\u201cThe eurozone is facing deepening economic woes from the war in the Middle East, presenting a major headache for policymakers,\u201d said Chris Williamson, chief business economist at S&P Global. \u201cIncreasingly widespread supply shortages meanwhile threaten to dampen growth further while adding upward pressure to prices in the coming weeks.\u201d<\/p>\n
Separate PMI readings for Germany and France \u2014 the region\u2019s two largest economies \u2014 also showed private-sector activity contracting in April, while inflationary pressures continued to build. <\/p>\n
The eurozone survey showed that companies raised their prices at the fastest rate in 37 months in April, while their own input prices rose the most since the end of 2022.<\/p>\n
This combination of weak growth and persistent price pressures \u2014 stagflation \u2014 poses a particularly acute dilemma for the European Central Bank. Efforts to tame inflation by raising interest rates would risk deepening the economic slowdown.<\/p>\n
\u201cThe ECB once again has the unenviable task of deciding whether to raise interest rates in the face of the worrying inflation picture, or whether this price spike will prove temporary and its focus should instead be on preventing the economy from sliding into a deeper downturn,\u201d Williamson said.<\/p>\n
Faced with that trade-off, ECB policymakers have signalled they are unlikely to take any decision when they next meet on April 30.<\/p>\n
\u201cNo one really knows how long the situation will last, and by next week I doubt we\u2019ll have much more clarity,\u201d ECB Chief Economist Philip Lane said on a panel in Frankfurt on Wednesday, referring to the April 29-30 meeting. \u201cUntil we have a better sense of how long this war will continue, it\u2019s very hard to judge whether this is a temporary phase or a more persistent shock to the European economy.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cThe eurozone is facing deepening economic woes from the war in the Middle East, presenting a major headache…\n","protected":false},"author":2,"featured_media":624280,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,27178,50131,1659,135,4990,234122,6578],"class_list":{"0":"post-624279","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-economy","12":"tag-eu27","13":"tag-eurozone","14":"tag-growth","15":"tag-inflation","16":"tag-monetary-policy","17":"tag-philip-lane","18":"tag-retail"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/624279","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=624279"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/624279\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/624280"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=624279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=624279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=624279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}