2021-11-09-牛津经济研究院-Eurozone_Inflation_hits_all_consumers_–_just_not_evenly_6页_387kb

Eurozone inflation reached 4.1% in October 2021, driven by energy prices, supply shortages, and other factors, but its impact on consumers varies by income group. Higher-income households face higher inflation on discretionary goods, but their excess savings and buffer allow them to offset effects. Lower-income households, with little savings and spending on essential goods like food and utilities, are more vulnerable to inflation's drag. Inflation expectations and uncertainty could dampen spending, but the overall consumption recovery is expected to continue. The forecast predicts a 0.3ppt drag on consumption in 2021-2022, primarily affecting lower-income groups.

• Inflation Situation: Eurozone inflation hits highs, driven by energy, supply, and sectoral factors, but expected to fade in 2022.
• Distributional Impact: Inflation affects households unevenly; lower-income groups (food, utilities) face higher pressure and less cushion, while higher-income groups (discretionary items) have savings to absorb costs.
• Moderating Factors: Excess savings (€780bn) support higher-income consumption resilience; unchanged inflation expectations keep consumption drag limited.
• Outlook: Despite inflation, consumption is expected to continue driving recovery, with risks only if unfavorable factors like supply shortages persist or preferential policies shift.