Eddie George, Governor of the Bank of England, warned of the dangers of a political backlash against low inflation policies if Europe did not solve its structural unemployment problem. Speaking at the Institute of Petroleum's annual dinner, he said: "Unemployment is the most urgent issue confronting Europe." The Governor said that while the Maastricht timetable might constrain growth in the short run, labour market rigidities had also pushed up structural unemployment over the long term.
Consumer prices in the US increased by only 0.1 per cent in January, taking the annual inflation rate down to 3.0 per cent from 3.3 per cent in December. The core inflation rate, excluding food and energy, declined to 2.5 per cent. Although the figures were much better than expected, just one component - air fares - accounted for the surprisingly low increase in core prices.Reuse content