Better it has almost a chance for the Continent

And if the world was en route to a new surge of inflation Signs of this trend are multiplying. Latest: consumer prices appear to process skid to the United Kingdom. Yesterday, they learned that they had increased by 3.4 over a year in March, significantly more than the upper limit of 3 is determined by the Bank of England. Economists, who expected a surge of inflation, were not considered as high sales. Other countries have comparable trends, each at different scales. Go in India (read below), to the Viet Nam, in Australia, Malaysia, the price wrong, forcing central banks to respond. At the time where a two-speed global recovery scenario emerges, the waltz of the labels tends to accelerate and singularly complicates the task of economic officials. Some central banks, notably in Asia, may find themselves facing serious dilemmas, forced to arbitrate between growth and inflation.

The main fault is clearly identified: course raw materials (copper and aluminum) again known summits. A barrel of crude, which had plummeted below $ 35 at the height of the crisis, is now passed around $ 90. Could be added to the list. Most metals are concerned, to trade iron, base of the industry, which prices doubled since its low point.

China is the main cause of this phenomenon and the first to suffer. Major manufacturing centre, she became the first consumer of most industrial metals. It is primarily for the bulk of the increase in global consumption of raw materials. Including estimated that it represents almost 50 of the increase in world demand for oil.

The credible yuan appreciation

Beijing is thus found to undergo this skid which is largely responsible for. Last March, the Chinese import price index was up 17 over a year. While at the same time, the export prices fell by about 5 over a year, due to global competition exacerbated in a context of weak demand in most major developed markets. Difficult for exporters to maintain their margins.

In addition to this phenomenon, in the Chinese case, vigorous growth and an influx of speculative capital. What appears as a housing bubble, Beijing announced yesterday, his third measure in a week to try to limit transactions in the sector. Bei Xu, an economist at Natixis, notes that "If the evolution of the costs of labour, the price of real estate and most of the services are included in the calculation of inflation, we see that inflation felt by the Chinese population is actually higher than official figures would suggest".

In Asia, this outbreak of inflation could have repercussions in terms of exchange rate policy. Because the hypothesis of an appreciation of the Chinese currency, the yuan, becomes credible: such a choice would allow Beijing to reduce the price of imports. Little by little, a virtual consensus is emerging among analysts to make this the most likely scenario, even if debates are lively to know when will be the increase of the yuan, and what form it will take.

However, now, China opens often play in monetary matters in Asia. One recalls that in July 2005, when it had decided to embark on the path of an increase in the yuan, the Malaysia had suit in time. Today, judge Hervé Liévore, strategist at AXA IM, "it is clear that if most of the Asian central banks are hesitant to raise their rates, it is essentially for fear of losing competitiveness". Morality: "if their main competitor, China let its currency appreciate, a part of this constraint disappears."

In Europe, on the other hand, poorly, to imagine for the moment, this surge of inflation posed an imminent threat. Even if the current weakness of the currency access single European makes it more vulnerable countries of the euro area with soaring raw materials, it is not the time to worry, judge Cédric Thellier, an economist at Natixis. "Even with imported inflation as at present, it is difficult in the consumer price know a true skid", he said. Better: it has almost a chance for the Continent. Because, without this increase in raw materials, this is not inflation that Europe would be threatened, but deflation. "In view of the surge of unemployment, pressure is down on wages, so that the underlying trend in Europe is rather to lower prices," analysis Cédric Thellier. A Japanese scenario: it is in large part to the increase in raw materials, in particular oil, that Tokyo should have avoided the vicious circle of falling prices in recent years. Thank you imported inflation. Thank you China