ECB Bulletin Downplays Importance of Core Inflation Measure

ECB Bulletin Downplays Importance of Core Inflation Measure

The European Central Bank (ECB) monthly bulletin releases today showed the bank feels Harmonized Index of Consumer Prices (HICP) ex-energy or core HICP is not an ‘ideal’ measure of underlying inflation.

Key points

Can extend medium-term inflation horizon

Medium-term horizon cannot be extended indefinitely

Economic recovery is projected to strengthen but global developments are weighing on the short-term outlook

Export orders and sentiment indicators point to subdued global trade developments in the near term

Consolidation efforts are needed to set public debt ratios firmly on a downward path

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