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German inflation expectations jump to 8-1/2 year highs -Breaking

by Mike Robinson

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By Saikat Chatterjee

LONDON, (Reuters) – Inflation expectations for Germany rose to an 8-1/2-year high on Friday. This was due to growing concerns that the European Central Bank would keep monetary policy in a dovish mode next week as a result of increasing inflation data.

According to Refinitv data, the German 10-year breakeven inflation rate (the difference between nominal bonds and their inflation-indexed counterparts) rose to approximately 1.81%. This is its highest level since April 2013.

After weeks of increasing energy prices and record coal prices amid tight supply and rising demand, inflation is expected to rise.

As the global supply chain is reopened from COVID-19 lockdowns, and as a result of labour shortages, price pressures are also being driven by these problems.

However, unlike other central banks such as the U.S. Federal Reserve and European policymakers are not likely to change their pandemic-era stimulative settings.

The similiar gauge at the United States was at its highest since August 2006, at 2.64%.

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