Oxford Economic Research Institute: Inflation risks intensify, likelihood of interest rate hike in September increases

According to Jinshi reports, Iain Simmons, an analyst at the Oxford Economic Institute, stated that the inflation rate in the Eurozone remains above target levels and faces significant risks in the future. Due to the escalating situation in the Middle East leading to high energy prices, the overall inflation rate rose by 0.1 percentage points in July, reaching 2.9%. He pointed out that since the breakdown of the Iran ceasefire agreement, the risk of broader inflationary impacts has significantly increased, which strengthens the case for an interest rate hike in September.

Nevertheless, the inflation data shows a relatively mild response to the escalating situation in the Middle East, and the second round of wage effects later this year may be limited.