© Reuters. A member of the European Central expects low inflation this month for those reasons!
Arabictrader.com – In an interview with the American newspaper Financial Times on Tuesday, Philip Lane, chief economist of the European Central Bank, stated that prices in the now-area are still neutral, indicating that they have not reached a tightening zone yet, and that the European Central Bank will have to continue raising interest rates. Significantly, so that it can bring the very high inflation rate down to its 2% target.
The policy maker of the European Central Bank added that the euro area has been witnessing abnormal conditions for a long time, and his most prominent statements in this context were as follows:
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The inflation pressures that the European Central is currently witnessing have begun to accumulate since the summer of 2021.
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What happened in the 1970s was a misdiagnosis that went on over a long period of time.
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The ECB has demonstrated its determination to bring inflation down to its target.
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Compared to December, there are significant declines in energy prices in the eurozone during January, so far, which may be reflected in the form of a significant decrease in inflation data for the current month of January.
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The ECB operates under a state of high uncertainty.
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Uncertainty is the main reason the ECB should not be too confident about the final level it should reach, which is sufficient to bring down inflation with certainty.
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Certainly interest rates should be higher than they are now.
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The final interest rate that the ECB will reach will depend on a lot of factors and economic data.
It is noteworthy that Lin’s statements regarding interest rates were identical to the statements of many members of the European Central Bank, and the latest economic bulletin, published by the European Central Bank last week, indicated that the bank’s economists expect inflation in the euro area to decline to 2% sometime during the second half of the year. in 2025, and that it will decline to 6.3% by the end of the current year 2023, provided that the adjusted consumer price index for the region – which measures inflation excluding food and energy prices – remains above 2% during that period.
