Two wild cards to watch

Analysts will be keeping close tabs on the inflation numbers out of the Euro zone later this year, as they alone will offer clues to the actual timing of any potential rate hike. Energy prices and the rate of the Euro will be two wild card factors, which could play into the inflation outlook. Of course, a continuing rise in energy prices could add pressure to the inflation outlook.

The relative strength of the Euro has also played into the inflation outlook. “The strong Euro has definitely contained inflation. It gives the ECB a reason not to raise rates,” says Fischer.

“Import prices have not contributed to inflation at all, except for some commodity goods.”

As a result of this relationship, a weakening of the Euro later this year could actually light a fire under inflation pressures in the Euro zone.