Euro area – Inflation forecasts revised up. Inflation in the euro area accelerated rapidly over the past few months, to 3.4% y/y in September. While we stick to our view that the rise of inflation will prove transitory, we now fear that it will not be short-lived. Based on our forecasts, the headline index should average 2.3% in 2021, while probably staying just above 2% in 2022 as well. The trend will be decreasing during the next year, with a likely high in February (at 3%) and a low in December (1.2%).
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