EUR/USD: When even the Bundesbank warns that Germany might already be in recession, you know that things in the Eurozone look grim. Chart/Levels from Analyst, Nicole Elliott – Investors Chronicle.


EU must face up to the flip-side of zero rates

Which is: precious little inflation

July data on inflation published by Eurostat yesterday saw inflation in all too many Eurozone nations come in lower than expected and lower than June’s. For the block as a whole, HICP dropped 0.5 per cent in July dragging the annualised rate down to 1.0 per cent from 1.3 per cent the previous month. Core inflation fell by 0.6 per cent to print just 0.9 per cent in the year. In Germany, it dropped from 1.5 per cent to 1.1 per cent per annum. In Italy inflation is now running at a paltry 0.3 per cent in the year to July while Portugal has the dubious honour of the lowest reading: an annualised rate of minus 0.7 per cent. We reiterate: this means that money tomorrow buys more than it does today, in which case why should savers be recompensed with interest income?

In Europe the slow crawl of corporates embracing corporate and social responsibility has been a feature – albeit a small one – for a few years. Yesterday in the US 181 chief executives, members of a group called the Business Roundtable, signed a letter demanding that firms take into account ‘’all stakeholders’’ – including employees, customers and the wider society, rather than just shareholders – when setting corporate goals. Chairman of the group, JP Morgan’s Jamie Dimon noted, it ‘’will help to set a new standard for corporate leadership’’.

Financial Markets and Political Commentary


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