Euro-zone Flash HICP (Aug.)

After rising to a near-10-year high of 3.0% in August, we suspect that euro-zone inflation will rise even further in the coming months. But this is due to temporary forces that should fade next year, leaving headline and core inflation well below 2% by the end of 2022.
Jack Allen-Reynolds Senior Europe Economist
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European Economics Update

Omicron: implications for the euro-zone

It is still very early days in assessing the effects of the latest Covid variant, but we suspect that Omicron has the capacity to cause a new decline in economic activity in the coming months but that it will probably have a relatively small impact on inflation. Meanwhile, the variant means the ECB is even more likely to maintain some flexibility around its asset purchases beyond next March.

29 November 2021

European Data Response

Germany Flash Inflation (Nov.)

The increase in German inflation to 6% on the HICP measure was partly due to statistical quirks which should be reversed next month. But even the national CPI measure of inflation rose to 5.2%. However it is measured, inflation has now probably peaked and should fall back a long way next year.

29 November 2021

European Data Response

EC Survey (November)

Despite the slight deterioration on the month, November’s EC business and consumer survey showed that economic sentiment in the euro-zone was high before the recent news about the Omicron variant. It also confirmed that consumers’ and firms’ inflation expectations were extremely strong.

29 November 2021

More from Jack Allen-Reynolds

European Economics Update

Monetary Indicators Monitor (July)

Year-on-year money and lending growth has fallen sharply this year and we think it will decline further. With the subdued level of economic activity also weighing on consumer prices, we don’t think that money growth poses a significant upside risk to inflation.

26 August 2021

European Economics Update

Investment to make sizeable contribution to growth

Business surveys suggest that global supply problems are becoming a drag on euro-zone investment, but these problems should fade going into 2022. As long as the Delta variant doesn’t halt the economic recovery in its tracks, investment should make a sizeable contribution to GDP growth this year and next.

25 August 2021

European Data Response

Euro-zone Flash PMIs (Aug.)

August’s PMIs suggest that growth slowed only slightly despite persistent supply problems and activity approaching more normal levels. They also imply that price pressures are no longer intensifying, though they aren’t easing significantly either.

23 August 2021
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