I guess it was no surprise when the Central Statistics Office initially announced that inflation in July had reached 4.2%, after being 2.6% in June. Economists had expected inflation to rise significantly.
There really wasn’t a surprise, and if there was, it was a positive one in the sense that it could have been worse. As we speak, we don’t yet know the detailed components of the increase in inflation. We’ll know when the full data becomes available, but it seems that the spillover effect of higher energy prices was less than anticipated, and in some sense less than I had predicted. In any case, this increase was expected. I think what’s really important now is to think about the future consequences that this might have. Especially in the context of what will happen to inflation at least through the turn of the first and second quarters of 2025.
