Tomorrow, Thursday, the central bankers of the European Central Bank (ECB) will raise the key interest rate for the first time in eleven years. According to media reports from informed circles, the extent will be discussed. Instead of raising key interest rates by 0.25 percentage points, as previously signaled, the decision could also be taken to raise them by 0.5 points, according to the Bloomberg and Reuters news agencies. The extent is still open. However, some central bankers urge caution in view of a possible looming recession.
The inflation rates published yesterday in the euro zone underpin the pressure on the ECB. With 8.6 percent compared to the same month last year, this has reached a new record value.
The estimate from July 1 was also confirmed in Austria. 8.7 percent depreciation mean the highest value for 47 years. The price increase for weekly shopping was particularly noticeable: the mini-shopping basket, which contains food and services as well as fuel, is almost 19 percent more expensive year-on-year.
In addition to eating, drinking and driving, housing has also become more expensive. The prices for housing, water and energy were increased by an average of ten percent – even more than in May. The maintenance of apartments cost around 13 percent more, which was mainly due to the rising cost of materials. The perception is exacerbated by the fact that the economic research institute (Wifo) assumes in its medium-term forecast presented yesterday that employees in Austria will be faced with a per capita real wage loss of almost four percent this year.
In view of the inflation, the president of the trade union federation, Wolfgang Katzian, called for a “price commission with bite”. If price advantages are not passed on unjustifiably, the experts could intervene directly by changing the law. Economics Minister Martin Kocher was skeptical about this yesterday: the minister filled the incapacitated price commission (the mandates expired at the end of June). “You shouldn’t have too many expectations.” Price caps led to less supply. “And the price commission cannot determine the quantity produced,” said the minister. In addition, electricity and gas are excluded from the price law.
Growth significantly cooled
Kocher presented labor market figures yesterday. Unemployment is 296,000 at the level of the previous week. The stricter criteria for short-time work had an effect: with 5585 registrations, this no longer played a role. Wifo assumes that the gross domestic product will grow by 4.3 percent this year. In the four following years, however, only around 1.5 percent.
Source: Nachrichten
