FT News Briefing The ECB goes from dove to hawk
Sep 8, 2022
Chinese companies are significantly raising funds in Europe, outpacing the U.S. for the first time. European farmers brace for inflated food prices and potential shortages this winter due to rising energy costs. Meanwhile, the European Central Bank is making a hawkish pivot amidst soaring inflation, currently at 9.1%. Discussions of windfall taxes on energy producers are heating up, and in a surprising twist, Kim Kardashian steps into private equity, exploring Trump's political influence on Instagram Live.
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ECB's Hawkish Shift
- The ECB is becoming more hawkish due to record high inflation in the Eurozone.
- Their increasingly aggressive stance is driven by the economy's surprising resilience.
Stagflationary Risks
- Despite potential economic downturn from energy crisis, inflation might not decrease.
- This stagflation scenario creates a difficult situation for the ECB, whose primary mandate is controlling inflation.
Food Shortage Warning
- Food producers warn of potential winter shortages in Europe due to rising energy costs.
- Reduced outputs and shorter seasons are expected, potentially leading to higher grocery prices.