European Central Bank President Christine Lagarde pointed to the lack of “clear evidence” that underlying price growth is slowing.
The inflation underlying probably reached a new record from the era of Euro this month, a result likely to call into question the plans of government officials European Central Bank (ECB) concerned about the threats posed by banking turmoil. However, they believe that the headline inflation will show a deceleration.
The March data that will be published next Friday will show a increased acceleration in the so-called central indicator that eliminates volatile elements such as energy and food, the Bloomberg news agency anticipated when reflecting the analysis of different economists on the eurozonemade up of 20 European countries that use the euro as their currency.
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The average of 27 forecasts indicates a 5.7% increasewhat would be the faster pace since the euro was founded at the end of the 20th century. On the contrary, it is likely that the headline inflation show a drastic slowdownreflecting lower energy prices than the previous year.
The debates that the March indicators will bring
The report will further feed the discussion at the ECB about how far and how aggressively to pursue tightening monetary policyespecially since the financial turmoil also worries officials about the possible economic consequences.
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The rapid decline in headline inflationdriven by lower energy prices, is good news for household purchasing power,” Bloomberg Economics said in a report, but “it will do little to relieve concerns at the ECB about the upside risks for the medium-term inflation outlook”.
The president of the ECB, Christine Lagardearticulated those concerns last Wednesday, as noted the lack of “clear evidence” that underlying price growth is slowing, and domestic pressures pose a threat there.
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The next data could have even more extreme results, since among the highest forecasts for the basic indicator anticipate a jump of 0.5 percentage points to 6.1%.
Source: Ambito
