Inflation with interest

Everything was going well until a few months ago she appeared. Both with the escalating energy prices, which have brought the kilowatt to record levels, such as the lack of raw materials and supplies, they have made it reappear. We believed that it was not so necessary that wages -the unions are already demanding increases- and other incomes will be linked to it, but it has returned, and at levels that we did not see for almost 30 years, when the interest rates on loans were in the double digits.

But, as the former president of the German Bundesbank said, Karl Otto Pöhl, “the inflation It’s like toothpaste: once it’s out, it’s very difficult to put it back into the tube. ” Federal Reserve of the USA as the European Central Bank (ECB) insisted that the current rise was a transitory phenomenon.

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Now they no longer say it: the president of the Fed, Jerome Powell, acknowledged on Thursday that inflation has “generalized” and reached all sectors and that it will last “Until well into 2022”. And its European counterpart, Christine Lagarde, admitted that “it will remain high in the short term”, and already predicts an important level next year: 3.2% compared to an average of 2.6% in 2021. The Bank of Spain has also revised up the Underlying inflation, which excludes volatile elements such as energy or unprocessed food, and the general one for 2022.

All of this fuels the ghost of money price rises, located at 0% in the euro zone since March 2016. The Federal Reserve already anticipates at least three uploads next year, with a growth rate that has already allowed it to recover the precovid level. The ECB, for its part, has delayed that milestone from the end of this year to the first quarter of next, but with the pressure of the general level of prices, which from energy has already passed to the food, the rise in the price of money is closer. Good news for savers and the banks, but not very good for the mortgaged. That is why inflation must be followed with interest.

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