More positive picture for Europe’s economy Tuesday, UK inflation edges above zero for November, German investor morale on the up and European shares recover from previous session’s losses. Grace Pascoe reports.
Is four the magic number? Spanish consumer prices fell less than expected for a fourth month straight. Dropping 0.3 percent year on year in November. German investor morale climbed to a four month high - to 16.1 points in December. And UK inflation is back in the positive for the first time in four months for November, up to plus 0.1 percent. But the BoE's deputy governor Minouche Shafik still wants more wage growth before any rate hike. Peter Dixon is from Commerzbank. (SOUNDBITE) (English) COMMERZBANK, GLOBAL FINANCIAL ECONOMIST, PETER DIXON: "Primarily it is this low inflation story, the fact that wages may not pick up, the fact that oil prices have dipped further and increasingly I am of the view that so long as inflation remains below 1 percent the central bank is going to find it difficult to agree to raise interest rates." European shares have rebounded, despite Fed fears and oil spoiling the mood. Better times may be ahead for the euro zone. But for them to come, Jeroen Dijsslembloem says a euro zone insurance for bank deposits is a key priority. The Eurogroup President was speaking at the European parliament. (SOUNDBITE) (English) EUROPEAN UNION, HEAD OF THE EURO ZONE FINANCE MINISTERS, JEROEN DIJSSLEBLOEM, SAYING: "I'm convinced that the banking union, setting it up and finishing it, will for the economic recovery be more important than any other project at the moment. So that's what we should do." Leaders of the 28 EU nations will discuss the proposals later this week. And EU's biggest economy- Germany is expected to oppose the plans fiercely.