Eurozone: Inflation differentials to remain substantial – Rabobank

Economists at Rabobank expect inflation differentials between Eurozone member states to remain substantial.

Inflation differentials likely to stick around

“Despite some convergence since the summer of 2022, inflation differentials between Eurozone member states remain substantial. Moving forward, further convergence is to be expected as energy price swings weaken, energy price passthrough fades, and the effect of government support measures falls away. The larger-than-usual disparities in core inflation, however, will likely take longer to resolve.”

“Because of the large variety in inflation rates across the block, a one-size-fits-all monetary policy is even less likely to fit everyone than in 'normal' times. So in due time, the ECB could have more to worry about than the historically high inflation itself.”