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📝 Expect Europe Inflation to Decelerate In Coming Months: Natixis

All in all, food prices have had a significant impact on inflation in 2022 explaining 1.9 point of inflation in 2022 out of 8.4%.

In the coming months, we expect inflation to decelerate thanks to the lowering of energy prices and more over to the lowering of their contribution due to a positive base effect. Additionally, the tensions in value chains due to the shortages of intermediary goods seems to continue to dissipate gradually. Finally, the tightening of monetary conditions by the main central banks across developed economies should result in a softening of demand.

We believe that the ECB will continue to tighten monetary

conditions with the aim to reach its inflation target by the end of 2024. Thus, it should continue to increase its key interest rates until this summer. Now we expect a deposit rate at 3.50% by June 2023.

- Natixis



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