ECB’s Vasle: Next Steps Data-Dependent; See Inflation Continuing to Subside

26 January 2024

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Boštjan Vasle on Friday said that the ECB’s next steps would depend on incoming information, and predicted the continued slowdown of inflation in the near term.

In a statement posted to the website of the Bank of Slovenia, which he heads, Vasle said that the latest data ‘roughly confirm the December macroeconomic forecasts for the euro area’ and that ‘the current level of interest rates, if maintained long enough, will contribute substantially to the timely return of inflation to the target level.’

Further steps would hinge on the situation, he said, meaning ‘economic and financial data, the movement of core inflation and the effectiveness of our measures’, and rates would in any case remain ‘sufficiently restrictive for as long as it takes for inflation to return to our 2% target in time.’

The ‘further gradual moderation’ of inflation could be expected in the next months, he said.

Vasle observed that the economic slowdown was broad-based, but pointed out that the labour market remained historically tight.

‘The tightness of the labor market and increased wage growth remain the central risks for the longer-term persistence of elevated inflation’, he said.