Sticky inflation will potentially keep rates at between 2.5 per cent and 3.5 per cent.
Already a subscriber?After falling very nicely during the last few months of last year, progress on inflation in key economies has somewhat stalled, leading some experts to push expectations forIn the US, underlying measures of inflation have shown some signs of re-accelerating, and it’s likely the US inflation print for February will disappoint too.
UBS has estimated the longer-run outlook for European inflation to be between 0.3 and 0.5 per cent higher than pre-COVID. But central banks are acting cautiously, likely concerned about exacerbating a still-tight labour market.That’s why it is good for central banks to have something simple to point to as a reason they’re not in a rush to cut rates. This time around, it seems to be “services inflation”.Services inflation has also been flagged as part of the reason the European Central Bank “considers its inflation fight unfinished”.
Over that period, goods inflation almost always ran below the total , while services almost always ran above .
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