Monday, August 4, 2025

Latest

EU Core Inflation Continues to Hit Record-Highs, Policy Makers Prepare for More Rate Hikes

Although inflation across the EU slumped into single digits last month, core inflation remains stubbornly resilient, cementing the case for further hawkish intervention by the European Central Bank.

Latest flash estimates from Eurostat show headline inflation is forecast to drop from an annualized 10.1% to 9.2% in December, thanks to an unsuspected drop in energy prices amid unseasonably warmer weather. However, core inflation, which doesn’t account for food and energy components, jumped to a record-high of 5.2% last month, prompting economists to sound the alarm over a potential continuation of the ECB’s restrictive monetary policies throughout 2023.

“The ECB is likely to stick to its hawkish rhetoric in the near term despite the big falls— and likelihood of further sharp declines this year,” Capital Economics senior economist Franziska Palma said to the Financial Times. The ECB last year aggressively hiked borrowing costs from negative 0.5% to 2% within a span of six months. Similarly, ING economist Carsten Brzeski recently told Bloomberg that Europe’s central bank will likely remain on the path of rate hikes well into the second quarter, as policy makers shift “focus away from headline inflation to core inflation and wage growth.”

ECB president Christine Lagarde even hinted at more forthcoming economic pain, warning against focusing on short-term fluctuations in headline inflation, as the succeeding months are expected to bring additional price spikes. “It may well be that the December number… will be a little bit lower. But we have good reasons to believe that January and February, for instance, are likely to be higher. So we cannot be fixated on one single number.” Current ECB forecasts suggest inflation will average 6.3% by the end of 2023, well above the bank’s 2% target rate.


Information for this briefing was found via Eurostat, the ECB, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

San Dimas: First Majestic Silver’s Sleeper Asset

New Gold Q2 Earnings: Record Free Cash Flow

STLLR Gold: The Tower Gold PEA

Recommended

Tsunami Warnings Spread As Largest Quake Since 2011 Hits Russia

Northern Superior Intersects 1.75 g/t Gold Over 65.0 Metres At Philibert

Related News

US Mortgage Lenders Are Going Belly Up, Is It Going To Be Like 2008?

With the current situation of the real estate market, it’s not surprising that market watchers...

Tuesday, August 30, 2022, 01:33:00 PM

US Unemployment Rate Dips to 3.6% in June

Latest data from the Bureau of Labour Statistics shows that job creation in the US...

Friday, July 7, 2023, 08:51:20 AM

Global Energy Crisis Continues To Grow; May Not Be Too Late for Investors to Increase Their Exposure to Energy Plays

The global energy crisis seems to grow more acute each day, and the effects of...

Wednesday, October 13, 2021, 03:39:00 PM

Australia’s Central Bank Breaks Hawkish Tightening Cycle as Mortgage Rates Bite Debt-Laden Consumers

Australia’s central bank has become the first among developed economies to downshift its rapid tightening...

Tuesday, October 4, 2022, 05:54:37 PM

Bank Of Canada Unexpectedly Hikes Key Rate By Full Percentage Point

In a surprising turn of events, the Bank of Canada decided to raise its interest...

Wednesday, July 13, 2022, 11:44:00 AM