While inflation rose further in the Netherlands in July, the number actually fell in the US. Inflation in the US was 8.5 percent in July, up from 9.1 percent a month ago. The average inflation rate in the European Union is 8.6 percent, higher than the US average. According to PNR’s home economist Han de Jong, this is mainly due to energy costs.
‘The main difference between the US and Europe is gas prices,’ says de Jong. In Europe, gas prices have risen due to conflict with Russia and dependence on Russian gas. In the United States, gas prices have risen at a slower pace. The price of electricity depends on the price of gas. ‘In July, a Dutch household had to pay 117 per cent more for electricity than a year earlier. In the US it is only 15 percent.
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De Jong says inflation seems to have peaked. “We’re in bad shape right now.” The question now is when the decline will begin and how quickly the numbers will fall, de Jong says.
Exhibitors were delighted
Inflation peaking in the U.S. is also creating gains in Asian stock markets. In Hong Kong, Shanghai, Seoul and Sydney, indicators were in gains. Markets are taking into account that the US Federal Reserve is more cautious about raising interest rates now that deflation appears to be easing.
Stock markets in New York also closed with solid gains yesterday.In the last two interest rate decisions, interest rates were raised by solid steps of 0.75 percentage points. Now that inflation has cooled somewhat, the central bank could raise interest rates somewhat more strongly with its next interest rate decision in September. “The central bank will continue to increase, but the pace will essentially slow down,” Han de Jong expects.
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