FT News Briefing Falling inflation in Europe
Jan 5, 2023
Inflation trends are diverging, with Europe experiencing a decline while the Federal Reserve remains cautious. The IMF signals that the U.S. still has hurdles ahead. Falling energy prices in Europe provide some relief, yet rising interest rates pose challenges. Trust in government is waning due to COVID misinformation, complicating recovery. Meanwhile, China's COVID death statistics come under scrutiny, raising concerns about accuracy and transparency. As cities navigate these obstacles, public sentiment remains fragile.
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Fed Should Stay the Course on Rate Hikes
- The Fed should not ease up on interest rate hikes yet, says IMF official Gita Gopinath.
- Threats like services inflation, driven by a strong labor market, persist.
Energy Prices Drive European Inflation Drop
- Falling energy prices, due to mild weather and government aid, are driving down European inflation.
- The European Central Bank (ECB) remains concerned about underlying price pressures.
China Underreporting COVID Deaths
- The WHO accuses China of underreporting COVID deaths; the official count doesn't reflect reality.
- Numerous obituaries of prominent figures highlight this discrepancy, eroding public trust.