– yes, Aussies, I know it’s only 11 degrees, but everything is relative – it suddenly feels like at least some of the pessimism might have been overdone.
European benchmark gas prices are 80 per cent lower than the record set during anxious August, when it was unclear if major users would be able to scrounge enough LNG to get through the winter. “It appears that overall real GDP growth still has a bit of momentum, perhaps as the government’s cost-of-living payments meant that households had more cash to hand in November,” said Capital Economics senior UK economist Ruth Gregory.
We may be inured to big inflation numbers, but the British rate is still a hefty 10.7 per cent. That has slowed from a peak of 11.1 per cent, and it looks as though trade unions are getting ready to compromise on their big pay demands. But there will still surely be interest rate increases from the BoE in the first quarter.
Goldman Sachs has reversed its forecast of a technical recession in the 20-member eurozone , and is now tipping 0.6 per cent growth. Even some of the more bearish analysts have recast their outlook from a recession to a mild slowdown.The really good news out of Europe is that inflation cooled to 9.2 per cent in December, although the core rate is still heading up. No prizes for guessing that energy costs were behind all that.