It is still too early to “let your guard down” in the face of high inflation in the euro zone, despite the decline observed in recent months, which means that interest rates will have to rise further, a senior European Central Bank official said on Tuesday. .
From 10.4% in October, inflation has already fallen sharply in the euro zone in January, to 8.5% and for the third consecutive month, thanks to the lull in energy prices and the unblocking of logistics chains supply.
Nevertheless, we cannot let our guard down, because in the end, what really bothers us is that core inflation, i.e. excluding energy and commodity prices, is still at an extraordinarily high level. raised, warned Isabel Schnabel, member of the executive board of the ECB, during a webinar organized by the financial think tank Finanzwende.
Core inflation stagnated over 5% in January, defying ECB action.
These data are much more persistent and that is why they are particularly important for the evolution of medium-term inflation, underlined Mrs Schnabel.
The European Central Bank will bring inflation back to 2%, a level that reflects price stability, by the end of 2024 or 2025, Banque de France Governor Franois Villeroy de Galhau said in the morning. symposium organized by the German weekly Die Zeit.
The monetary institute is using the weapon of rates for this purpose, raised five times since July for a total of 3 percentage points, with the intention of continuing the movement in March or even beyond, by reaching a level of restrictive rates which penalizes the economy more than it supports it.
By raising rates, the ECB wants to dampen consumer demand, in particular, in order to reduce price pressures.
The ECB will be able to lower its rates again the day it has solid evidence that inflation, and in particular underlying inflation, is returning to our medium-term objective of 2%, explained Ms Schnabel.
Consumers in the euro zone, surveyed by the ECB, see inflation remaining above 2% in the medium term: their expectations for the next three years have increased slightly, from 2.9% to 3.0%, reversing a previous decline, according to the latest monthly survey published Tuesday by the monetary institute.
Driven a year ago by energy prices in the wake of the war in Ukraine, inflation is now affecting a broad basket of goods. Wages also tend to increase in response to losses in purchasing power for employees.