Inflation, inflation, everywhere
- Consumer price inflation seems to dominate the calendar today – a fascinating topic, of course, which would prove a worthy topic for an international bestselling economic book. The Euro area is first (final CPI) – with the stronger Euro having some depressing impact on commodity prices.
- US inflation is probably worth more attention. Core inflation is above its 20 year average. Most prices are rising faster than their long term averages. We should be wary about being seduced into complacency by lower oil prices.
- Critically, inflation data in the Euro area and the US also tends to be revised higher. The two years of negative inflation surprises in the US from 2012 to 2014 turned out to be dodgy data, which were completely revised away (economist were right all along).
- Away from inflation we have the Bank of England pronouncement and minutes. No change in rates is expected, but the minutes will be looked to as an assessment of the balance of risks around the issue of the UK referendum.