Consensus Forecast Underplays Euro-Area Inflation Outlook

(Bloomberg) -- Euro-area inflation already touched 2 percent in June and Bloomberg Economics expects the headline measure to exceed the consensus forecast over the summer, with higher oil prices pushing the rate higher in the coming months. For the European Central Bank, accelerating prices could speed the adjustment of wage growth back toward target, to the extent that expectations matter. The risk is that interest rates may need to rise a little faster than financial markets anticipate.

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