The indirect effects of higher energy prices on inflation have so far been absent, but they could start to emerge in the second half of the year if energy prices remain high or rise further. That could push the ECB towards rate hikes even if second-round effects on wage growth remain very limited as we expect.
We’ll be discussing the outlook for BoE, Fed and ECB policy in a 20-minute online briefing at 3pm on Thursday 30th July. (Register here.)
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