The shock sits first in the fuel bill
Energy Aspects forecasts a European jet-fuel deficit of 510,000 barrels a day in the fourth quarter, against a surplus of 18,000 barrels a day in the United States and 419,000 barrels a day in Asia-Pacific. South Korean flows to Europe so far in September stand at 129,000 barrels a day.[2]
Kristalina Georgieva, speaking at a special session of the Qatar Economic Forum in New York, said inflation is stubborn and that she is not anticipating a quick resolution. That, she added, means many central banks have to tighten.[1]
The policy rate reprices the public account
The fight to secure price stability has also, in Georgieva's words, increased the cost and difficulty of debt service. She said there is a lot of understanding of the need for fiscal consolidation, but not enough action.[1]
In Britain, Rightmove asking prices rose 0.7 per cent, or 2,441 pounds, to 367,440 pounds in September, the first monthly increase since May. The Bank of England held its rate at 3.75 per cent last week; average fixed mortgage rates have still been rising as the swap rates used to price those loans moved up.[3]
Household credit is still a narrow door
In the same September reading, homes for sale stood at a 12-year high for the time of year, and buyer demand remained below last year. Georgieva's mechanism shows up there: the fuel shock keeps inflation stubborn, the policy rate and swap pricing make household credit dearer, and on the public side debt service is still waiting on fiscal consolidation.[3], [1], [2]