Already High, Euro Area Inflation is Revised Up

April 16, 2008

By Robert Brusca

· Euro Area inflation was revised higher in March and now is expanding at a 3.6% annual rate, not quite as fast as the universe, but fast enough to create a gnashing of teeth at the ECB. Yesterday, Juergen Stark of the ECB said that current policy may not be enough to hold medium term prices stability in line. Among the four largest EMU economies, core inflation is over the 2% inflation ceiling, ranging from a 2.4% yr/yr pace in Germany to a 3.5% pace in Spain. France an Italy are seeing their respective core inflation rates accelerated from 12 months, to 6 months to, 3 months. Now those are not good trends at all. Germany’s core inflation acceleration broke off from six months to three months, as the three month rate has dropped back to 1.9%. In Spain the three month rate fell back to 3.1% from 4.2% over six months. 

· Within EMU as a whole core inflation is still accelerating, with the 3-month pace up to 3.4%.

 

Trends in HICP
 

% mo/mo

% saar
 

Mar-08

Feb-08

Jan-08

3-Mo

6-Mo

12-Mo

Yr Ago

EMU-13

0.5%

0.3%

0.3%

4.1%

4.8%

3.6%

2.0%

Core

0.4%

0.3%

0.1%

3.4%

3.3%

2.7%

1.9%

Goods

1.4%

0.3%

-0.5%

4.5%

6.1%

4.1%

1.7%

Services

0.4%

0.5%

-0.2%

2.8%

3.0%

2.8%

2.4%

HICP

              

Germany

0.4%

0.3%

0.3%

3.8%

3.9%

3.3%

2.1%

France

0.5%

0.0%

0.3%

3.5%

4.8%

3.5%

1.2%

Italy

0.6%

0.6%

0.1%

5.0%

5.2%

3.6%

2.1%

Spain

0.4%

0.4%

0.2%

4.1%

6.2%

4.6%

2.5%

Core excl Food, Energy and Alcohol

              

Germany

0.4%

0.3%

-0.2%

1.9%

2.5%

2.4%

1.7%

France

0.4%

0.1%

0.3%

3.2%

3.1%

2.5%

1.3%

Italy

0.7%

0.4%

0.0%

4.3%

4.1%

2.9%

2.0%

Spain

0.3%

0.3%

0.2%

3.1%

4.2%

3.5%

2.5%

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