Eurozone Inflation Update: August Continues the Slowdown – What to Expect from the ECB’s Monetary Policy

2023-09-01 20:45:48

August 31, 2023 Today at 06:00

The slowdown in inflation should have continued in August. What will allow the ECB to slow down in terms of monetary policy? Not sure.

L’inflation did she continue her slow – but inexorable? – slowdown in the euro zone during the month of August? A majority of economists believe in it in any case. According to data compiled by Bloomberg, experts on average expect a further drop in the consumer price index this month, at 5.1% once morest 5.3% in July and 5.5% in June. He would thus find its January 2022 level.

5,1%

According to Bloomberg, economists on average expect euro zone inflation to have fallen to 5.1% this month. Against 5.3% in July.

L’core inflation, i.e. which does not take into account highly volatile prices such as food, energy, tobacco and alcohol – would (finally!) follow the same trend following stabilizing at 5, 5% for two months. Economists expect a slowdown to 5.3%. Some say the peak is behind us.

It is therefore with optimism that investors will follow the publication by Eurostat of the preliminary figures on inflation on Thursday at 11 am. We bet, however, that this good news will not prevent the European Central Bank (ECB) from maintaining a restrictive monetary policy in the short/medium term. Its president, Christine Lagarde, was also clear on this subject during her speech delivered in Jackson Hole last week: “Although progress has been made, the fight once morest inflation is not yet won.”

The recent rebound in oil prices risk of giving arguments to the “hawks” (supporters of a restrictive monetary policy). An additional increase in the key rates of the ECB at the end of its meeting on September 14 remains probable at this stage.

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