(CercleFinance.com) – Reacting to the slowdown in annual inflation in the euro zone in March, to 6.9% after 8.5% the previous month, economists generally do not see any reason to radically change the position of the ECB on its monetary policy in the coming months.
‘This fall is entirely due to a fall in energy inflation’, points out Capital Economics, specifying that the underlying inflation rate (excluding energy, food, alcohol and tobacco) has on the contrary reached a new record of 5, 7%, after 5.6% in February.
Also pointing to a tight eurozone labor market, with the unemployment rate remaining unchanged at 6.6% in February, the London office expects the ECB to ‘continue to raise interest rates, bringing its deposit rate at a high of 4%.
For his part, senior economist at Deutsche Bank Peter Sidorov said he expects underlying inflation in the euro zone to remain “uncomfortably high, in the range of 5.5 to 6%, in the spring and in the summer’.
According to him, this should lead to “continuous, albeit slower” key rate hikes from the Frankfurt monetary institution, “over the next few months as long as market conditions remain orderly”.
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