© Reuters. Joachim Nagel, President of Germany’s federal reserve Bundesbank addresses the media through the financial institution’s annual information convention in Frankfurt, Germany March 1, 2023. REUTERS/Kai Pfaffenbach/File Photograph
NICOSIA (Reuters) – Euro zone inflation will stick with it declining within the months forward however at a slower tempo, Bundesbank President Joachim Nagel was quoted as telling Cypriot newspaper Kathimerini on Sunday.
Euro zone inflation eased to 2.4% in November from 2.9% in October, effectively beneath expectations for a 3rd straight month and fuelling market hypothesis that European Central Financial institution (ECB) charges might come down faster than the financial institution now guides.
“We have not yet won the fight against inflation,” stated Nagel, who visited Cyprus final week. He described inflation as a ‘cussed, grasping beast’ and stated the following part of wrestling it down could be harder.
“Add in a scenario where an escalation of geopolitical tensions could imply higher inflation and it becomes clear that it would be way too early to declare victory over high inflation rates,” stated Nagel, an influential voice on the ECB’s fee setting Governing Council.
“I can’t tell whether interest rates have already reached their peak. On the ECB Governing Council we decide on interest rates on a meeting by meeting basis following our data-dependent approach.”
Nagel added that the outlook for inflation was tempered by a weakening of dampening base results and the phasing out of measures to cap excessive power costs in lots of European nations. He additionally pointed to an anticipated continuation of sturdy wage progress.
“All in all, I expect inflation to carry on declining, but at a slower pace and with possible bumps along the way,” Nagel stated.
