little evidence” that inflation is slowing, in a sign that the Fed is not expected to change its policy of large rate hikes to counter the price rally.

Source: Capital

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