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Inflation drops sharply in Europe in September

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Inflation drops sharply in Europe in September

The annual inflation was still double the European Central Bank’s target, however.

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The Eurozone’s annual inflation rate slowed down to 4.3% year-on-year in September, Eurostat announced on Friday.

This figure is the lowest level since October 2021 and should bring slight relief to the millions of households still grappling with high prices. 

The annual rate shows a spectacular drop from 5.2% in August. 

Core inflation, which excludes volatile fuel and food prices, fell more than analysts expected — to 4.5% from 5.3%.

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Energy prices dropped 4.7% in September, while food price inflation remained uncomfortably high at 8.8%.

The ECB recently revised its inflation forecasts upward for both 2023 to 5.6% and 2024 to 3.2%, primarily driven by an increased trajectory in energy prices. 

For 2025, the central bank anticipates inflation to average 2.1%.

Slowing inflation is strengthening hopes that the European Central Bank won’t have to further restrict the economy by raising interest rates from already-record highs.

The fall in core inflation “reinforces our view that the ECB has finished raising interest rates,” said Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics. 

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The Eurozone’s biggest economies show mixed signs

Readings across the major economies that use the euro currency were a mixed bag. Germany’s annual inflation fell to 4.3% in September from 6.4% a month earlier, while Spain’s increased to 3.2% from 2.4%. 

Another data set published on Friday brought some promising news for France with inflation unexpectedly slowed in September, preliminary data shows. Consumer prices increased by 4.9% year on year (EU-harmonised official data shows 5.6%). 

At a closer look, the numbers are still scary; food prices rose to 9.6% in September following an 11.2% jump in August while energy prices jumped 11.5% after rising 6.8% in August as well. 

‘The slowdown over one year in the prices of food, services and manufactured products” has been counterbalanced by the acceleration in energy prices’, said the National Institute of Statistics and Economic Studies. 

In a monthly comparison, prices decreased, by 0.6% from August. 

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The impact on the economy

High prices have been holding back the European economy because people’s paychecks don’t go as far as they used to in covering their bills, forcing them to cut back on other spending.

Economic growth has stagnated to just above zero in the first six months of the year, with some indicators pointing to a downturn in the current July-to-September quarter.

This burst of inflation was set off as the global economy rebounded from the COVID-19 pandemic, leading to shortages of parts and raw materials. It got worse when Russia invaded Ukraine, sending energy prices soaring as Moscow cut off most natural gas to Europe.

Supply chain bottlenecks and energy prices have eased, but inflation has worked its way through the economy. Prices are higher for services such as haircuts and hotel stays, and workers have demanded pay raises to make up for their lost purchasing power.

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The ECB has been trying to get a handle on inflation by raising interest rates, which makes it more expensive to borrow for big purchases such as houses or new factory equipment to expand a business which reduces demand for goods and, in turn, inflation.

But higher rates can also weigh on economic growth, leaving the central bank facing a balancing act over how far to go.

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Many economists think the ECB has finished raising rates unless something drastic happens to keep inflation from falling further. This could mean an increase in oil prices, which have risen recently after major producers Saudi Arabia and Russia extended production cuts.

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'Show solidarity': Pro-Palestinian protesters camp across Australian universities

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'Show solidarity': Pro-Palestinian protesters camp across Australian universities
Hundreds of people protesting Israel’s war in Gaza rallied at one of Australia’s top universities on Friday demanding it divest from companies with ties to Israel, in a movement inspired by the student occupations sweeping U.S. campuses.
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China increases aggressive moves against Taiwan as island prepares to inaugurate new president

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China increases aggressive moves against Taiwan as island prepares to inaugurate new president

KAOHSIUNG — Virtually every day, the People’s Republic of China does something unprecedented — its coast guard briefly boarding a Taiwanese tourist boat, flying military aircraft ever closer to Taiwan or increasing harassment of Taiwanese fishing boats in the South China Sea. 

