Credit Suisse | European Economics 02.02.11

Some highlights from the attached article:

The rise in headline inflation back above the ECB’s target, a high and rising oil price, and ECB President Trichet’s hawkish comments have all shifted concerns that higher inflation could prompt a rise in policy rates sooner than we currently expect.

Core inflation is fairly subdued... Governing Council members have insisted their mandate – and focus – is on headline.

a further rise in commodity prices and their pass-through to the HICP mean that there is a clear risk that inflation could rise to 3% in the autumn.

Credit Suisse European Economics 02.02