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Germany Flash Inflation (December)

Germany’s HICP inflation rate fell to 5.7% in December and is now past its peak, but the national CPI measure, which is arguably a better indicator at the moment, rose slightly. Looking ahead, we expect Germany’s inflation rate to fall further this year, but to remain uncomfortably far above 2%.
Andrew Kenningham Chief Europe Economist
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European Data Response

Germany and Spain Flash Inflation (Jun.)

The fall in inflation in Germany and the increase in Spain in June largely reflect temporary factors and will not alter the consensus view at the ECB that interest rates need to be increased quite rapidly.

29 June 2022

European Data Response

EC Survey (June)

The decline in EC Economic Sentiment Indicator in June was not as bad as we had feared and paints a more upbeat picture than the PMIs published last week. Nevertheless, the survey also pointed to inflationary pressures remaining strong, which is likely to weigh on demand and sentiment further ahead.

29 June 2022

European Economics Update

Domestic price pressures in the euro-zone are strong

High inflation in the euro-zone isn’t all down to energy prices and global demand-supply imbalances. Domestic price pressures are also very strong, bolstering the case for tighter monetary policy.

28 June 2022

More from Andrew Kenningham

European Economics Update

Key calls for the euro-zone in 2022

We think euro-zone GDP growth will be lower than most anticipate this year, at around 3.5%, while inflation will come down towards 2% by year-end allowing the ECB to leave interest rates unchanged and continue net asset purchases. The big risk is that inflation is higher for longer than we forecast.

5 January 2022

European Economics Update

Surge in gas prices will keep inflation higher

This year’s surge in natural gas prices means that HICP inflation may be up to one percentage point higher next year than it would otherwise have been. However, aggregate energy inflation is still likely to come down during 2022, because transport fuel inflation will fall very sharply.

22 December 2021

European Economics Weekly

ECB slightly more hawkish than expected

Following a the ECB’s slightly hawkish policy shift this week, we have penciled in a rate hike for 2024 and think the chance of a 2023 lift-off has risen. The big picture, though, is that the ECB will stick to negative rates for a long while yet and that the ECB’s policy will diverge sharply from that of the Fed next year. Meanwhile, although we wish all our clients a happy holiday period, it looks as if the coronavirus will once again dampen festive spirits as well as retail and hospitality spending... – This will be the last Economics Weekly for 2021. The next Weekly will be sent on Friday 7th Jan. 2022 –

17 December 2021
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