The latest core inflation data suggest that ECB policymakers will be forced to cut interest rates sooner than they currently think. Meanwhile, the EU has agreed new budget rules, but we suspect that it will ultimately be up to the market to impose fiscal discipline on European governments. The key data release in the coming weeks will be December’s euro-zone inflation figures, which are likely to show a jump in the headline rate but a further fall in core.
Note: This will be the last Europe Economics Weekly for 2023. The next Weekly will be sent on Friday 5th January 2024.
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