Even recession may not bring down Europe’s inflation

to spot the peak when hiking in the fog. What is true in the Alps is just as true for policymakers who are . In the euro zone, consumer prices in October were 10.7% higher than a year earlier. The European Central Bank () has increased interest rates by 0.75% for the second meeting in a row, as it dutifully follows the path trodden by America’s Federal Reserve. Officials very much hope the peak is around the corner. Optimists among them point out that the euro zone implemented no major fiscal stimulus after the covid-19 pandemic, unlike America, which means inflation has been driven by supply shocks and energy prices, rather than an . Recent spending packages in Europe have sought to cushion the blow from eye-watering energy prices, not stimulate spending. In the second quarter of the year, consumption was less than 2% above the same period in 2019. In America it was 7%.