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After making a strong recovery from the pandemic, Europe’s luxury goods industry must now contend with the challenges brought by much higher than anticipated inflation, particularly around energy prices.
The rise in political risk has potentially divided the global trade interests and resource nationalism
has become a focus of all governments and trading blocs.
Fidelity International’s Chart Room shares their own current estimates of how high consumer energy bills in the largest European economies could climb over the next two years in the absence of government intervention.
With central banks seeking to tame high inflation, monetary policy is constrained, leaving governments to ease the pain of higher inflation where possible.
The markets have turned to the US for guidance on the interest rate direction, estimating that by the end of the year the Federal Reserve will pause its tightening.
Sticky inflation overshoots have left CBs far behind the curve, requiring a drastic catch up to fortify inflation credentials.
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