German inflation expectations jump to 8-1/2 year highs

Tajammul Pangarkar
Tajammul Pangarkar

Updated · Oct 22, 2021

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October 22, 2021

By Saikat Chatterjee

LONDON (Reuters) – Inflation expectations in Germany climbed to 8-1/2 year highs on Friday as concerns grew that the European Central Bank will keep monetary policy on a dovish setting next week in the face of rising inflation data.

German 10-year breakeven inflation rate which represents the difference in yield between a nominal bond and its inflation-indexed counterpart rose to around to 1.81%, highest since April 2013, according to Refinitv data.

The surge in inflation expectations follows weeks of increases in energy prices with natural gas and coal prices hitting record highs amid supply constraints and rebounding demand for electricity.

Global supply chain problems as the world economy reopens from COVID-19 lockdowns and labour shortages have also fuelled price pressures.

But unlike some other major central banks like the U.S. Federal Reserve, policymakers in Europe are unlikely to abandon its pandemic-era stimulus settings yet.

A similiar gauge in the United States held at its highest level since August 2006 at 2.64%.

(Reporting by Saikat Chatterjee, editing by Stefano Rebaudo and Abhinav Ramnarayan)

Source Link German inflation expectations jump to 8-1/2 year highs

Tajammul Pangarkar

Tajammul Pangarkar

Tajammul Pangarkar is a CMO at Prudour Pvt Ltd. Tajammul longstanding experience in the fields of mobile technology and industry research is often reflected in his insightful body of work. His interest lies in understanding tech trends, dissecting mobile applications, and raising general awareness of technical know-how. He frequently contributes to numerous industry-specific magazines and forums. When he’s not ruminating about various happenings in the tech world, he can usually be found indulging in his next favorite interest - table tennis.