ECB at the brink of changing its inflation assessment? (report)

ECB at the brink of changing its inflation assessment?

At the end of May we published our first KBC (19,03 EUR, -3,43%) Flash on inflation and inflation expectations. Since then, the ECB decided to raise rates once more by 25 basis points in order to keep inflation and inflationary pressures in check, in line with their goal of keeping inflation below but close to 2%. Next (2359,29 GBp, 0,08%) week, the ECB will meet again to decide on rates and the bank will also update its staff forecasts. Ahead of this meeting we will take a closer look at the latest developments in inflation and inflation expectations. A more detailed preview on the next ECB meeting will be available a few days before the meeting.

Headline and core inflation: peak behind us?

After reaching a peak in April at 2.8% Y/Y, inflationary pressures seem to have eased somewhat, partly due to the lower oil price. Oil prices peaked around $125/barrel in the course of April, due to heightened tensions in the Middle East. Since then, the oil price dropped, but remains rather elevated, fluctuating between $105-$120/barrel, especially as global economic growth eased and expectations for the coming quarters remain weak. Recently also lower prices for food and seasonal food contributed to the decline in the headline figure...

Full report in pdf version available at Research site.