Lifestyle inflation, driven by demand and targeted by policy rates, has exceeded the increase in prices of essential commodities since FY18, according to a report by Bank of Baroda’s economics department. The report highlights that lifestyle inflation rates have risen from 4% in FY18 to 6.4% in FY23, while per capita gross national disposable income has grown at a CAGR of 8.5%. The analysis reveals significant increases in the prices of various lifestyle items, reflecting increased affordability and aspirations for improved living standards.
BofA Global Research predicts that the European Central Bank will raise all three policy rates by 25 basis points at its upcoming meeting, citing a weaker growth outlook and no signs of a peak in core inflation. If the ECB does not hike next week, it could be the last hike of this cycle. BofA Global Research expects the first cut by the ECB in June 2024.
