The statements of Philip Lane, chief economist of the European Central Bank, today were as follows:-
- The task is not over yet with regard to inflation, and prices for services still need to fall.
- Inflation is approaching the 2% target.
- Excluding new geopolitical or political risks, a significant part of the final stage in returning inflation to the 2% target will be completed next year.
- Monetary policy should respond to both negative and positive risks of inflation.
- We have made it clear that we are moving on a meeting-by-meeting basis.
- We do not commit ourselves in advance to an exact pace of reduction, but we will have to gradually reduce our prices.
- The ECB should be able to cut interest rates to a level that no longer restricts the economy in 2025.
- Monetary policy should not remain constrained for too long, otherwise the economy will not grow sufficiently and inflation will then fall below the target of2%.
The statements are consistent with their recent statement, it is a confirmation of a cut in interest rates next December, but the question now after the weaker PMI data over the past week is whether the ECB will move by 50 basis points instead of the 25 that the market is pricing in or not?
I think the inflation data that will be released this week will be an indicator of the movements of the European Central Bank next meeting.
