ABN AMRO said overlapping supply-side shocks across energy, food and supply bottlenecks are lifting Eurozone inflation, which has risen in recent months and reached 4% in October. The analysis described differing transmission channels and lags, and pointed to food prices and goods “pipeline pressures” as drivers that could keep price growth firm even as energy inflation eases.
Inflation Outlook and Contributing Factors
The bank expects inflation to pick up further in the coming months and remain elevated through 2027, with the persistence of the impulse depending on whether inflation expectations and wage demands trigger second-round effects.
Potential Scenarios and Policy Implications
It also set out a scenario in which looser labour market conditions and high interest rates keep expectations anchored, limiting a repeat of 2022–23-style persistence and implying the next inflation wave has a shorter tail.
