Monday, June 30, 2008

BIS: Economy Near "Tipping Point"

by Bill McBride on 6/30/2008 08:56:00 AM

From the WSJ: Bank for International Settlements Sees Economy Near 'Tipping Point'

In its annual report, the central bank for central banks said the impact of rising food and energy prices on consumers' incomes, combined with heavy household debts and a pullback in bank lending, may lead to a slowdown in global growth that "could prove to be much greater and longer-lasting than would be required to keep inflation under control."
Here is the report.

Meanwhile, from Bloomberg: European Prices Rise More Than Forecast as Oil Surges
The inflation rate in the euro area rose to 4 percent this month, the highest in more than 16 years ...

European retail sales plunged in June with the Bloomberg purchasing managers index falling to 44 from 53.1 in May.
``The surge in inflation is the reason why we've seen the economy lurching downwards,'' said Ken Wattret, senior economist at BNP Paribas in London. ``The pipeline pressures are increasing and the news on the wage front has been very alarming.''