Eurozone HICP Preview: Forecasts from five major banks, overall inflation-slowing trend

Euro area inflation is expected to have fallen sharply by 0.8 percentage points to 4.4% in September. The core rate, which excludes the volatile prices of energy, food, alcohol and tobacco, is also expected to have fallen from 5.3% to 4.7%. However, half of this is due to the expiry of the three-month €9 ticket in Germany in September 2022. This price increase is now excluded from the YoY comparison. But even without this effect, the trend in the core rate is down.

We expect a 4.6% reading for the headline (5.2% in August) and 4.9% for core (5.3%).

We expect a decline in headline HICP to 4.4% from 5.3% in August driven by negative energy inflation, lower food prices, and a downtick in core inflation from 5.3% to 4.8%.

We expect headline inflation to fall by 0.7pp to 4.5%, due to energy base effects, while core could fall by 0.5pp to 4.7%, with an upside risk of 4.8%.

Headline and core inflation rates should drop back sharply on base effects (gas spike and German train ticket in Sep-22), to 4.5% and 4.8%, respectively. However, sequential growth is more interesting to gauge price pressures – energy HICP should be up again this month, by 1.3% MoM, and we pencil in another gain of 0.3% (seas adj) for core HICP (0.5% MoM NSA). September is usually a month with a high concentration of price changes, which should allow those sub-sectors still lagging behind in the price adjustment to hike their prices.