ECB’s Escrivá: ‘Risks to Inflation Remain Balanced’

23 October 2024

ECB’s Escrivá: ‘Risks to Inflation Remain Balanced’
José Luis Escrivá, governor of the Bank of Spain, at the ECB’s Governing Council meeting in Ljubljana, Slovenia on October 17, 2024. Photo by Adrian Petty/ECB.

By Marta Vilar – WASHINGTON (Econostream) – European Central Bank Governing Council member José Luis Escrivá said on Wednesday that the ECB had concluded at its latest meeting that risks to inflation were balanced.

In a panel session at the Institute of International Finance in Washington, Escrivá, who heads the Banco de España, said that ‘there are risks [to inflation] on both sides’.

On the upside, risks were related to persistent services inflation, he said.

‘Services inflation is declining, but we still see some stickiness that might be related to wage pressures’, he said.

It would be crucial to assess the developments of services inflation as well as the evolution of headline inflation, he stated.

‘On the downside, we are witnessing weaker demand than expected’, he said.

Acknowledging that ECB models could not fully explain why growth had been weaker than expected, Escrivá observed that waning demand could be a result of a still-restrictive monetary policy stance.

‘It is important to examine new data. Remember that for the third quarter of 2024 we haven’t seen hard data, we are relying on surveys’, he said.

Escrivá expressed satisfaction with the downward trajectory of inflation and repeated that the baseline scenario currently sees inflation at the 2% target sometime in 2025.

‘But we have to be aware of the uncertainties on both sides’, he added.