They Said It About Core Inflation - Recent Comments of Governing Council Members

27 January 2023

FRANKFURT (Econostream) – The following is a compendium of comments made by European Central Bank Governing Council members related to the monetary policy relevance of core inflation. We include comments made since the December 15 Council meeting.


Christine Lagarde (ECB)
23 January 2023

‘But while energy inflation has recently been coming down, underlying inflation continues to rise. As a result, it is vital that inflation rates above the ECB’s 2% target do not become entrenched in the economy.’

15 December 2023

‘Food price inflation and underlying price pressures across the economy have strengthened and will persist for some time.’

‘It may well be that the December number of HICP, and possibly core inflation, be a little bit lower. But we have good reasons to believe that January and February, for instance, are likely to be higher. So we cannot be fixated on one single number. … To just give you a little bit more substance: typically, January and February are months where some of the passthrough, particularly energy prices, will reach the retail level. There are countries where the wholesale high prices have not yet travelled through the retail, and where people have not yet seen the high level prices, for energy in particular, so we are very mindful of that. The other component which we see also rising in the next few months is food. So food and energy will continue to, unfortunately rise, which explains why we have this revision of projections.’


Isabel Schnabel (ECB)
10 January 2023

‘What started as a relative price shock has gradually morphed into a broad-based increase in the general price level. Preliminary inflation data for December point to a persistent build-up of underlying price pressures even as energy price inflation has started to subside from uncomfortably high levels.’


Fabio Panetta (ECB)
24 January 2023

‘…some positive signs on the inflation front are emerging. For example, the seasonally adjusted three-month inflation rates (which capture the latest dynamics of inflation) have decreased in recent months as regards not only headline but also core inflation.’

‘…the recent improved economic data will support core price pressures.’


Philip Lane (ECB)
6 January 2023

Persistent energy price weakness should lead to ‘less pressure on food inflation, less pressure on core inflation. We should recognize that but, of course, we also should recognize the uncertainty about the future path of energy prices.’


Joachim Nagel (Bundesbank)
25 January 2022

‘Core inflation – the rate that strips out the more volatile energy and food prices – is a better indicator of the price trend. And that core rate has been rising more or less steadily since last summer, climbing to 5.2% in the euro area and 5.4% in Germany in December. That's also why I see no reason to change any aspect of the path mapped out by ECB President Christine Lagarde.’

‘…inflation, just like core inflation, is still very high.’

24 January 2022

‘Energy prices skyrocketed and over time price pressures have spread across the economy. Just take the core rate of inflation, that means the increase in prices excluding energy and food. In December, it rose to 5.2% year-on-year in the euro area. That’s far too high.’


François Villeroy de Galhau (Banque de France)
18 January 2023

‘[W]e have seen encouraging signs [on inflation] in the last two months in France and the euro area with a stabilization or even a downward trend. We should reach the peak of headline inflation and probably underlying inflation in the first half of 2023, but this will only be a step, and certainly not the end of the fight against inflation.’

17 January 2023

‘We have had encouraging signs on French and euro area inflation in the last months that it is beginning to stabilise and even a downwards trend […] though we have not seen this yet in core inflation.’

‘This will be the real sign [that inflationary pressures are beginning to subside].’

‘We should see the peak in headline and probably core inflation in the course of the first half of 2023. It will be a step, but it will not be the end of the fight against inflation.’

11 January 2023

‘Unfortunately, inflation has spread to all goods and services: core inflation - excluding energy and food - which we estimate at around 4.2% in December, is also well above the 2% target, and it is not falling. It is on this "general" inflation that monetary policy is relevant, and we have a responsibility not to let it take hold.’

5 January 2023

‘We need to remain pragmatic and to be guided by observed data, including on core inflation, without getting fixated on overly mechanical rate hikes.’

19 December 2022

‘Faced with this broad “underlying” inflation (excluding energy), monetary policy is necessary and effective.’


Ignazio Visco (Banca d’Italia)
23 January 2023

‘[T]he core component of inflation has progressively strengthened, to 5.2% [in December], also reflecting the usual lag in the transmission of energy cost dynamics to final prices of goods and services.’

‘We have seen how the rise in energy prices has ended up being reflected in a gradual increase, still in progress, in core inflation, i.e. net of the more volatile components such as energy products and foodstuffs, which are also affected by the conflict. It is to be expected that if the cost of energy does not rise appreciably, core inflation will also fall over a not too long period, reflecting its recent sharp decline. But expectations need to remain firmly anchored.’


Pablo Hernández de Cos (Banco de España)
16 January 2023

‘Overall, about 75% of the increase in euro area inflation in 2022 is estimated to have been caused by the direct and indirect effects of energy and food prices. But the pass-through of supply shocks and depreciation would have been faster than in past episodes, leading to a broad-based build-up of inflationary pressures. Thus, core inflation (excluding energy and food) reached 5.2 % last December, an all-time high.’

11 January 2023

‘[C]ore inflation stood at 5.2 % [in December], a record high and two tenths of a percentage point higher than in November.’


Klaas Knot (De Nederlandsche Bank)

24 January 2023

‘We focus on core inflation where, unfortunately, there is no good news. Because it is still on the rise. Underlying inflationary pressures show no signs of abating yet.’

19 January 2023

‘Core inflation has not yet turned the corner in the euro area.’

‘Core inflation shows no signs of abating. I would first need to see different dynamics in core inflation before I could start thinking about a more equal balance of risk.’


Mārtiņš Kazāks (Latvijas Banka)
13 January 2023

‘It is possible for core inflation to continue trending up even as headline inflation is coming down, for instance, due to swings in energy prices. In my view, core inflation currently is a key gauge for inflation persistence and policy decisions.’


Yannis Stournaras (Bank of Greece)
30 December 2022

‘In the medium term, the risks regarding the inflation outlook are intertwined with the possibilities of … further increases in energy and food prices [and] strengthening the extent to which increases in energy and food prices are passed on to final consumers.’


Peter Kažimír (National Bank of Slovakia)
23 January 2023

‘What's currently the most authoritative from my point of view is the core-inflation trend. Its development confirms the need to continue on the path taken.’


Gediminas Šimkus (Bank of Lithuania)
24 January 2023

‘Core inflation remains strong and demonstrates that the fight against inflation is not over.’

‘Pressures in wage growth are increasing — I expect wage increases to exceed historical averages in the euro area. It's something that's happening and something we need to take into account because it affects core inflation.’


Robert Holzmann (Austrian National Bank)
11 January 2023

Must watch core inflation ‘very closely’.

‘As long as core inflation has not peaked, the change in headline inflation will not change our determination.’