The price increase peaked at 5% in December 2021 in the euro area, due to the flight of commodity prices and tensions on supply chains. At the expense of the most modest households and small businesses, hard penalized.
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In Warsaw, energy bills that burst, kneeling small businesses. In Dublin, young people who can no longer afford a housing. In Spain, an explosion of social conflicts. And, in Italy, the price of pasta that flies away.
from Poland (8% inflation in December 2021) to Ireland (+ 5.7%), to Estonia (+ 12%) and Spain (+ 6%), everywhere In Europe the question of the cost of living is again at the heart of the concerns. In the euro area, the price index jumped by 5% on average in the last month of 2021. Households now see their purchasing power erodes.
It should still relativize: in 2020, prices declined, so that inflation over two years is not as strong as it seems. Neither Europe is in the situation of the United States, where it culminated at 7% in 2021. In addition, the phenomenon strikes countries unevenly. While East Europe and the Baltic countries are particularly affected, France remains, on the other hand, relatively spared (+ 3.4% in December 2021). The more or less effective measures taken by the public authorities to limit the outbreak of invoices explain these differences.
Rest that the shock is real, and households suffer everyday consequences. While, Wednesday, January 26, Barrel of Brent exceeded the 90 dollars bar (80 euros) for the first time since 2014, the rise is largely linked to the flight of energy prices, which weighs at It alone for half of inflation in euro zone. But it is also the result of the disorganization of the production chains linked to the pandemic, which increases the costs and generates shortages.
In the face of this crisis, the public authorities can hope that the phenomenon is temporary: after all, the logistics chains show first signs of improvement, and the prices of energy could stabilize at a high level. In this case, compensate for the loss of purchasing power by social aid and wage increases is justified.
But the risk is to enter an inflationary spiral difficult to break, as in the 1970s, where the rise in prices justifies increases of wages, which in turn feed the flight of prices, etc. The aftermath of the pandemic are shrinking difficult.
Real Estate: Dublin went into a city out of price
On one side of the canal, the meta’s Irish headquarters, Facebook’s mother house, presents its glass walls with treble angles and its apparent piping. On the other, a great Google logo proudly know the tenant of the place. Between the two, in front of a few coffees and fashionable restaurants, trendy young and multilingual people scroll with their computer under the arm.
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