- Prior +5.0%
- Core CPI +2.3% vs +1.9% y/y expected
- Prior +2.6%
That's a big blow to the ECB as euro area inflation unexpectedly hits a new record high, defying expectations. Soaring energy prices continue to drive up inflation mostly but food prices also surged to start the year. Meanwhile, services and industrial goods inflation continue to remain uncomfortably high.
The only plus point is that core inflation is seen easing slightly but remains above the ECB's 2% target and was a beat on estimates by quite some margin.
Adding to some context on the headline reading, that's the largest upside surprise in the history of the HICP release. Ouch.
I don't expect this to change the tone going into the ECB meeting tomorrow but surely if this keeps up, there has to be a change in the narrative down the road.
