At face value the business surveys published this week suggest that euro-zone inflation may soon rise to around 4%. However, we think it is unlikely to get as high as this and, even if it does, will drop back again early next year. The run of positive economic data is set to continue next week with euro-zone retail sales and German industrial production for May, and final PMIs for June. The account of the last ECB monetary policy meeting may shed some light on the debate over when it will start to taper its asset purchases.
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