It is true that the trend is upward, but unfortunately for the proponents of stagflation and fortunately for us, inflation is far from a double-digit inflation. Inflation expectations are well-anchored. Our last Inflation Expectations Survey brought it out very well – there is a majority of people who believe that inflation will remain within the range of 5 to 8 percent.
According to the flash estimate, annual euro area headline inflation stood at 1.2% in April, while HICP inflation excluding food and energy declined to 0.7%, slightly lower than expected. This negative surprise in core inflation is mainly attributable to a decrease in services inflation, which is likely to be related to developments in volatile items, also reflecting the timing of Easter this year.