Next week will bring mixed signals on how economies are coping with high inflation.
And inflation certainly is high. Official eurozone data will confirm that inflation was 7.5 per cent in March, mostly thanks to higher oil and gas prices; the rate excluding food and energy will be around 3.2 per cent.
Purchasing managers’ surveys, however, will show that the region’s economy is coping well with this. They should show that output of both manufacturing and services is still growing well, albeit a little less so than in recent months. This is because a fall in Covid-related staff absences and an easing in supply bottlenecks are offsetting the adverse impact of increased uncertainty. Germany’s Ifo survey, however, might show a less comforting picture, with current activity and expectations both declining.