European Central Bank policymaker Jan Smets recently stated inflation across the Euro Zone appears to be stabilising. The news comes as the Central Bank are due to decide if they are going to reduce their economic stabilisation programme.
With the European economy appearing to be in good health it seems almost certain less government bonds will now be purchased. Added complication comes from the Euro’s recent rally against the US dollar, this could influence inflation by making imports cheaper and exports more expensive.
Whatever decisions is taken, the balancing act of wage growth, inflation, euro strength and economic stimulus needs to be played out perfectly for the Euro Zone to continue their forward progress.