Euro area HICP: Limited energy pass-through to core prices

Research evidence excerpt

Euro area HICP: Limited energy pass-through to core prices

Raphael Brun-Aguerre Europe Economic Research J P M O R G A N(33-1) 8703 2409 17 July 2026

raphael.x.brun-aguerre@jpmorgan.com

The June ECB seasonally adjusted core data were revised down from 0.15%m/m to 0.10%m/

m, a move due to core goods (now -0.14%m/m sa) while services prices were largely

unchanged at 0.21%m/m sa. Assessing the data can be complicated due to the recent noise

(holidays impacting services or the sales period dragging core goods prices). Averaging the

last four months to get rid of some noise, core prices have been running at a 2.2% ar pace,

with services and core goods prices running at 3.0% ar and 0.5% ar, respectively. Core prices

have thus remained sticky due to services. Negotiated pay inflation has declined, but non-

wage pay has been sticky in recent quarters. The impact of tech is also visible in services

inflation.

The data suggests that the pass-through of energy prices to core inflation has been very

limited so far. But renewed energy price pressures have emerged. The price of Brent has

increased signficantly in recent days. Refining margins have increased (in particular diesel).

And country measures aimed at offsetting high energy prices have come to an end at the end

of June. These dynamics are already reflected in weekly fuel prices, which have increased

so far in July (especially diesel prices). TTF gas prices have also been rising to reach €57/

Mwh. The direct impact of these recent developments is taken into account in our forecast,

as we have lifted our energy price inflation path (reaching 3.0%oya by year end). We however

left unchanged our core inflation forecast (reachign 2.5%oya around year end), which

assumes a limited pass-through of energy prices to core overall.