Reported by Bloomberg, 18th August 2008
Blue Horseshoe
If that’s the case then good news for Ireland. As we are having a tradition of high inflation (4%+) here there wouldn’t be too much harm of ECB rates are based on higher inflation economies. Apart from higher interest rates helping to get the air out of the bubble as well.
Hmm, not sure, depends on what you mean by ‘good’.
In the short term, low german inflation would be considered by many to be ‘good’ for ireland, since it would lead to low interest rates. High enough german inflation, especially after the excuse of rising commodity prices is gone, will force the ECB’s hand to raise rates.
For the time being I think high(er) interest rates are good for Ireland as it might help to get the property market back to sustainable levels quicker than low interest rates. Also, I like to see interest rates on my savings account at least to be close to inflation but two per cent lower.
I am not entirely sure how much of a negative impact it will have on the rest of the economy. Nevertheless, I am with the ECB when it comes to price stability.
US PPI numbers not so hot either:
Quoted on tickerforum.