Hey guys, brace yourselves because prices are going up! Whoopee! Latvia is seeing price increases of up to 15% – woohoo, time to break out the champagne. Meanwhile, in other parts of Europe, some workers are getting antsy because they need a pay raise just to keep up with the rising costs of living.
Of course, these differing rates can also be due to government measures to control those pesky energy prices. And as we all know, summer vacation season is here, so countries with popular tourist markets are going to feel the sting of rising service prices. Yikes!
Now let’s talk about Germany – Europe’s biggest economy. Their annual rate of inflation decreased to 7.6%, which is better than the 7.8% they had in March. Food prices are still stubbornly high though, and the government is working on ways to bring energy costs down. Good luck with that!
On a positive note, Germany’s public sector workers scored a big win with a deal for a 5.5% pay increase next year for 2.5 million employees. Nice one! But then again, this might create a domino effect for other employees to demand higher pay, which could make the European Central Bank’s prediction for wage growth go bye-bye.
Now let’s move on to France, where they’ve been dealing with strikes for months over the government’s decision to raise the retirement age. Inflation rose to 6.9% in April (from 6.7% in March) due mostly to energy prices. Service prices also went up a bit. Ooh la la, way to make things interesting!
And finally, in Spain, prices went up to 3.8% in April, from 3.1% in March, because of food costs. Energy prices, which were sky-high last year, came down a bit. Phew!
So what happens next? Well, it all depends on the European Central Bank’s decision. They have a meeting on Thursday, and most analysts predict they will vote to raise interest rates either by a quarter or a half percent. The bank wants to bring inflation down to their target of 2%, and they raised their deposit rate to the highest levels since 2008 to try and make that happen. Let’s hope they don’t shoot themselves in the foot!
Serious News: nytimes
