Industry Voice: The Eurozone faces an inflation rollercoaster

Prices will likely rise next year—before picking up again

clock • 2 min read
Industry Voice: The Eurozone faces an inflation rollercoaster

Rising inflation in the eurozone likely has longer to run, but we don't believe it is permanent.

Although the eurozone consumer price index (CPI) was expected to hit 1.6% in April—its highest level in two years—spare capacity in the labour market should contribute to its decline again in 2022 once the impact of one‑off factors diminishes.

Depending on the outcomes of European elections over the next 12 months, large rises in minimum wages, and the cost of brown energy, eurozone inflation could rise again significantly in 2023. Investors may wish to take this inflation rollercoaster into account when planning their medium- to long-term bond strategies.

 

 

 

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