Europe’s seeing inflation fade. The UK still has it bad. In Japan, inflation is actually good news.
According to Pierre Lafourcade from UBS, the United Kingdom is currently facing a massive inflation impact across various sectors, as business transactions are conducted using the British currency, pounds.
It seems like we are gradually managing to tackle inflation in our nation. However, our nation is not the sole location in the world facing the issue of escalating prices.
In many regions, inflation has remained elevated and persistent following the peak of the pandemic.
According to Pierre Lafourcade, a senior economist at UBS Securities, the eurozone has been unfairly criticized. He challenges the common belief that inflation is spiraling out of control, stating that this is not entirely accurate.
In June, the rate dropped to 5.5%, reaching its lowest point since the start of the previous year. "This can largely be attributed to deflation in the energy sector."
Over in the United Kingdom, Lafourcade remarked that the situation is far from ideal.
Currently, the United Kingdom is facing an enormous inflation shock in every single category," he stated.
Inflation is currently at approximately 9%, and the decrease in energy prices isn't providing much relief. According to Gregory Daco, the Chief Economist at EY, various factors are responsible for keeping core inflation at a high level. These factors include the impact of Brexit on trade costs, concerns related to healthcare spending, and the rising costs of healthcare services.
That's everything while the growth is lethargic. "This is the usual situation of stagflation," Daco mentioned.
Next, let's consider Japan, where a few decision-makers are genuinely pleased with the resurgence of inflation.
Keep in mind that Japan had almost no inflation for many years. In fact, the country even went through a period of deflation, where the motivation is not to spend and instead wait for prices to decline further, as stated by Joe Brusuelas, the chief economist at RSM.
However, with inflation currently sitting at around 3%, it is now giving people a reason to spend their money, and to invest in a manner that Japan hasn't witnessed in the past thirty years, according to Brusuelas.
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