2023-07-19 14:44:00
Hoy 11:44
Core inflation in the euro area, the key measure on the iprice increases of the European Central Bank, accelerated in June more than initially reportedconsolidating the widely expected interest rate hike for the coming week.
Los Core consumer prices, which exclude volatile items such as food and energy, rose 5.5% from a year earlier, Eurostat said on Wednesday. That compares with a preliminary estimate of 5.4% and a reading of 5.3% in May.
The European Central Bank would raise rates to a maximum of 4% in September
The headline inflation rate was confirmed at 5.5%, the lowest level since before Russia invaded Ukraine. Economists surveyed by Bloomberg expect core price increases to exceed the full figure through the end of 2024.
Given the headline inflation has now nearly halved from its peak of 10.6% in October, central bankers have shifted focus to the more specific indicator, which is proving more persistent. While Wednesday’s upward revision could provide ammunition for dovish ECB members interested in seeing rate hikes continue through the fall, some have recently taken a softer tone.
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The head of the Dutch central bank, Klaas Knot said on Tuesday that core inflation appears to have “stabilized” and noted that any action beyond July would be “a possibility, but by no means a certainty.” ECB Vice President Luis de Guindos had previously shown some optimism that core inflation may be peaking.
Communication will be key for the ECB after the July 26-27 meeting. People familiar with the Governing Council’s thinking told Bloomberg that the biggest challenge will be striking the right tone in conveying its future intentions.
Translated by Pauline Steffens.
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