Almost four-fifths of items in the consumption basket had annual price increases above 2% in April, and this is not only a reflection of high import prices. A new ECB indicator of domestic inflation – which removes items with a high import content – currently stands above 3%.
[4] In this environment, it is important to understand how persistent domestic price pressures are likely to become. There are several factors worth considering here. First, inflation is starting to take root in the services sector, which is the “stickiest” component of inflation and has a higher weight than goods.