LONDON—A key market gauge of euro zone inflation expectations rose on Friday to 2 percent, the ECB’s inflation target, for the first time in seven years, putting pressure on the central bank as it weighs how to proceed with stimulus when its pandemic-era support ends. The five-year, five-year forward inflation swap, a key market gauge of long-term euro zone inflation expectations, jumped four basis points on Friday to hit its highest since September 2014 at 2.0029 percent. Shortages of workers, fuel, cargo ships, semiconductors and building materials as the global economy bounces back after pandemic lockdowns have left companies from electric car makers to chocolatiers scrambling to keep a lid on costs. Growth in euro zone business activity slowed this month as firms face soaring costs due to supply-chain constraints, while the bloc’s dominant service industry struggled amid ongoing COVID-19 concerns, a survey showed on Friday. Euro zone inflation hit …
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