Free Trial

MNI BRIEF: ECB Can't Rule Out Temporary Inflation Spike In '21

(MNI) London

Eurozone inflation could surprise to the upside at some point in 2021, but a temporary spike should not be mistaken for a sustained increase and inflation was likely to remain below target for the foreseeable future, an account of the European Central Bank's January meeting showed.

The odds of very low inflation have decreased, Governing Council members said, but the medium-term outlook for prices was surrounded by a high level of uncertainty, given the unprecedented pandemic situation and long-standing questions about changes in the underlying determinants of inflation. Adding to the uncertainty, weightings in the eurozone's harmonised inflation index were set to change substantially this year, due to changes in consumption patterns during the pandemic.

Meanwhile, underlying price pressures were expected to remain muted owing to weak demand, the account showed. Headline inflation was only expected to hit 1.7% in five years, according to a Survey of Professional Forecasters estimate cited in the account.




MNI London Bureau | +44 203-865-3829 | jason.webb@marketnews.com
MNI London Bureau | +44 203-865-3829 | jason.webb@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.