Quotes from Societe Generale Cross Asset Research:
-Euroarea headline inflation hit a new three-year peak of 3.0% in Q4
last year as higher energy prices continued to boost inflation.
Assuming oil prices do not breach their previous high, inflation is
set to drop sharply in 2013. Pressures from food prices are expected
to move to the upside, but there is little sign of much upward
pressure in either wages or service price inflation.
-However, given the weakness of activity, it is surprising that core
inflation does not fall more sharply. We attribute this to significant
nominal rigidity and pricing power, particularly on the side of
producers. Italian inflation for example has proved remarkably robust
despite the weakness of the economy, and we expect this to be a major
factor preventing euro area inflation from falling more sharply. As a
result, we still expect inflation to average 2.7% in 2012, with core
inflation averaging 1.5%.
No comments:
Post a Comment