Slow Recovery of Inflation and debt with the mighty

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United States

Fitch Retains ‘AAA’ Credit Rating With a Stable Outlook
Fitch Ratings affirmed the US ‘AAA’ credit rating with a stable outlook, insisting on the nation’s ability to raise revenues and absorb another economic crisis despite a downgrade by Standard & Poor’s over debt default concerns earlier this month. Fitch noted that the “key pillars” of US’s exceptional creditworthiness remains intact and its monetary and exchange rate flexibility further enhances the capacity of the economy to absorb and adjust to ‘shocks’. The US economy unfortunately remains mired in a painfully slow recovery. Fitch predicts that the recovery will regain momentum and that a period of above-current-growth trend will subsequently be followed in the long term.

Eurozone
Annual Inflation Falls to 2.5% in July 2011
Eurozone annual inflation slowed to 2.5% in July from 2.7% in June according to data released by Eurostat. The fall in inflation can be attributed to weak demand on the back of spending cuts across member nations of the currency bloc following debt crises that characterised the Zone. Core inflation slowed to 1.2% from 1.6% in June while food inflation edged down to 2.6%. Although, the European Central Bank (ECB) had earlier taken measures to raise key interest rates twice this year, Euro zone inflation continued to stay above the 2% ceiling. Slowing economic growth and recurrent sovereign debt crises may compel ECB to hold off further quantitative tightening.

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