April 16, 2021
- EA HICP inflation for Mar-21 was confirmed at 1.3% y-o-y while the ex-tobacco index was marginally weaker than expected at 106.09 (Heteronomics: 106.12) for 1.26% y-o-y. Clothing was softer with transport and housing offsetting, mostly owing to Italy changes.
- The headline rate is set to rise further from base effects over the next two months before slumping in July. A likely rise above target in the Autumn should be fleeting as underlying inflation provides a soggy bottom rather than a firm foundation.
April 14, 2021
- The current Covid19 crisis is an opportunity for the EU to force the door open a little further towards sharing debt - the Hamiltonian moment.
- However, the attitude of any new German administration to further fiscal entanglement with southern Europe is unclear. We believe the doom loop has yet to be extinguished.
March 31, 2021
- Flash HICP inflation rebounded by 40bps to 1.3% in Mar-21. That outcome was 14bps less than we expected, mostly caused by Italy and France to a lesser extent, while Spain provided a partial positive offset. Our forecast is now 0.1pp lower for the year ahead.