Lorenzo Codogno Likely Quotations

We believe that the long-awaited shift from soft to hard data is evidence of a recovery in euro zone private consumption has started, and will likely proceed gradually and modestly over the coming months, in line with the expected improvement in household real disposable income.

Despite oil price tensions and strengthening domestic demand, the inflation performance remains subdued. Barring another oil spike, the headline rate is likely to ease further during the course of the year.

As January data are inflated by a growing tendency towards gift vouchers over Christmas, which are then turned into purchases afterwards, a return to normal in February is likely to show up in more subdued sales.

Services and probably consumer spending drove the increase in GDP. It makes a rate cut less likely for the moment.

The underlying trend is encouraging and will likely continue.