Are you Scared of Inflation? Not Exactly What it Seems


Euro Area annual inflation was -0.2 % in February 2016, down from 0.3 % in January 2016. Looking at the main components of euro area inflation, services have the highest annual rate in February (1.0 %, compared with 1.2 % in January), followed by food, alcohol & tobacco (0.7 %, compared with 1.0 % in January), non-energy industrial goods (0.3 %, compared with 0.7 % in January). All the figures are positive apart from energy, that dragged down drastically the overall inflation for February (-8.0 %, compared with -5.4 % in January).

Each of the main components contributes in varying degrees to the headline inflation in the euro area. In terms of weight, services is the largest component, accounting for around 44.2 % of individual consumption expenditure in the euro area. It is followed by non-energy industrial goods with around 26.6 %. Food, alcohol & tobacco and energy account for around 19.5 % and 9.7 %, respectively. Together, they comprise less than one third of euro area expenditure, but they have significant impacts on the headline inflation as their levels tend to fluctuate significantly more than the other components.


[Continua a leggere su]

All the views expressed are opinions of Bocconi Students Investment Club members and can in no way be associated with Bocconi University. All the financial recommendations offered are for educational purposes only. Bocconi Students Investment Club declines any responsibility for eventual losses you may incur implementing all or part of the ideas contained in this website. The Bocconi Students Investment Club is not authorised to give investment advice. Information, opinions and estimates contained in this report reflect a judgment at its original date of publication by Bocconi Students Investment Club and are subject to change without notice. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. Bocconi Students Investment Club does not receive compensation and has no business relationship with any mentioned company.

Copyright © Mar-16 BSIC | Bocconi Students Investment Club