Eurozone: Inflation can be expected to be higher – Natixis


Analysts at Natixis believe it is very likely that inflation will be higher in the eurozone after the coronavirus crisis than it would have been without the crisis

Key quotes 

“Wage demands will have to be met (in healthcare, retail, transport, security, etc.), so there will be some wage inflation.”

“The onshoring back to the eurozone of strategic production that currently takes place in low-labour-cost emerging countries will increase inflation.”

“The destruction of production capacity during the crisis due to inevitable bankruptcies, despite the efforts of governments, means higher inflation.”

“The yield curve will steepen, with short-term interest rates remaining low and long-term interest rates rising.”

 

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