Europe | Monetary Policy & Inflation | Rates
Ignore the Headline(s), Eurozone Inflation is Not Fading
- By Henry Occleston
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- 6 min read
Summary
- July national Eurozone inflation outturns confirmed that headline rates are returning towards a trajectory typical of the pre-COVID period.
- Much of this is due to energy and transport inflation falling out. The question is whether this will continue ahead with gas and oil prices rising.
- The trajectory for core inflation should be more concerning for the ECB – it has deviated back from typical levels recently.
- Wage-intensive services sectors are one driver of this – the momentum there is high and continually rising.
Summary
- July national Eurozone inflation outturns confirmed that headline rates are returning towards a trajectory typical of the pre-COVID period.
- Much of this is due to energy and transport inflation falling out. The question is whether this will continue ahead with gas and oil prices rising.
- The trajectory for core inflation should be more concerning for the ECB – it has deviated back from typical levels recently.
- Wage-intensive services sectors are one driver of this – the momentum there is high and continually rising.
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