The ECB’s chief economist, Philip Lane, says that cheaper energy will slow down the rise in prices.
of the euro area The rise in the consumer price index will clearly slow down this year, but the pace of price growth will remain high for the time being, says the chief economist of the European Central Bank (ECB) Philip Lane.
The ECB has raised its key interest rates at its last seven interest rate meetings, but a slowdown in inflation from double-digit figures in the fall allowed the central bank to slow down monetary policy tightening last week. The ECB raised its key interest rates by 0.25 percentage points last Thursday.
According to the Reuters news agency, Lane said in a speech at the Economic Forum in Berlin on Monday that the rate of increase in food and core inflation, converted to an annual change, is still fast.
Lane said sharply lower energy prices and easing product supply bottlenecks are slowing price increases.
Also according to Lane’s estimate, company price increases should decrease this year. According to Lane, companies are no longer able to raise their product prices so quickly because demand is normalizing.
Inflation in the euro area was 7.0 percent in April. It was at its fastest in October, when consumer prices rose by 10.6 percent from a year ago.
The ECB predicts that inflation will slow down to less than three percent in the last quarter of the current year. However, the slowdown in inflation below the central bank’s two percent target may stretch into the second half of 2025.
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