German GDP figures for 2023 was released yesterday and showed a decrease of economic output for 2023 by -0.3%. Showing that the German economy is struggling with higher interest rates. With that in mind, this morning we had German inflation for December recording a level of 3.7% from 3.2% in November.
Challenges ahead now is that Germany could face a situation of stagflation – meaning that economic output is performing worse while prices levels continue to increase.
The UK’s unemployment rate was unchanged in the three month period up to November at 4.2%. For now, UK is still showing a fairly stable labour market. Even if unemployment rate stayed at bay at 4.2% we could see that the impact affected average earnings, that declined from October’s 7.2% to 6.5% in November – creating pressure on households dispensable income.
Focus is now for tomorrow with UK core inflation and inflation rate for December, US retail sales and speeches from both ECB and the Federal Reserve.
