Connect with us

Hi, what are you looking for?

World News

Inflation at highest level for 34 years across OECD

Cost of living crisis: consumer prices rose by 10.7% on average in October compared to the previous year

Inflation at the highest level for 34 years in the whole of the OECD: prices rise by 10.7% on average in October compared to the previous year

Inflation across the OECD has hit a 34-year high in the latest sign that central banks still have a tough fight to bring soaring prices under control.

Consumer prices rose an average of 10.7% in October from a year earlier, according to the latest data from the Paris club of 38 industrialized economies.

That was up from 10.5% in September and the highest rate since April 1988. Inflation rates range over 80% in Turkey – an outlier that the president bizarrely believes may be curbed by reducing rates – up to 3% in Switzerland. .

Cost of living crisis: consumer prices rose by 10.7% on average in October compared to the previous year

Cost of living crisis: consumer prices rose by 10.7% on average in October compared to the previous year

The figures come a week ahead of key interest rate decisions in the UK, Europe and the US.

They underscore the challenge facing central banks that are determined to rein in inflation, but will also be aware that borrowing costs are weighing on businesses and consumers.

Inflation is in double digits in 18 of the 38 countries – and above 20% in Estonia, Hungary, Latvia and Lithuania as well as Turkey.

The rise in prices across the OECD was driven by soaring energy costs due to the war in Ukraine, although the 28.1% rise in October was down from 28 .8% in September.

The rise in food prices – another important factor – accelerated, however, from 15.3% to 16.1%.

Excluding these two measures, a base measure of inflation of 7.6% remained unchanged.

Central banks fear that even if the energy price shock fades, inflation could take hold as workers demand wage increases which then trickle down in the form of higher prices, creating a vicious spiral.

That is why they are considering further interest rate hikes, even if it will add to the pressure on borrowers as the world heads into an economic slowdown.

Next week, the Bank of England is expected to announce a further increase of 0.5 percentage points.

The Bank has already raised rates from 0.1% a year ago to 3% as it battles inflation, which is at 11.1%, its highest level in 41 years.

But opinion seems divided among its rate setters on the next step.

Swati Dhingra, a ‘dove’ on the Bank’s monetary policy committee who voted for lower hikes than her colleagues, recently told a newspaper that there could be a longer and deeper recession if rates go up. “much more”.

But Dave Ramsden, a ‘hawk’ who has at times backed higher increases than other MPC members, recently insisted that rates must keep rising even if the hikes add painful pressure on millions of households. and businesses.

He said the Bank “must take the necessary steps” to bring inflation back to its 2% target.

Next week the Office for National Statistics (ONS) will release inflation figures for November in hopes that some of the price pressures on the economy will begin to ease.

Eurozone inflation has fallen slightly but remains in double digits at 10% – and the European Central Bank will be under pressure to take further rate action next Thursday.

But the key global development will be the US Federal Reserve’s rate announcement on Wednesday, which will follow US inflation data also due next week.

Markets have been buoyed recently by hopes that the Fed is ready to begin its so-called “pivot” away from its aggressive series of rate hikes.

Fed Chairman Jerome Powell recently applauded investors when he said the time to “moderate the pace” of increases could come as early as this month.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Business

When you apply for a personal loan, lenders first determine your credit score to know how credible and reliable you are. This means that...

Health

It’s fun to be a student, especially if you’re motivated to achieve. However, it’s getting harder for students to focus in today’s busy society....

Finance

Loans against property are a common option for people needing high-value cash. Given that its interest rates are almost 3% to 4% more than...

Business

Zion Market Research has released a new report that projects the Endotracheal Tube Securement Devices Market: Global Industry Perspective, Comprehensive Analysis and Forecast, 2018-2025. The year...