The MPC also highlighted the Bank’s view that the risks to the inflation outlook are on the upside, with food and administered prices – particularly oil prices – being among the biggest risks.
A higher GDP growth outcome in Q2 relative to our May projection will most probably compensate for the expected economic deceleration in the remainder of the year amid deteriorated global economic outlook and mounting recession pressures in the euro area. Nevertheless, we estimate that quarterly GDP growth rates will remain positive for the rest of the year.