Macro · Weekly Economic Monitor Viewpoint

Key arguments

• Eurozone headline inflation is near its peak, but energy is expected to stay in double digits until February next year.
• Core inflation remains contained, but higher gas prices push the expected core peak to 2.7% next spring, with risks of greater persistence.
• US September employment fell short of expectations and revised consumer price deflator data show a less concerning inflationary picture.
• The persistence of the energy shock could justify another rate hike by both central banks in December.

Corresponding source evidence

1. The rise in core indices was decidedly more contained (by just one tenth, in line with expectations) : the HICP excluding energy, food, alcohol and tobacco at 2.5%, and the measure excluding energy and fresh food at 2.2%.
2. We believe that this component is very close to its peaks (which we expect to be above 20% y/y in October-November), but that it is likely to remain in double digits until February of next year. · next year
3. However, the latter will have an impact, especially on processed foods, in the coming months, pushing food inflation above 2% in our estimates for the entire second half of 2027. · 2027