Eurozone

Inflation continues to rise in the Eurozone, with the flash estimate for March hitting 3.5% -- the highest since June 1992. And with growth close to trend, it is likely that in normal circumstances the ECB would be preparing for a further hike in rates. The yield curves in the Eurozone have also ste...

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Bibliographic Details
Published inWorld Economic Prospects Monthly Review p. 9
Format Report
LanguageEnglish
Published Oxford Oxford Economics Ltd 01.04.2008
Subjects
Borrowing
Corporate bonds
Economic forecasts
Economic statistics
Employment
Eurozone
Foreign exchange rates
GDP
Government bonds
Gross Domestic Product
Industrial production
Interest rates
Job creation
Labor market
Europe
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Summary:Inflation continues to rise in the Eurozone, with the flash estimate for March hitting 3.5% -- the highest since June 1992. And with growth close to trend, it is likely that in normal circumstances the ECB would be preparing for a further hike in rates. The yield curves in the Eurozone have also steepened in recent months, but to a far smaller extent than in the US due to the lack of action by the ECB on its policy rate. The Eurozone 10yr-2yr spread widened by around 14bps in the first quarter. Labor market developments are going to be central to determining how deep and protracted the current global growth slowdown proves to be. Labor market conditions remain more buoyant, with unemployment continuing to fall and job creation proceeding at a healthy rate. The employment picture suggests Eurozone firms remain relatively confident about the economic outlook.