January 10, 2022
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FLASH: Norway inflation in December-21

NO CPI 5.31 % (vs 4.80 %)

January 10, 2022
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EA: UR beating the fresh hawks

  • The EA cycle is performing surprisingly well in absolute and even relative terms, with a record pace and consistency of decline in its unemployment rate. Its change since 4Q19 is much nearer to Norway than the UK and US, let alone languishing Sweden.
  • High vacancies match the recovery, implying it is demand-led. Further sustained progress in ending ingrained disinflationary expectations should allow the ECB to focus more on this cyclical story. The ECB may not wait long in 2023 before hiking.

By Philip Rush

January 07, 2022
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EA: inflation jumps at the Dec-21 summit

  • Flash EA HICP inflation once again exceeded our slightly above-consensus forecast in Dec-21 by rising 10bps to 4.97%. There was also a repeat of the upside pressure’s breadth across countries and types that infected the “core” with a 14bps surprise.
  • Jumping beyond what we had expected to be the peak does not change our view that it will slow sharply in Jan-22. Some normalisation in seasonal weightings and a VAT base effect ensure it. Nonetheless, the trend in surprises is uncomfortable for the ECB.

By Philip Rush