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MNI BRIEF: Sticky Services Inflation Might Be Structural - ECB

MNI (LONDON) - Services inflation in the euro area “might be driven by several structural factors”, including global labour shortages and shifts in preferences towards leisure, which justify caution in its outlook, according to the accounts of the European Central Bank’s September policy meeting, released on Thursday.

The Governing Council discussed the issue, revealing differences within the eurosystem on the balance of risks. Some members highlighted weaker growth and potential risks of undershooting, while others noted scenarios “in which it might be necessary to suspend the cutting cycle for a while, perhaps due to a structural decline in activity or other factors leading to higher-than-expected core inflation.”

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MNI (LONDON) - Services inflation in the euro area “might be driven by several structural factors”, including global labour shortages and shifts in preferences towards leisure, which justify caution in its outlook, according to the accounts of the European Central Bank’s September policy meeting, released on Thursday.

The Governing Council discussed the issue, revealing differences within the eurosystem on the balance of risks. Some members highlighted weaker growth and potential risks of undershooting, while others noted scenarios “in which it might be necessary to suspend the cutting cycle for a while, perhaps due to a structural decline in activity or other factors leading to higher-than-expected core inflation.”

Keep reading...Show less