“This is a problem,” says Dean Karalekas, author of “Civil-Military Relations in Taiwan: Identity and Transformation.” “Because these unprecedented actions are creating a new normal. Beijing hopes that we (the West) will sit by and watch as they take over Taiwan, just as we did when they used these same salami-slicing tactics to take over the South China Sea.” 

The world began noticing more of China’s hostile actions following the visit to Taiwan by former U.S. House Speaker Nancy Pelosi in 2023, but the strategy has been in place for some time. 

“China’s plan to ‘normalize’ military encroachments was planned long before Pelosi’s visit,” Taipei Times columnist and political commentator C. Donovan Smith told Fox News Digital. “The military exercises were far too complex and logistically complicated to have been planned in the short span of time between the announcement of her trip and her arrival in Taiwan.” 

TAIWAN ELECTION: RULING PARTY CANDIDATE WINS TIGHTLY CONTESTED PRESIDENTIAL RACE, UPSETTING CHINA’S AMBITIONS

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President-elect William Lai votes in southern Taiwan’s Tainan city Jan. 13, 2024.  (AP Photo/Ng Han Guan)

Surrounding Taiwan in a mock “quarantine” and performing missile “tests” in 2023 was also intended to push Taiwanese voters toward politicians and parties more friendly to China. But, as has been the case in the last three elections here, Beijing’s ploys were ineffectual. Taiwan in January elected the incumbent vice president, William Lai, to take over from two-term President Tsai Ing-wen. Both Tsai and Lai are members of the Democratic Progressive Party (DPP).   

The incoming Taiwan president has repeatedly pledged to make no changes to policies in place over the last eight years. Beijing, however, sees William Lai (Lai Ching-te) as a “splittist” and a supporter of Taiwan independence. Lai previously did voice support for independence but has tried to walk that back. China, however, does not forgive nor forget. Many political experts believe Beijing will ratchet up pressure as Lai enters office later this month. 

China's Xi Jinping

Chinese President Xi Jinping waves at an event to introduce new members of the Politburo Standing Committee at the Great Hall of the People in Beijing Oct. 23, 2022.  (AP Photo/Andy Wong, File)

A recent example of China’s attempts to establish this “new normal” is changes to airspace rules. China is close to finishing a massive new airport serving Xiamen in Fujian Province. Just 6.2 miles away, however, sits the island of Kinmen, which has remained a part of the Republic of China (ROC), better known as Taiwan, since 1949.

Kinmen Airport is strategically important for Taiwan. In 2015, the two sides worked out a deal to change a flight path that was a bit too close for Taiwan’s comfort. But in February, Beijing unilaterally backed out of the deal, announcing that, from May 16, new air routes would begin operating to “further optimize airspace” around the area. 

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FOR CHINA’S MILITARY PLANNERS, TAIWAN IS NOT AN EASY ISLAND TO INVADE

A Chinese fighter jet seen near Taiwan

A fighter jet flies in the direction of Taiwan as seen from the 68-nautical-mile scenic spot, the closest point in mainland China to the island of Taiwan, in Pingtan in southeastern China’s Fujian Province Aug. 5, 2022. (AP Photo/Ng Han Guan)

Few China watchers think China picked the day arbitrarily, says Karalekas. 

“Beijing has a pattern of testing new leaders of enemy states. They tested Bush with the EP-3E spy plane incident. They tested (then-Japanese prime minister) Naoto Kan with the Senkaku boat collision. We can expect them to test Lai by creating some sort of mini-crisis around the time he takes office on May 20.” 

“I think China is really ramping up threats,” Eric Hsu told Fox News Digital. Hsu lives in southern Taiwan’s biggest city, Kaohsiung, has worked on historical restoration projects and hosts a podcast on Taiwan history.

He says he isn’t only worried about military hardware, but also what he termed, “brainwashing videos and moves by KOLs,” (Key Opinion Leaders, a term used to describe internet influencers).

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Taiwan military vehicles equipped with U.S. missiles

Military vehicles equipped with a U.S.-made TOW 2A missile during a live fire drill in Pingtung, Taiwan, July 3, 2023. (REUTERS/Ann Wang)

Hsu places much of the blame at the feet of local opposition parties seen by many as more friendly to Beijing. Describing the current domestic political situation, he said Taiwan faces “not just an enemy at the gate, but also enemies within.” South Taiwan is a DPP stronghold, but not everyone in the south agrees that the opposition parties are the problem. 

