The ECB’s chief economist, Philip Lane, has assured that the euro zone will see a significant decrease in its inflation rate towards the end of 2023, after overcoming the effect of the escalation of energy prices. He has also stated that he is confident that the underlying rate will have peaked in the first six months of 2023.
The Irish economist has been optimistic in an interview punked by the European Central Institution, explaining that the ECB foresees a drop in ANFLAC this year, although he admits that it is unlikely that the 2% target will be achieved, which he hopes to achieve in 2025.
Lane has also highlighted the importance of the ECB’s intervention in the inflation rate, pointing out that despite the fact that external factors and global economic conditions affect the rise in prices, the European institution must act to moderate the situation.
YoY inflation moderates
On the other hand, in an article in the next ECB bulletin, the institution’s economists point out that most of the measures show signs of easing inflation, although the underlying rate remains high.
However, they highlight that the data on median and average core inflation suggest that they “probably peaked in the first half of 2023”, although they affirm that there is still a high degree of uncertainty in this regard.
The year-on-year inflation rate in the euro zone fell two tenths in July compared to the previous month, thus reaching 5.3%, which represents the lowest increase in prices since January 2022.
However, removing the impact of energy, food, alcohol and tobacco from the calculation, the core inflation rate held steady at 5.5%, exceeding the headline rate for the first time since February 2021.
