A number of forecast indicators point to persistent inflationary pressure in the coming months.
As reported by FinFly, this view was shared by ECB Chief Economist Philip Lane.
According to him, under these conditions, we have a clear goal: to achieve inflation stabilization at our 2% target over the medium term.
Lane welcomed the end of the 'hot' phase of the conflict in the Middle East, which was the main cause of accelerating inflation in the eurozone, adding that the situation remains unstable and there are risks of a new escalation.
Following its June meeting, the ECB raised all three key interest rates by 25 basis points. In particular, the deposit rate now stands at 2.25% per annum. The regulator also raised its inflation forecast for the eurozone for this year to 3% from the previously expected 2.6%.
Slovak central bank governor and ECB Governing Council member Peter Kazimir admitted that the regulator may have to tighten monetary policy again if necessary. 'Our specific actions and their timing will depend on incoming data,' he noted at an event in Bratislava. 'But I think the direction is clear and our work is not yet finished.'
His colleague from the Bank of Spain, Jose Luis Escriva, pointed out that rising energy prices are beginning to affect other sectors of the economy. 'In addition to the widespread increase in energy prices, particularly oil prices, indirect effects are becoming evident. This means higher costs throughout the production chain. For example, transportation and food prices are rising,' Escriva said.