Market: Inflation data proves effectiveness of ECB monetary policy, says Herodotou

LIMASSOL, Cyprus (Reuters) – The European Central Bank’s (ECB) monetary policy is effective in containing prices, Cyprus Central Bank Governor Constantinos Herodotou said on Wednesday.

“Recent inflation data confirms that monetary policy transmission is effective and has an impact on inflation,” Constantinos Herodotou, who is also a member of the ECB Governing Council, told a conference .

“The ECB has managed to keep inflation expectations anchored, since most long-term inflation expectation measures are currently around 2%, the target inflation rate,” Constantinos Herodotou said.

However, “uncertainty” persists, he added, in reference to the recent surge in energy prices which could once again be transmitted to the rest of the consumer basket and push prices upwards again.

“Moreover, the high wages and profit margins seen in the eurozone last year need to be closely monitored, although they are currently expected to normalize.”

In September, inflation in the euro zone fell to its lowest level in two years.

Consumer prices in the 20 countries that share the euro rose 4.3% in September, the slowest pace since October 2021, compared to 5.2% a month earlier, according to preliminary Eurostat data published Friday.

(Report by Michele Kambas, French version by Corentin Chappron, edited by Kate Entringer)

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