Highest German Inflation In 70 Years To Prompt Higher Than Expected Hike In Euro Borrowing CostsGermany, the heart of the European economy, just registered
consumer price inflation at 7.9%, the highest level since 1952.
The inflationary jump of 0.5% from the previously reading, was primarily down to surging energy and food cost increase. But that will likely lead the way to
far higher borrowing costs for euro borrowers also.
The worst part of the inflation news is that things likely won’t right themselves anytime soon.
Given Germany’s history of
hyperinflation a century ago, it would seem likely that the European Central Bank — Europe’s equivalent of the Federal Reserve —
will want to act decisively to crush inflation and bring it back within the annual 2% target zone.
And Germany isn’t the only major European economy suffering from surging inflation.
Spain’s inflation rate stands at 8.5%.
