Political Briefing #30/2016

01/04/2016

POLITICS & POLICY

EU – European Central Bank: Inflation

Despite the European Central Bank’s ongoing stimulus programme aiming at beating deflation, it appears that consumer prices in the Eurozone fell, in March, slightly more than in the previous month. In addition to the quantitative easing already in place, the ECB recently decided to cut interest rates and to pump additional money into the banking system in order to facilitate lending. According to Eurostat, however, due to falling energy prices, “price pressures remain very weak”.

Source: Wort, 31/03/2016

UK – Benefits: The new budget and redistribution

A study by the Fabian Society argues that, by 2020, Britain’s top 20% earners will receive almost the same amount of support by the state as the poorest fifth receives in benefits. This “shadow welfare” is caused by the significative tax-breaks included in the UK’s new budget. According to the Fabian Society’s general secretary Andrew Harrop, the budget is only “the latest step in a radical reshaping of the welfare state”. Concretely, by the end of the decade, the country’s wealthiest strata could receive an average of £9,400 a year in tax allowances and welfare benefits, while the poorest will receive on average £10,200 in benefits–which often represent their only source of income.

Source: The Guardian, 1/04/2016

Belgium – Inflation: Positive outcomes?

Even though inflation is negative everywhere else in Europe (-0.1%), in Belgium it reached 2.24% in March. While this implies a shift upwards in wages and social benefits, it is estimated that much of these increases will be spent on electricity bills.

Source: Flanders news, 31/03/2016