ECB’s Rehn: Inflation to Stabilise at Target in Medium Term Despite Bumps Along the Way

26 June 2024

By David Barwick – HELSINKI (Econostream) – European Central Bank Governing Council member Olli Rehn on Wednesday said that euro area inflation would ultimately settle down at the ECB’s price stability target, notwithstanding latest developments.

Speaking at the 3rd International Monetary Policy Conference of the Bank of Finland, which he heads, Rehn spoke of ‘less convincing data on inflation recently’, given the ‘sideways’ evolution of the data, but hailed the ‘substantial progress’ already made and urged that current spot figures not be allowed to obscure this.

‘Overall, the dynamics of inflation continue to indicate that inflation will stabilise at the target in the medium term, even though its downward path has slowed somewhat in recent months’, he said.

Though the path would remain ‘bumpy’, the ECB ‘is determined to ensure that inflation stabilises … in a timely manner’, he said.

The ECB would continue to be guided in its decisions by the inflation outlook, the dynamics of underlying inflation and policy transmission strength, he said.

High interest rates had led to ‘somewhat subdued’ economic growth, but a soft landing was in the offing, he said.