Core inflation up again

In July 2022, inflation excluding food and energy prices was 9.3 percent y/y, according to the National Bank of Poland. A month earlier, this measure of core inflation was calculated at 9.1 percent y/y, so we are seeing a continuation of price increases. The overall CPI was, as a reminder, 15.6 percent y/y. The Monetary Policy Council recognizes that it has limited influence on some prices, while the growth of others can be effectively limited by, among other things, interest rates. 

The CPI shows the average change in the prices of the entire, large basket of goods purchased by consumers. What about core inflation? The most commonly used indicator by analysts is the inflation index after excluding food and energy prices. As the NBP explains: it shows the price trends of those goods and services that are relatively influenced by the monetary policy pursued by the central bank. This is because energy prices (including fuel prices) are determined not on the domestic market but on world markets, sometimes also under the influence of speculation. Food prices depend to a large extent on, among other things, the weather and the current situation in the domestic and world agricultural market.

(Interia)