Euro-zone driver shortages less acute than in the UK

The shortage of heavy goods vehicle (HGV) drivers in the euro-zone appears to be nowhere near as acute as in the UK. We therefore don’t expect to see a surge in drivers’ wages that would lead to widespread upward pressure on pay throughout the euro-zone labour market. What next for the ECB? We’re hosting a post-mortem after Thursday’s Governing Council meeting at 1100 ET to discuss its decision and our views on the euro-zone’s economic and inflation outlook. Register here.
Jessica Hinds Europe Economist
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European Economics Weekly

Energy, semi-conductors and Italy’s Green Pass

The continued high level of energy prices strengthens our view that euro-zone inflation will keep rising in the coming months. But by lowering consumers’ purchasing power, it could actually reduce inflationary pressure in the medium term. Meanwhile, data released this week added to the evidence that supply problems are weighing on German car manufacturers, and things are unlikely to get better any time soon. Finally, Italy’s new Green Pass requirement for workers came into force today, sparking protests at a number of ports. But so far the disruption seems to have been limited.

15 October 2021

European Data Response

Euro-zone Industrial Production (Aug)

The large decline in euro-zone industrial production in August was largely due to supply shortages affecting production, particularly in the German auto sector. While demand is still strong, prolonged supply shortages and high input prices suggest manufacturing will continue to struggle in Q4.

13 October 2021

European Economics Update

“Underlying inflation” still weak

Core inflation in the euro-zone rose to 1.9% in September, its highest level in nearly 13 years, but other measures of underlying inflation are much lower. This supports our view that when the temporary forces pushing up inflation have faded, the core rate will settle well below the ECB’s target.

12 October 2021

More from Jessica Hinds

European Data Response

EZ Unemployment (Jul.) & Final Mfg PMIs (Aug.)

The fall in euro-zone unemployment in July appears to be down to a decline in the overall labour force rather than an increase in employment, highlighting that the labour market recovery still has a long way to go. But with hiring activity increasing, the jobless rate should continue to fall.

1 September 2021

European Economics Focus

Getting a handle on euro-zone wage data

Euro-zone wage data are published only quarterly, and with a long lag, and have been distorted by pandemic-related effects. So it will be another six months before we get a clearer idea of the underlying trend in earnings. For now, though, measures of spare capacity suggest that wage growth is likely to remain around 2.0-2.5%, which has in the past not been enough to push consumer price inflation to 2%.

31 August 2021

European Economics Weekly

Business surveys point to continued recovery

The business surveys for August published this week provided some reassurance that the euro-zone economy is continuing to grow at a decent pace. And the decline in the forward-looking components is not too worrying since the pace of growth was always likely to tail off as the economy got closer to "normal". Next week, we expect flash inflation data for August to show big rises in the headline and core rates, due to base effects related to the timing of summer sales last year.

27 August 2021
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