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CPI Expected to Accelerate to 25.2% y/y (0730 GMT/0830 CET)

CPI is expected to accelerate slightly to 25.2% y/y (Prior: 24.5% y/y), while the monthly figure is seen unchanged at 1.9%. This is the first inflation print of the year, and the acceleration is likely to be driven by year-start repricing of food and services, as well as the continued effect of the removal of the fuel price cap late last year
  • Goldman see inflation accelerating in line with the consensus forecast, with the main driver of the increase the remaining pass-through of higher transport fuel prices following the removal of the price cap. They estimate that the effects of this were only partly reflected in the December inflation release, with the remaining gap worth around 0.5pp higher headline inflation in January. Goods and services repricing as well as the effects of the minimum wage increase pose additional risks.
  • Elsewhere, UniCredit believe that broad-based pressure on consumer prices persisted at the start of 2023, with only fuel-price inflation slowing in annual terms. They expect inflation to remain in double digits until the end of the year. ING see inflation moving above 25% y/y, but say price changes in household energy and durable goods will limit the upside in the acceleration.
  • Data released earlier this week was mixed. Retail sales data disappointed (-3.9% y/y vs. +0.2% expected) while industrial output surprised to the upside (+5.7% y/y vs. -0.5% expected). At their previous meeting, the NBH unexpectedly increased the required reserve ratio to 10% from 5%, making for a modestly hawkish rate decision despite no change to headline policy. The NBH meet next on Feb 28, with GDP data and unemployment rate figures on the docket in the interim.

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