Nordea expects Eurozone inflation dynamics to stay persistent, with headline inflation projected above the ECB’s target at least until spring 2027. They see recent data as slightly weaker than the ECB’s June projections, partly due to soft food prices, but anticipate only modest downward revisions. Core inflation is projected to remain above 2% through 2028, supporting further ECB rate hikes.
Inflation seen persistent and above target
“Beyond energy, recent headline inflation data have come in slightly weaker than the ECB projected in June, partly because of weak food price inflation.”
“We therefore expect small downward revisions to the 2026 and 2027 headline inflation forecasts, although the adjustments are likely to be modest.”
“Inflation should nevertheless remain above the ECB’s target at least until spring 2027.”
“Core inflation developments have been broadly in line with the June projections, and we therefore expect the projected core inflation profile to remain largely unchanged.”
“This would imply that core inflation remains above 2% through the end of 2028, which, in our view, supports the case for further ECB rate hikes.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
