Eurozone | ECB Watch – A controversial debate on inflation looms
We don’t expect any policy changes to emerge from the October ECB meeting as key policy decisions are closely tied to updated macroeconomic projections due in December. However, this week’s meeting will clearly set the tone as the council will intensify a likely controversial debate about the inflation outlook.What you will learn:
- The surges in electricity, natural gas and oil prices will push inflation towards 4% in Q4.
- This makes a further upward revision of the ECB’s near-term inflation forecasts a foregone conclusion.
- We expect inflation to fall well below 2% by H2 2022 and see no signs of second round effects that would significantly alter our or the council’s majority view on the weak outlook for underlying inflation.
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