Eurozone inflation: Not there yet – BNPP

Gizem Kara, Senior European Economist at BNP Paribas, expects to see another sizeable gain in the Eurozone’s headline HICP inflation rate for January, topping 1.5%, but mainly driven by favourable energy-price-related base effects.

Key Quotes

“December’s slight uptick in core inflation does not yet herald a new trend, in our view. Core inflation is likely to remain muted in Q1.”

“From Q2, core inflation should be nudged up by EUR weakness, commodity prices and inflation expectations. Germany and Spain are likely to feel it more than France and Italy.”