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Problems at the core

Mar 03, 2023

“If we don’t get clear signals that core inflation is going down, we will have to do more,” Belgium central bank chief and European Central Bank Governing Council member Pierre Wunsch told journalists in Brussels yesterday. Core inflation reached an all-time high in the Eurozone in February and currently shows no sign of easing. We believe pressure will remain to the upside especially when workers will ask for more wage increases ( for those whose salaries are not indexed yet ) in an environment where unemployment remains at a relatively low 6.7%. We believe the path to a 4% ECB deposit rate is now a definite possibility.

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