Last week’s major euro-zone data releases will have done nothing to ease the ECB’s fears about inflation. March’s rise in headline CPI inflation will be particularly worrying, given that it may have been down to a pick-up in the core component. But even if core inflation is beginning to rise, this is not necessarily as worrying as it may seem. After all, it may partly reflect a rise in the price of goods and services, such as restaurant prices, whose costs are heavily influenced by food and energy and are perhaps not a sign of broader “second-round” inflation effects. What’s more, with euro-zone labour cost growth still very subdued, we still think that inflation will fall back below 2% next year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services