Diverging Central Banks, BOE Caution, China Stimulus: Eco Day

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Welcome to Monday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the week.

• The world’s top central banks are diverging, as some turn to tackling surging inflation while others keep stoking demand, a split that looks set to widen in 2022
  • U.S. consumer prices rose last month at the fastest annual pace in nearly 40 years, increasing pressure on the Federal Reserve to tighten monetary policy
  • It’s a big week for central banks. Read our wrap of what’s coming up in the global economy here, and Bloomberg Economics’ previews on the Fed, European Central Bank and Bank of Japan here
  • The Bank of England is set to opt for caution over Covid rather than worries about inflation, pushing back its first rate increase since the pandemic into 2022, according to economist
• The European Central Bank’s biggest decision this week is to decide if it can still call the current inflation spike “transitory”
  • The worst is over for firms and households feeling the pinch of higher prices in the euro-area as inflation is fading from a record high, according to Bloomberg’s latest survey of economists
  • ECB Vice President Luis de Guindos is self-isolating after testing positive for Covid-19 on Saturday
• Economists predict China will start adding fiscal stimulus in early 2022 after the country’s top officials said their key goals for the coming year include counteracting growth pressures and stabilizing the economy
• Asking prices for homes on sale in the U.K. fell for a second month in December, indicating the property market lost momentum at the end of a strong year
• Japan’s biggest manufacturers are less optimistic about the coming months as uncertainty over the omicron variant tempers bullishness
• Restrictions on empty-container returns at major ports are the top issue that needs fixing to help ease U.S. supply-chain bottlenecks, the head of the Harbor Trucking Association said
• Poland will probably raise its main interest rate by 50 basis points in January, which would mark a fourth consecutive monthly increase, said Lukasz Hardt, a member of the Monetary Policy Council
• Saudi Arabia boosted its revenue forecast for next year, with higher oil prices and production volumes poised to deliver the first surplus since 2013
• Finally, what could possibly go wrong? Here are the biggest economic risks for 2022

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