ECB’s Vasle: Next Steps Data-Dependent; Disinflation Slower Now

8 March 2024

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Boštjan Vasle on Friday said that the ECB’s next moves would depend on incoming information, and noted that the disinflationary process had decelerated lately.

In a statement issued by the Bank of Slovenia, which he heads, Vasle reiterated that ‘the current level of interest rates, if maintained long enough, will significantly contribute to the timely return of inflation to the target level’, and that ‘further steps will continue to depend on the current situation, i.e. on economic and financial data, the movement of core inflation and the effectiveness of our measures.’

Once external price pressures had weakened, disinflation’s speed would depend mainly on core inflation and labour costs, he said.

‘The continued decline in inflation, which has somewhat slowed down in recent months, maintains market participants' expectations for a cut in key ECB interest rates later this year, expecting the reduction to be more gradual and cautious than initially anticipated’, he said.

Interest rates would remain restrictive enough for however long necessary to restore price stability in a timely manner, he said.