2024-05-09 04:33:12
The latest statistical data on the eurozone economy increases confidence that inflation in the region is returning to the target of 2%.
As Day.Az reports with reference to Interfax, this was stated by the chief economist of the European Central Bank, Philip Lane, to the Spanish newspaper El Confidencial.
A preliminary report from the European Union’s statistics office, published last week, showed that eurozone inflation in April remained at the March level of 2.4%. At the same time, for the first time since November last year, a slowdown in inflation in the service sector was noted (to 3.7% from 4%), Lane noted.
“This is an important first step in the next phase of easing inflation,” he said.
“April’s eurozone inflation data, as well as the region’s first-quarter GDP report, strengthens my confidence that inflation is returning to target,” Lane said. “So at this point, my confidence is higher than was at the time of our April meeting. Of course, we will receive new data before June.”
Inflation excluding the cost of food and energy (CPI Core index) in April slowed to the lowest level since February 2022, 2.7% from 2.9% a month earlier. Eurozone GDP in the first quarter increased by 0.3% compared to the previous three months and by 0.4% in annual terms. The eurozone economy grew quarterly on a quarterly basis since the third quarter of 2022.
Traders expect the ECB to lower key interest rates at its June meeting, but are not sure of the further timing of their reduction.
Currently, the ECB’s base lending rate is 4.5%, the deposit rate is 4%, and the margin lending rate is 4.75%.
Many experts are wondering how the delay in easing the Federal Reserve’s monetary policy will affect the ECB’s decisions.
Lane said that the European regulator will be guided in its decisions by the situation in the eurozone and “we should not exaggerate” the impact of the Fed’s actions on the ECB’s policy.
“The situation in the US economy and US interest rates affect the eurozone in a variety of ways, and these different mechanisms work in opposite directions,” he said.
Lane also noted that the ECB is closely monitoring developments in the Middle East.
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