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Tag Archives: core euro inflation

Drop in euro area inflation amplified by statistical distortions

Euro area headline inflation declined by a larger margin than expected. Our main explanation is related to statistical effects.Euro area headline inflation declined for the first time in almost a year, by a larger margin than expected by the consensus. Headline HICP eased to 1.5% in March, from 2.0% in February, while core HICP inflation (excluding energy, food, alcohol and tobacco) dropped to a two-year low of 0.67% y-o-y, from 0.86% in February. The harmonised inflation rate dropped by...

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ECB fine tunes communication as recovery broadens

A generally more optimistic ECB looks set to announce its roadmap for QE tapering in September. QE tapering itself may start in Q1 2018.The ECB delivered a fairly balanced, albeit more optimistic message at today’s press conference, echoing upward revisions to the staff projections for 2017-18 euro area GDP growth and inflation. Crucially, however, the 2019 projection for inflation was left unchanged at 1.7%.Looking ahead, the ECB’s four inflation criteria are unlikely to be fully met before...

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