Eurozone: No normalisation – Natixis

Patrick Artus, Research Analyst at Natixis, suggests that in the Eurozone there will be no normalization of unemployment rate, inflation and interest rates.

Key Quotes

“We believe that in the euro zone:

• There will be no normalisation of the unemployment rate, which will remain high because the structural unemployment rate has increased significantly in the past 10 years;
• There will be no normalisation of (core) inflation, given the weak response of wage growth to the fall in unemployment and very intense competition which prevents price hikes; and
• As a consequence, there will be no normalisation of interest rates, given the high level of unemployment and the low level of inflation.”