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

Eurostat will release the preliminary estimate of Eurozone Harmonised Index of Consumer Prices (HICP) data for September on Friday, September 29 at 09:00 GMT and as we get closer to the release time, here are the expectations forecast by the economists and researchers of five major banks regarding the upcoming EU inflation print.

It appears that inflationary pressures will continue to ease. Headline is expected at 4.5% year-on-year vs. 5.2% in August, while core is expected at 4.8% YoY vs. the prior release of 5.3%. If so, headline would decelerate for the fifth straight month to the lowest since October 2021.

Commerzbank

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.

Deutsche Bank

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

Danske Bank

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%.

SocGen

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%.

Citi

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.