Natixis: Europe's inflation in the future will be higher than the average level in the 2002-2007 period

Analysts at Natixis expect higher inflation in the Eurozone in the future:

• The average inflation rate in the Euro Area in the period 2002-2007 was 2.2%. We have studied the factors that will lead to higher inflation in the future compared to the 2002-2007 period, including: Higher energy prices, tighter labor markets, slowing productivity levels, and Demand exceeding supply became the mainstream trend, while the period 2002-2007 witnessed a trend of supply exceeding demand.

• If medium-term inflation is higher than 2.2% (at 2.7%, 3%), it can be predicted that short-term and long-term interest rates will be higher than in the 2002-2007 period.

• Medium-term inflation levels will determine nominal and real interest rates