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MNI BRIEF: EZ Inflation Seen Below 6% But Core More Persistent


Headline inflation could fall below 6% in the eurozone in coming months although core inflation is expected to be more persistent, European Central Bank Vice-President Luis de Guindos told in an event in Madrid Friday.

There has been a shift in the inflation story across the euro area and other factors are now set to be more important in the underlying price pressures, wages or the fiscal policy, he said. The ECB will watch closely how both services and industrial non-energy inflation -- “the hard core of inflation” -- and policymakers must avoid an inflation 'M-shape'; “That would badly harm our credibility” if inflation rises again, he said.

De Guindos said financial markets are underestimating inflation persistence and ECB’s commitment to get prices back to target, but praised their adaptive nature. “For us markets expectations are important but we (also) have our projections,” he added.

MNI Rome Bureau | +34-672-478-840 |
MNI Rome Bureau | +34-672-478-840 |

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