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Recent Editions
Risk Channel
North America
U.S. consumer prices rose 3.8% annually in April, the Labor Department reported on Tuesday, marking the highest inflation rate since May 2023, as higher energy costs and broader price increases intensified concerns about persistent inflationary pressures. The consumer price index increased 0.6% for the month, while core inflation, which excludes food and energy, rose 0.4% monthly and 2.8% annually, remaining above the Federal Reserve’s 2% target. Energy prices climbed 3.8% in April and were up 17.9% year-over-year, with gasoline prices surging 28.4% annually. Food prices rose 0.5% during the month, while grocery prices recorded their biggest monthly increase since August 2022. Inflation pressures also spread across shelter, apparel, airline fares, and household furnishings, while tariffs and elevated oil prices linked to the conflict in Iran added to broader economic concerns. The report also showed real average hourly wages fell 0.5% during the month and declined 0.3% annually, signaling that inflation is now outpacing wage growth.
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Risk Channel
UK/Europe
European Central Bank Governing Council member and Finnish central bank chief Olli Rehn has warned that data are beginning to point to stagflation as a consequence of the Iran war and rising energy prices. “The first signs were already visible in the statistics, when growth in the euro area in the first quarter was only slightly positive and inflation accelerated to 3%,” Rehn said. ECB policymakers in Frankfurt have so far held off interest rate hikes as they await more information on how the conflict is affecting prices more broadly. Rehn's Slovenian counterpart, Primoz Dolenc, observed: “The wider effects of the current environment could be demonstrated later, as risks of higher energy and commodity prices on global markets could gradually transfer into higher prices of goods and services.”
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