Eurozone: Inflation numbers flying high – HSBC

Fabio Balboni, European Economist at HSBC, notes that the Eurozone inflation came in stronger than market expected, rising back to 1.9% in April (consensus: 1.8%), from 1.5% y-o-y in March while the core inflation was also stronger, at 1.2%, and services inflation shot up to 1.8%, its highest since March 2013.

Key Quotes

“The timing of Easter is causing some of the volatility and from now on we should see a clearer picture. We expect inflation to ease again over the next couple of months and stabilise around 1.6-1.7% in the second half of the year. Against this background, although pressure for tapering might intensify after latest print, we don't expect any changes in QE and key policy interest rates.”