Today it was revealed that the unemployment rate in the euro area fell to an all-time low of 6.4% in November. Economists polled by Reuters had expected an unchanged unemployment rate of 6.5%.
These data underline why the ECB does not intend to lower interest rates in the near future, writes Bloomberg. Even during economic downturns, employers have difficulty finding employees, which in turn raises wages and creates a risk of inflation, the publication notes.
If the 6-month Euribor closed 2023 at 3.861%, it has now risen to 3.929%.
According to ECB Council member Boris Vujcic, the European Central Bank is unlikely to reduce financing costs before the summer. Even if inflation will continue to decline gradually, officials want to be sure of a slowdown and await corresponding data on the Eurozone labor market, the head of the Croatian central bank said on Monday.
As the year began, investors lowered their expectations of central banks and became more cautious. If at the end of the year the markets expected that the ECB would lower interest rates by 174 basis points this year, by January 5 the expectation had fallen below 140 basis points, writes Bloomberg.
Price increases accelerated in December
At the end of last week, euro area inflation in December became clear. If in the three months up to November the increase in prices had surprised with a number lower than expected and finally fell to the level of 2.4%, in December inflation recorded the expected increase and rose to 2.9 %.
Overall it met expectations. Economists gathered by Bloomberg expected the figure to be 2.9%, while Reuters had predicted 3%. You can see more detailed information here.
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2024-01-09 16:21:00
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