Council worried about a risk of higher medium-run inflation in the eurozone
The release of the ECB December meeting minutes confirmed that inflation remained at the forefront of the Governing Council’s discussions last month. Notably, the assessment of the balance of risks to the inflation outlook seems to have shifted, with a risk of inflation staying “higher for longer” now more widely acknowledged.
What you will learn:
- The minutes and more recent communication continue to indicate that the Council remains divided, both on the inflation and the policy fronts.
- The doves point to a risk of a premature tightening, a lack of a sustained pick-up in a wage growth, as well inflation projections seeing inflation below the 2% target in 2023-2024.
- We continue to share ECB’s assessment that inflation will fall over 2022.
Tags:
Related research
Post
Firms must brace for higher ‘new normal’ construction material prices
New research by Oxford Economics suggests that construction materials prices have shifted permanently higher due to the shocks of the past couple of years. Project managers and investors should anticipate costs being at least 15-20% higher in 2024 and onwards than in 2021.
Find Out More
Post
New Activity Trackers suggest momentum is waning
After a choppy first quarter of GDP data, our novel Activity Trackers (which incorporate proprietary daily sentiment data from Penta) suggest that economic momentum in EM Asia is on a softer trend in Q2 (at least outside of China) supporting our view of easing underlying inflationary pressures and diminishing appetite for further rate hikes.
Find Out More