**As seen in Macro Walk report 07/28/23, subscribe at cablefxm.co.uk/reports
Eurozone consumer prices eased to 5.5% Y/y from the prior 6.1%, the June consensus forecast matched the release. The core metric rose to 5.5% Y/y from the prior 5.4%, the figure was above the market expectation of 5.4% and goes to prove sticky inflation over the summer. On the month, consumer prices excluding energy accelerated by 0.4%, food prices rose 0.3%, energy fell by 0.7%, and services prices ticked higher by 0.6%. An interesting development was recorded in EU services prices as the component rose by 5.4% Y/y, the fastest pace on record. We remind you that the ECB expects headline prices to decline to 5.4% in 2023 and 3.0% next year, the latter compares to economists’ median projection of 2.5% by 2024. The desk at SEB said it expects a continuation of the modest downtrend in core CPI given German and French data prints. SEB reminded us that July has a strong seasonal pattern for services prices, this is likely to keep the ECB on check, however, the central bank will see PMI data and another inflation print before deciding on monetary policy again. Economists at UBS noted that the ECB left its 2025 CPI projection above 2% in July, they added that this will probably keep the central bank with no choice but to hike rates again.
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