Inflation reaction : ECB to cut rates in October
- 01 October 2024 (5 min read)
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Headline HICP (in % yoy) | Headline | Core | Germany | France | Italy | Spain |
AugustSeptember (AXA IM) | 2,2 | 2,8 | 2,0 | 2,2 | 1,2 | 2,4 |
| 1,7 | 2,7 | 1,7 | 1,7 | 0,6 | 1,6 | |
September (Refinitiv Consensus) | 2,0 | 2,8 | 1,9 | 2,0 | 1,0 | 1,9 |
September (Flash) | 1,8 | 2,7 | 1,8 | 1,5 | 0,8 | 1,7 |
Source: Eurostat, Bloomberg and AXA IM Research, October 2024
Euro area headline inflation dropped to 1.8% yoy in September (-0.4pt), slightly above our forecast but below consensus (2%). Energy deflation accounts for most of the deceleration (-6% yoy) but core inflation decelerated to 2.7% yoy (-0.1pt). It is in line with our forecast and below consensus (2.8%). But most importantly it is a large miss versus ECB September macroeconomic projections. The ECB had a core inflation averaging 2.9% in Q3, which implied a figure around 2.9% for September (Exhibit 2).
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