Given that the Fed (the global interest rate anchor) is clearly contemplating the end of the road for the tightening cycle, a big inflation number in Europe, in a month that should have reflected tightening global credit conditions, set off some alarms. Rates went higher, stocks went lower and commodities went lower – globally.
But it was a false alarm.
By this time next month, it's a good bet this same reading in the UK will have plunged.
Why? The "base effect."
The April inflation data will be measured against a significantly higher data point from twelve months prior.
Here's a visual, for perspective …