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