- Prior +2.7%
- HICP +2.9% vs +3.1% y/y expected
- Prior +2.8%
- Core CPI Y/Y +2.3% vs +2.5% prior
- Full report here
We've got lower than expected figures here but they won't change anything for the ECB as the central bank has already pre-committed to a rate hold at this week's meeting as they gather more data ahead of the June meeting.
The good news is that core inflation is expected to ease to 2.3% in April, which is lower than the 2.5% seen in March. The bad news is that a prolonged US-Iran stalemate and Strait of Hormuz closure eventually could seep into higher core inflation going forward.
The ECB cares more about inflation expectations at the moment as the spike in inflation is expected to be accompanied by lower economic activity.
They certainly hope for this situation to be over by the next meeting so they can hold rates steady for a little longer and gather more data over the summer before considering a rate adjustment in September. But if this drags on much longer, they might feel forced to deliver a rate hike in June and that could exacerbate the slowdown in the economic activity.
