Eurozone: No surprises in inflation numbers – Nordea Markets


Anders Svendsen, analyst at Nordea Markets, points out that the Eurozone’s final HICP figures confirmed flash estimates of headline inflation at 1.4% y/y and core inflation at 1.1% y/y in January despite quite big revisions to the German index numbers.

Key Quotes

“German CPI was revised and rebased (new base year 2015 = 100, previously: 2010 = 100). The revision included a new methodology around package holidays to better reflect the seasonality of package holiday prices. This implied a recalculation of historical CPI and HICP back to 2015 using the new methodology. As a consequence, also the Euro-area HICP was recalculated, given the revised German HICP.”

“Our estimate of supercore inflation – the part of core inflation that is responsive to the business cycle – remained unchanged at 1.4% y/y while the rest of core picked up marginally to 0.7% y/y.”

“Looking ahead, we expect supercore inflation to continue rising during the year in a lagged response to rising wage growth. This should take core inflation very gradually towards 1.5% y/y towards the end of the year.”

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