Farewell bonus and increase in mortgages, the European Central Bank is ready to do anything to fight inflation

Farewell bonus and increase in mortgages, the European Central Bank is ready to do anything to fight inflation

Still economic inflation Too high and the European Central Bank decided to confirm a restrictive policy on interest rates. Not enough there Belt tension Regarding what interest rates will increase the cost of a mortgage, Europe is asking governments to say so Goodbye rewardsSubsidies for households and businesses granted to the energy crisis.

Inflation, the ECB continues, is very stubborn and this is due, among other factors, to the fact that there are too many public subsidies. For this in the note European Central Bank We read that as the energy crisis eases, governments must withdraw relevant support measures immediately and in a coordinated manner, so as to avoid increasing inflationary pressures in the medium term.

ECB’s request Say goodbye to bonuses to fight inflation It is reaching a critical moment, as Italy’s purchasing power is low and it is even experiencing difficulties in the market for basic necessities. Carts continue to see fewer and fewer products in them and this is inevitably reflected in other spending capabilities as well.

Time to say goodbye to bonuses: ECB plan to fight inflation at 7%

L’economic inflation It rose to 7% and could stay at these levels for a very long time. To say that it is the European Central Bank that identified some factors intransigence from inflation. In the note announcing monetary tightening By the ECB we actually read that there are a series of factors behind price stubbornness: corporate earnings, wages and finally Government support for the energy crisis. For these factors that determine inflation, the ECB can only apply more restrictive monetary policies if governments are unwilling to withdraw bonuses and other types of support.

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The difficulty of governments is evident, especially in Italy. Families’ purchasing power is low, as mortgages and utility bills drive inflation – spending costs are only 21% – and goodbye bonuses won’t please families and businesses. He knows that too European Central Bankbut the moment is rather critical.

Beware of inflation: tighten your belt

there European Central Bank Then talk about it Belt tension, because even if inflation starts to come down (at a very slow pace because we’re starting to see some measures work) it’s time to continue keeping interest rates high and sustainable, or in other words, tighten the screws to achieve the target. The goal set by Christine Lagarde, President of the European Central Bank, is bring inflation back to 2%.

The plan is always the same: cut subsidies for households and businesses, cut corporate profits to absorb part of wage increases and avoid speculation by exploiting the imbalance between supply and demand and the uncertainty caused by high and volatile inflation.

The note goes on to underscore how the European banking system has proven to be robust in confronting The collapse of Silicon Valley Bank and Credit Suisse, but also how it is necessary to determine the liquidity requirements of enterprises with poorly differentiated deposits and with a high percentage of uninsured deposits; Characteristics that turned Svb’s difficulties into the second largest banking failure in US history within a few hours, he recalled printing.

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