Euro area: Inflation overshoot extends ECB hiking path – Societe Generale
Societe Generale economists Anatoli Annenkov, Michel Martinez and colleagues expect Euro area inflation to stay above target beyond 2027, with headline inflation projected to peak near 3.7-3.8% and core around 2.7-2.8%.
Eurozone inflation is likely to surpass the central bank's target well into next year, according to Societe Generale economists. Headline inflation is projected to peak near 3.7-3.8% by early 2027, while core inflation may reach 2.7-2.8% by mid-2027. The European Central Bank is expected to raise interest rates this week and again in December, as rising energy prices and resilient economic activity delay price stability.
Factors such as strong global AI demand, transportation and food supply disruptions, and the upcoming El Niño phenomenon are contributing to the persistent upward pressure on inflation.
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