, Columnist
Macron and Meloni Throw Down Inflation Gauntlet to the ECB
France and Italy have a point in suggesting higher interest rates to tackle inflation will hurt more than help.
To the rescue.
Photographer: LUDOVIC MARIN/AFPThis article is for subscribers only.
When government spending collides with central-bank rate hikes in the face of rampant inflation, markets take fright. That’s the lesson for UK Prime Minister Rishi Sunak after the implosion of his predecessor’s “Trussonomics” bazooka of energy aid and tax cuts. A more austere path beckons.
The euro zone has dodged this turmoil, which gives an idea of where the real economic radicals sit these days. But an inflation standoff looms there too as governments express frustration with the tightening path of the European Central Bank. France’s “Macronomics” suggests such dissatisfaction has a point.