ECB inflation target 2%
2022.12.02 09:33
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ECB inflation target 2%
Budrigannews.com – Even though the pace of price increases slowed in November, ECB Vice-President Luis de Guindos stated on Friday that the European Central Bank needs to concentrate on bringing inflation down to its mid-term goal of 2%.
As a result, the bank needs to continue raising interest rates.
De Guindos stated at a financial event, “Inflation is starting to decelerate, but that deceleration has to be stable,” and he also stated that inflation could remain around 7% by the middle of 2023.
His remarks came after inflation in the euro area declined significantly more than anticipated in November, raising hopes that the sky-high rate of price growth has now fallen below 10%.
However, according to De Guindos, the ECB should avoid an “M-shaped evolution of inflation” in which inflation picks up again after slowing, as well as a clear stabilization above 2%.
De Guindos stated, “Our fundamental objective, our mandate is to bring inflation to our definition of price stability, which is 2%.”
He also stated that the ECB was anticipated to further raise interest rates at the monetary policy meeting this month, where it would also decide how to reduce its balance sheet.
Customer costs in the 19 nations sharing the euro developed by 10% year-on-year this month, after a 10.6% increment in October.
Due to the fact that price growth will take years to contain, the European Central Bank (ECB) has raised rates at the quickest rate ever recorded this year. A series of increases in the months to come is still likely.
However, following back-to-back moves of 75 basis points on December 15, some policymakers have argued that inflation is at its peak and that the ECB has made sufficient progress to justify more modest steps.
In just three months, the ECB has increased its rate on bank deposits from minus 0.5% to 1.5%.
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