Core inflation rate
In light of the core inflation rate which has been fluctuating around the 1% mark – significantly
below the ECB’s inflation target of close to but under 2% – low growth
momentum and persistent structural problems in the eurozone, the ECB is likely
to maintain its expansive monetary policy and interest rate increases should be
quite moderate.
Accordingly, the disparity between the two affordability indices
should persist for some time and Frankfurt house prices will only begin to fall
when, possibly in several years’ time, interest rates again begin to rise
significantly.
EU Forecast
euf:ba18.c:110/nws-01