- UK Inflation Exceeds Central Bank Target
- Sharpest Increase in Japan’s Exports in 41 Years
- Biden-Putin Meeting Today
UK Inflation Exceeds Central Bank Target
Inflation in the UK exceeded the central bank’s target for the first time in nearly two years.
Consumer prices rose 2.1% year-on-year in May, according to data from the UK Statistics Office. This was the highest level seen since July 2019.
The median estimate of economists surveyed by Bloomberg was 1.8%. Core inflation rose 2% annually. As the economy started to open up, the increase in items such as fuel and clothing was influential in the rise.
“Today’s inflation print was much stronger than anticipated and confirms that as the UK economy proceeds in its reopening, inflationary pressures continue to build,” Ambrose Crofton, Global Market Strategist at J.P. Morgan Asset Management, said.
“All eyes now turn to the Bank of England meeting next Thursday for an indication on how and when it plans to start on the path to more normal policy,” Crofton added.
The Bank of England expects inflation to exceed 2% this year temporarily. However, economists predict that price increases may be permanent due to the rapid recovery after the recession due to the coronavirus.
Although price increases have accelerated in many countries in recent months, policymakers believe that this is not sustainable. For example, while headline inflation in the US rose to 5% in May, it was 2% in the Eurozone, slightly above the Central Bank’s target.
Sharpest Increase in Japan’s Exports in 41 Years
In May, Japan’s exports increased at their strongest rate since 1980. In addition, a key indicator of capital expenditures increased, helping the world’s third-largest economy balance weak domestic demand as Covid-19 vaccines boost corporate activity in crucial regions.
Japan’s exports increased by 49.6% in May compared to the same period last year. Exports, which increased by 38% in April, were expected to increase by 51.4% in May.
Imports increased by 27.9% compared to the same period of the previous year. In May, the trade surplus amounted to 187.18 billion yen, above the expectations of 91.2 billion yen.
Japan’s exports to the USA increased by 87.9% in May compared to the same month of the previous year. This was the fastest increase since January 1980, when data began to be recorded. Meanwhile, exports to the European Union increased by 69.9% in May.
By region, exports to China, Japan’s largest trading partner, grew 23.6%, led by chip production equipment, hybrid cars, and scrap copper, the trade data showed.
Core machinery orders in Japan increased by 0.6% in April compared to the previous month. Economists had expected a 2.7% increase in orders.
Compared with a year earlier, core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, grew 6.5% in April, versus an 8.0% advance expected by economists, the data showed.
Biden-Putin Meeting Today
Attending the NATO and US-EU Leaders’ Summit held in Brussels after the G-7 Summit, US President Joe Biden will meet face-to-face with Russian President Vladimir Putin for the first time as the last stop.
The Biden-Putin summit, where all discussion themes were agreed beforehand, is scheduled to consist of three parts. A narrow-format meeting will be held, and two extended conferences will be held.
The meeting will focus on strategic stability, pandemic, cybercrime, economic cooperation, climate crisis, and the Arctic. Ukraine is one of the tensest issues in the meeting, which NATO stipulates for membership and sends troops to Russia’s border regions and intervenes.
In addition, regional developments in Syria, where both powers are active, will be discussed. Libya, where Biden gave the message “We will not work together” to Russia, will also be on the table, and the US side will have suggestions.
Afghanistan, where NATO decided to withdraw, and Karabakh, where the conflicts have stopped for the time being and within the sphere of activity of Russia, are among the two agendas.
The meeting, which will be held in Geneva, is planned to last 4-5 hours.