Where do we stand with inflationary pressures arising from price resetting?

Katalin Bodnár, Andrea Fabbri, Ieva Rubene and Zivile Zekaite

Economic Bulletin Boxes, 2025, vol. 4

Abstract: Euro area services inflation has been persistent owing to a combination of factors, including a delayed response of some services prices to past shocks. This, in part, reflects staggered price setting, as the price changes of a large share of the services basket take place in just one or two months of the year. This box identifies the services items with such pricing patterns and shows that the inflation rate of services items with an annual repricing pattern responded to the past inflationary shocks with some lag. This response has been protracted and at the beginning of 2025 inflation was still high for the identified items with an annual repricing pattern, especially administered items. However, the price adjustment to past shocks for these items should now be largely completed. JEL Classification: E31

Keywords: disinflation; euro area; inflation; services inflation (search for similar items in EconPapers)
Date: 2025-06
Note: 2881411
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