Commenting on the Eurozone CPI data, Commerzbank analyst, Christoph Weil said the inflation rate will continue to rise sharply in the coming few months. Further, the oil market bubble burst will trigger a slump in oil prices of around 70% between July 2008 and the start of 2009.
Inflation will reach 1% again towards the end of the year. High surplus capacities limit companies' pricing scope, while the notable rise in unemployment will curb pay momentum. Commerzbank forecasts a core inflation rate of 0.5% in the autumn of 2010.
These factors give the ECB ample room to delay its monetary policy reversal for a while longer. Weil sees no rate hike in the current year despite the emerging strong growth in the second half of 2009.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.