In the aftermath of the announcement of an interest rate hike of another 50 basis points starting next March, in its latest bulletin – released today – the European Central Bank confirms the difficult moment of the EU economy.
Even though the cost of energy – which has skyrocketed following the Russian invasion of Ukraine – is now declining, " price pressures remain intense, in part because high energy costs are spreading throughout the economy". , the document reads, "inflation excluding energy and food remained at 5.2 per cent in January".
Grocery shopping will continue to be expensive for European citizens, because the high energy price continues to weigh on foodstuffs : «The food component of inflation recorded a further increase, reaching 14.1 per cent, since the previous rise in the the cost of energy and other inputs for the production of food is still being passed on to consumer prices», the ECB continues.
However, some positive glimmers can be glimpsed: according to the analysis of the experts of the European Central Bank, «if the recent drop in energy prices were to persist, the decrease in inflation could be faster than expected. These downward pressures on the energy component could then also translate into a more contained trend in core inflation».
What is certain is that rates will continue to increase steadily in the near future, with the aim of returning to 2% inflation in the medium term .
(Unioneonline/F)