Euro Area's headline inflation likely to average 0.1% this year

The headline inflation is likely to miss the ECB's target for a long time, but the accommodative monetary policy will eventually support both euro area inflation and the activity outlooks. 

"Underpinning Euro area's headline inflation profile is the assumption that euro-denominated Brent crude oil prices will average around EUR49/bbl this year and EUR50/bbl next", says Barclays.

Consistent with this, it may take a long time, certainly longer than envisaged by the ECB (September 2016), for headline and core inflation to return to a sustained path that is consistent with its medium-term inflation target.

"Taking into account the latest upward move in Brent crude oil prices, Euro area's headline HICP inflation is expected to average 0.1% this year and +1.0% next. The core inflation is expected to rise from +0.8% in 2015 to only +1.0% in 2016", forecasts Barclays.