Rising consumer demand in the euro zone is playing an increasing role in high inflation, a European Central Bank study showed on Friday, suggesting that, as some bank officials fear, price pressures are becoming more entrenched.
Inflation, which hit a record 10%, was initially driven by rising energy prices, against which monetary policy is largely powerless, but the role of this supply shock is now fading, the ECB said in a Bulletin article. Economic.
“In recent months, supply and demand factors have played broadly similar roles in (underlying) inflation,” the ECB said.
“More recently, the contributions of predominantly demand-driven components to services inflation have surpassed those of predominantly supply-driven components,” he added.
The general view is that inflation is close to its peak now, but the decline is expected to be slow initially, and a separate ECB survey indicated that consumers see rapid price growth in the coming years.
Inflation expectations for the next 12 months remained stable at 5%, while the median expectation for the three years ahead stood at 3%, the ECB’s Consumer Expectations Survey showed.
The bank is targeting inflation at 2%, but its projections show above-target price growth through at least 2024, and minutes from its September monetary policy meeting showed policymakers are now concerned about inflationary dynamics.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
