Euro zone core inflation unlikely to ease before autumn

On April 18th, Wagner, a senior economist at Commerzbank, said in a report that the core inflation rate in the euro zone may remain above 5% until the autumn. He said there were growing signs that inflation in industrial goods and food had eased, but that price pressures remained strong in the services sector as wages rose sharply. Wagner said: “The doves on the ECB Governing Council fundamentally support loose monetary policy, and they will take advantage of any signs of weakening inflationary pressures to end the rate hike cycle as soon as possible. We expect the ECB to increase rates in May and June.” The interest rate will be increased twice by 25 basis points, and then the deposit rate will reach 3.5%.