Stubborn inflation and an ECB that continues its hawkish policy are only the peculiarities of these first months of 2024. The markets expected more enterprising moves from the European Central Bank, already in the first months of the year, which did not happen . According to Martin van Vliet, Global macro strategist at Robeco, there are two scenarios on the horizon. The optimistic one sees “an easing of 50 basis points in the second quarter (when two meetings will be held, i.e. in April and June). This premise is based on the hypothesis that economic stagnation in the Eurozone and disinflation (we assume that the annual core inflation rate, which in January was 3.3%, will be around 2.5% in April) will be in progress”. The most pessimistic scenario instead sees a prudent ECB which prefers to wait for wage agreements in the spring before moving on rates. This means that “in the 2nd quarter we could only be talking about 25 basis points”. The main reason for the delay appears to be that the ECB is worried about starting the decline too early. After not having seen the arrival of inflation in the summer of 2021 and having minimized its extent between November and December, Christine Lagarde, President of the ECB, is on the defensive, hoping that this move will not excessively damage the European and Italian economies , already proven by years of high rates and unmanageable prices.
Inflation: difficult descent
Inflation in Italy has risen slightly compared to December but we continue to remain one of the European countries with the lowest value. The latest Istat data have in fact confirmed a national index of consumer prices, including tobacco, which recorded an increase of 0.3% on a monthly basis and 0.8% on an annual basis. The acceleration is mainly due to the dynamics of the prices of transport-related services (from +3.7% to +4.2%), of unprocessed food goods (from +7.0% to +7.5%) and to the easing of the decline in the prices of regulated energy goods (from -41.6% to -20.6%). A positive aspect is the further slowdown in underlying inflation, which fell from +3.1 to +2.7%. The cost of the shopping cart was also positive, going from +5.4 to +5.1%. Italy and Denmark, at a European level, are the countries that have recorded the lowest rates. Annual inflation in the euro area in fact stood at 2.8% in January 2024, down compared to 2.9% in December, while in the EU it was 3.1% in January 2024, down compared to 3.4% in December.
Data which suggests a path towards easing inflation in the coming months. Of course, geopolitical tensions make the downhill path more difficult, but the road is marked, as is that of the ECB's rate cut.
