21: Light at the end of the tunnel?
Is there a light at the end of the tunnel, or is it just the headlights from the speeding train coming straight at us?
Last Wednesday, the European Central Bank (ECB) held a summit in Portugal and is set to trigger its first rate hike in over a decade at its next meeting on July 21, as inflation in the eurozone surges.
'Bringing down high inflation around the world will be painful and could even crash growth but must be done quickly to prevent rapid price growth from becoming entrenched', the world's top central bank chiefs said. The most memorable statement from Wednesday's summit came from Fed Chair, Jerome Powell - "I think we now understand better how little we understand" when speaking about inflation...
Another talking point is productivity. Britain’s productivity growth has lagged the rest of the G7 “throughout much of the post-war period, which seems to indicate a deep structural problem,” according to the National Institute of Economic and Social Research (NIESR). There has been a real stagnation of UK productivity since the recession of 2008/09, so how can this productivity puzzle be solved?
Productivity growth is typically characterized by economists as the key to improving living standards, boosting overall output, and controlling inflation.