Europe Still Has Half of Stagflation to Solve: Marcus Ashworth

Recession looms for the euro area, with the latest batch of data showing momentum has evaporated. The economy contracted by 0.1% in the third quarter, most of the bloc’s economies are flatlining, and Germany, its biggest engine of growth, is shrinking. Even supposedly good news, such as slowing inflation, just illustrates how quickly the outlook is deteriorating. It’s time to improve coordination between fiscal and monetary policies, which worked wonders during the pandemic but risks being rendered pointless.

The European Central Bank should accept that its interest rate-hiking cycle is over. Inflation has declined to the slowest pace since Russia invaded Ukraine, ...