Ross Clark Ross Clark

Eurozone inflation hits record 10.7%

Britain and the EU are converging in their respective economic crises

Britain’s economic problems can, of course, be laid at the door of Brexit. We know this because it was asserted on a BBC podcast which went viral over the weekend – and no one would question the BBC’s objectivity. But maybe there ought just to be a scintilla of doubt in the heads of the staunchest remainers given this morning’s news that eurozone inflation has reached 10.7 per cent – even higher than Britain’s latest CPI figure of 10.1 per cent. Markets had been expecting Eurozone inflation to stay a little below the 10 per cent mark.

Far from Britain parting off from the rest of Europe and entering a death spiral, it is remarkable how Britain and the EU are converging in their respective economic crises. As for inflation, so for economic growth. The S&P’s Purchasing Managers’ Index (PMI) – a concept which is calculated and published by several organisations – for the eurozone in October stood at 47.1 (anything below 50 denotes a shrinking economy). This is virtually indistinguishable from the figure of 47.2 for the UK, which I reported last week. Across the eurozone, economic growth has come out a little stronger in Germany and a little weaker in France.

So far, the hope of a newly independent UK economy trending towards higher growth has not been realised

And for bond yields? Pretty much the same story. Bond yields in the eurozone have been surging all year, with the yields on ten-year bonds touching 3 per cent last week, half a percentage point below those in Britain. As in Britain, so in the eurozone: over-borrowed governments are being punished by investors for their failure to balance the books. And of course, soaring inflation has a lot to do with the energy crisis which is being felt across the continent.

Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.


Unlock more articles



Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in