‘Omicron has put a dent in the global economic picture. While it may be medically less severe, its high transmissibility, together with the need for contacts to isolate, mean it can compound supply side constraints.’ Picture: GettyThe EU accounts for about 35 per cent of our exports and decides our interest rates, so it’s an important question.
Consumer confidence which has been on a downward path since October continues to edge lower. In addition to any Covid fears, higher energy costs act as a further drag on the consumer mindset. Higher frequency data such as cinema and restaurant bookings have also collapsed, reflecting the targeted government policy.
To the extent that demand is an input to our inflation outcome that pressure is receding and supporting the policymakers’ view of inflation peaking.