Another resident of Kaohsiung, a self-employed businessperson and mother, Ms. Lin, thinks the DPP hasn’t been sincere in reaching out to China. 

“They’ve had eight years, and now they will get at least another four,” Lin told Fox News Digital. “What Taiwan needs are brave leaders, people willing to try new solutions, and I don’t see any such people in the current DPP leadership.”   

TAIWAN PRESIDENT-ELECT CHOOSES NEW FOREIGN, DEFENSE MINISTERS AS CHINA ANNEXATION THREATS INTENSIFY 

Taiwanese soldiers conduct live military exersies

Soldiers disembark from AAV7 amphibious assault vehicles during the Han Kuang military exercise, which simulates the China’s People’s Liberation Army invading the island July 28, 2022 in Pingtung, Taiwan. (Annabelle Chih/Getty Images)

The main opposition party, the Kuomintang (KMT), denies it is “China-friendly” and instead says it is “peace-friendly.” Chinese dictator Xi Jinping has met with the KMT’s Ma Ying-jeou twice, first in Singapore in 2015 when Ma was in office as ROC (Taiwan) president. It was the first time since the end of WWII top leaders from China and Taiwan sat in the same room. Each side in 2015 chose to ignore official titles and address each other as “Mr. Xi” and “Mr. Ma.” On April 10,, “Mr. Xi” and former Taiwan president “Mr. Ma” met again, this time in Beijing. 

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Some experts see such meetings between the KMT and China favorably, arguing that any dialogue is good and – if nothing else – provides a way for China to save face as it continues its policy of mandatory “reunification,” which China now says may need to be achieved by force. Others in Taiwan and abroad see Ma’s meetings as straying far too close to an acceptance of the idea that Taiwan is a part of China. 

 

China warship

A Chinese warship sails during a military drill near the Taiwan-controlled Matsu Islands near the Chinese coast April 8. (Reuters/Thomas Peter)

As it stands, the ruling DPP says it’s content with the status quo, including keeping Taiwan’s official name, the Republic of China. The KMT is generally more in favor of talks with Beijing under a mutual respect “consensus” idea that boils down to agreeing that both sides are “China,” but each side is free to interpret what this “one China” means.  

The problem with the KMT’s thinking, central Taiwan-based newspaper columnist and political commentator Michael Turton told Fox News Digital, is that “Xi’s goal is the complete subjugation of Taiwan, just like Hong Kong. Two of China’s ambassadors abroad have already indicated that Taiwanese opposed to Beijing rule will be shipped off to concentration camps. Given this goal, how can there ever be dialogue with mutual respect?”

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Brussels, my love? Champage cracked open to celebrate the Big Bang

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Brussels, my love? Champage cracked open to celebrate the Big Bang

In this edition, we zoom in on dwindling press freedom in Europe and check how Europe is doing 20 years after the big bang enlargement.

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This week, we are joined by Olena Abramovych, Brussels correspondent for Ukrainian TV, Ricardo Borges de Castro, analyst in European and global affairs and Polish journalist Dorota Bawolek.

Panelists reflect on the big bang enlargement of the European Union that took place 20 years ago when leaders of 10 new countries presented their flags to Pat Cox, then president of the European Parliament. Despite the bumps along the way, the panel agreed it was a success.

“Even though you can say that the story has not always be rosy, over the past 20 years it has been a great story”, Ricardo Borges de Castro said.

The panel also marked International Press Freedom Day by focusing on the dwindling press freedom in the EU.

“It is very worrying and at the same time, unfortunately, not very surprising”, said Dorota Bawolek, who suffered attacks both online and offline for her reporting, and experienced censorship.

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“Democracy in Europe is not living its best days at the moment. And media and media freedom is one of the victims of it”, she said.

Watch “Brussels, my love?” in the player above.

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