Europe”s consumers face rising prices but ECB is unfazed – MENAFN.COM

Europe”s consumers face rising prices but ECB is unfazed – MENAFN.COM

(MENAFN - Gulf Times) Europe's consumers will feel the hit from price rises this year as companies seek to recoup revenues and cover pandemic-related costs. But for now, this is inflation the European Central Bank believes it can live with. Over the past year, the fallout from Covid-19 has contorted both the demand and supply sides of the global economy, creating bottlenecks in supply chains, havoc in freight markets and a rally in raw materials from corn to copper. Lockdowns, meanwhile, have deprived well-off consumers in Europe and elsewhere of the opportunities to spend their cash, creating record levels of savings and a window of opportunity for companies to push through price increases. While US inflation fears mount in the wake of President Joe Biden's massive stimulus plans — prompting Treasury Secretary Janet Yellen to clarify this week that she sees no problem brewing — things look different in a European economy still weighed down by coronavirus restrictions. On the surface, there is a perfect storm for price pressures to keep building as the region finally enters a recovery. Even after stripping out energy, euro zone producer prices in March recorded a year-on-year increase of 2. 3%, nearly double the