Eurozone weekly economic briefing | High inflation keeps fuelling debates
With eurozone inflation confirmed at a record-high of 5.0% y/y in December, the debate over how long upward price pressures will continue returned to the spotlight this week. In particular, after months of defending its dovish position, the ECB Governing Council now acknowledges a wider risk of inflation staying “higher for longer”.
What you will learn:
- Despite this shift in the balance of risks, the ECB central scenario continues to see inflation easing markedly over H1 this year and even falling below the 2% target later in H2, which is consistent with our own baseline.
- Easing supply bottlenecks, falling energy prices and a normalisation in economic activity after the post-lockdown rebound will be behind slowing prices, while medium-term structural drags on inflation will again become apparent.
- On the political front, in a speech to the EU parliament, France’s President Emmanuel Macron set the priorities for his country’s six-month presidency of the EU Council.
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