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

Author

Listed:
  • Bodnár, Katalin
  • Fabbri, Andrea
  • Rubene, Ieva
  • Zekaite, Zivile

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

Suggested Citation

  • Bodnár, Katalin & Fabbri, Andrea & Rubene, Ieva & Zekaite, Zivile, 2025. "Where do we stand with inflationary pressures arising from price resetting?," Economic Bulletin Boxes, European Central Bank, vol. 4.
    • Handle: RePEc:ecb:ecbbox:2025:0004:4
    Note: 2881411
    as

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    More about this item

    Keywords

    disinflation; euro area; inflation; services inflation;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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