**As seen in Risk In The Week report 05/27/23, subscribe at cablefxm.co.uk/reports
April final consumer prices rose by 7.0% Y/y, this was unchanged from the prior and in line with the consensus forecast. The core metric accelerated by 5.6% Y/y, expectations were met as the figure eases from a record high. Food prices contributed with 2.5pp to the headline, this was lower than the prior 2.9pp, the metric advanced by 0.2% M/m. Energy prices decelerated by 0.8% M/m, services prices rose by 1.2% M/m, the core figure increased by 1.0% M/m. The super-core metric recorded a second consecutive month of slowdowns at 6.8% Y/y vs the prior 7.0% seen in March. Analysts at SEB warned for upside risks in upcoming inflation print, especially on services prices. Also, they noted that strong calendar effects are to be expected on the core metric. SEB sees headline prices rising by 6.1% Y/y and the core figure accelerating to 5.6%, the latter is above the consensus forecast. ABN Amro pointed at the rise in energy prices in April as a temporary development due to base effects, they see energy price inflation falling to below zero by 2H 2023. ABN Amro sees headline inflation below the core rate from the middle of the year, they forecast the former at around 2% and the latter at 3% by end of 2023. Economists at Nomura see headline prices moving back to the ECB’s target as soon as 2Q 2024, they forecast inflation at 1.5% by end of 2024.
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