Something for your Espresso: Energy is back
Morning from Europe.
Early evidence from the region North Rhine Westphalia suggests that energy is back wreaking havoc with the disinflation narrative.
The core number for North Rhein Westphalia is just above 0.35% on the month, which is substantially less worrying than the 0.51% headline inflation on the month – clearly above consensus. This is admittedly a blow to the hopes that the ECB will cave in to the weak growth and pause from September and onwards and it is food for the loud and outspoken Bundesbank-gang within the ECB.
Spanish inflation and other regional numbers from Germany will follow over the course of the day. We will update you via “Nuggets” later.
Chart 1: Core lighter than headline in North Rhine Westphalia