Purchasing managers across the euro zone on Tuesday indicated a further contraction in activity in September, adding to evidence that the 15-nation region may have already slipped into its first recession since the introduction of the single currency nearly a decade ago, economists said. The preliminary Markit euro-zone composite purchasing managers index fell to 47.0 in September from 48.2 in August. The figure marked the lowest reading since November 2001 and a sharper-than-expected contraction in activity. Consensus expectations were for a reading of 47.8. A figure below 50 shows that purchasing managers believe they saw a contraction in activity, while a figure of more than 50 signals growth. http://www.marketwatch.com/news/story/euro-zone-pmi-data-heightens-recession/story.aspx?guid= Aug. 29 (Bloomberg) -- European Central Bank Executive Board member Lorenzo Bini Smaghi said inflation among the 15 countries sharing the euro is ``too high'' and must be brought below the bank's limit. ``Inflation is still high, too high,'' he said in an interview with Bloomberg Television yesterday in Cortina D'Ampezzo. ``We have a 2 percent target and we must bring it back to 2 percent -- below 2 percent.'' Bini Smaghi is the fourth policy maker this week to signal that the ECB hasn't moderated its resolve to fight inflation even as economic growth falters. Inflation in the euro area is running at twice the ECB's limit, driven by record oil and commodity prices. The Frankfurt-based bank raised its key rate to a seven-year high of 4.25 percent in July to prevent higher consumer prices from pushing up wages, entrenching inflation even further.
How about detonating atomic bombs in Paris, Berlin, Madrid and Rome. That's their only chance of ever getting EU inflation below 2%.
await the impending disaster about to hit europe. for some strange reason Trichet and the ECB seem to think they can avoid the worst credit crunch in history and that european banks are unaffected. come december 08 / january 09 when things start to take another downturn in the european economy you will see the greatest turnaround in monetary policy for a decade. oh dear there is no inflation. oh dear one of the spanish banks has gone bankrupt. oh dear employment is going through the roof. oh dear maybe we might have to slash rates. bunch of fucking idiots. when we wanted rate hikes years ago they did not want to it. when we want rate cuts they dont want to cut. cant work these guys out!!! talk about living in ivory towers. the european economy especially spain and ireland is on its knees.
Yeah, I don't understand why they are not following the FED's path to hyperinflation. Come on mr Trichet! Time is running!
no. just raise the rate to 8%. you know that extra 1% of lower inflation is worth unemployment in the moon and banks making the crunch even worse