FXstreet.com (Barcelona) - The volatility in energy prices continues to dominate movements in headline inflation, as measured by the CPI. “At the start of this year, we had forecast a 2.7% year-over-year headline CPI rate in December 2012, however we scaled that back to as low as 1.9% in the summer as commodity prices tumbled and we have recently pushed up our forecast to 2.3%.” writes US Economist Omair Sharif at RBS.
According to Sharif, “The rise is largely due to a base effect; in other words, gasoline futures point to an easing in retail fuel costs through year-end, and seasonal declines in energy will likely dominate the NSA changes, though the drops should be less dramatic than seen in Q4 2011, thus putting upward pressure on the headline rate.”
In any case, “for 2013, we see more of the same, with headline inflation ending the year at 2.2% and the core rate about 1.9%.” he predicts.
According to Sharif, “The rise is largely due to a base effect; in other words, gasoline futures point to an easing in retail fuel costs through year-end, and seasonal declines in energy will likely dominate the NSA changes, though the drops should be less dramatic than seen in Q4 2011, thus putting upward pressure on the headline rate.”
In any case, “for 2013, we see more of the same, with headline inflation ending the year at 2.2% and the core rate about 1.9%.” he predicts.
