Core inflation increased from the previous month and will be a cause for concern for the central bank.
20 July 2023
Eurozone inflation remained above forecasts in June, with both headline and core inflation rising 5.5% over the year. The core inflation rate is the print bucking the trend in the headline rate (given energy prices have decelerated hugely) and has increased from the 5.3% reading seen the month before. A high headline core measure will keep pressure on the European Central Bank (ECB) to maintain hawkish standards. Despite more recent dovish comments from members of the governing council at the ECB that they see their battle with inflation peaking, the core reading is now where their focus has turned. If it keeps ticking higher (as is the recent case) then their dovish language is nothing more than hot air.
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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.