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Tuesday, July 23, 2024

‘Not just Taylor Swift’ fueling Eurozone inflation – Lagarde

The popstar’s 18-city European tour that kicked off in May has been driving up prices

Pop superstar Taylor Swift’s European tour is not the only factor keeping inflation high across the euro area, European Central Bank (ECB) President Christine Lagarde has said, according to a CNBC report on Tuesday.

The singer’s 18-city sell-out European Eras Tour kicked off in May, with some experts noting a significant economic impact on cities across the 20-nation Eurozone.

“It’s not just Taylor Swift, you know,” Lagarde told CNBC, responding to a question about whether Swift’s tour boosted services inflation across the euro area.

Services inflation, one of the ECB’s closely watched measures, held steady in the Eurozone, at 4.1% in June. Core inflation, excluding energy, food, alcohol and tobacco, remained at 2.9% from the prior month, narrowly missing the 2.8% consensus forecast.

At the same time, headline inflation fell to 2.5% in June, down from 2.6% a month before, in line with expectations from a Reuters poll of economists.

“Services is the difficult one,” Lagarde said, adding that “the jury is still out” on whether that stickiness is permanent.

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ECB President Christine Lagarde gives a press conference after the Governing Council meeting in Hesse, Frankfurt/Main, Germany on June 6, 2024
ECB cuts rates for first time since 2019

The ECB cut interest rates in June for the first time in nearly five years, lowering the key rate to 3.75% from a record 4%. Experts are expecting two more rate cuts this year.

There’s been much debate lately about the economic impact of Swift’s tour on the global economy as consumers traditionally splurge on concerts, meals, vacations and other recreational activities, pushing up prices. The impact was even dubbed by some as ‘Swiftflation’ and ‘Swiftonomics.’

Compared to her 2023 tour of the US, Swift’s European leg will bring an “even greater economic impact” this summer, Natalia Lechmanova, chief economist at the Mastercard Economics Institute, told Forbes earlier this year.

Experts cited by CNBC pointed out that overall increased consumer spending around major music tours, including for artists such as Bruce Springsteen, Pink and Sting, has been providing an economic boost. Others claimed that it is hard to gauge, insisting that central bankers should pay less attention to the impact of these one-off events.

July 03, 2024 at 03:16AM
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