2023-11-27 21:29:28
According to its President Christine Lagarde, the ECB cannot yet celebrate victory in the fight against inflation. This is not the time to start doing that, the Frenchwoman said on Monday in the Economic and Monetary Affairs Committee of the European Parliament in Brussels: “We must continue to closely monitor the various forces that affect inflation and remain firmly committed to our mandate Focus on price stability.” The ECB’s next interest rate decision is due on December 14th.
“Our future decisions will ensure that key interest rates remain at a sufficiently restrictive level for as long as necessary,” Lagarde said. The central bank will continue to proceed in a data-dependent manner. The ECB will keep an eye on the inflation outlook, the inflation dynamics and also how strong the monetary policy measures are affecting the economy.
Weakening inflationary pressures
Lagarde assumes that inflationary pressure will continue to ease. However, inflation may rise slightly again in the next few months – mainly due to base effects. However, the medium-term inflation outlook remains subject to great uncertainty. In October, inflation in the euro area was 2.9 percent – in autumn 2022 it was at times over ten percent.
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The monetary authorities are aiming for 2.0 percent as the ideal value for the economy. At its most recent interest rate meeting in October, the ECB decided to stop the series of interest rate increases for the time being in view of the easing price pressure. The deposit rate that is relevant on the financial market is 4.00 percent – the highest level since the start of the monetary union in 1999.
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