ECB’s Lane: Disinflation ‘Well on Track’, Inflation to Return to Target in Course of 2025

24 October 2024

ECB’s Lane: Disinflation ‘Well on Track’, Inflation to Return to Target in Course of 2025
Philip Lane, chief economist of the ECB, at the 7th ECB Conference on Monetary Policy in Frankfurt on October 7, 2024. Photo by ECB.

By Marta Vilar – MADRID (Econostream) – European Central Bank Chief Economist Philip Lane said on Thursday that inflation would hit the ECB's 2% target at some point next year.

In a speech at the Drivers and Dynamics Conference 2024 in Cleveland, Lane said that ‘2024 is a transition year, in which backward-looking components are still playing out’.

The slowdown of inflation was ‘well on track’ and inflation was expected to reach the 2% goal during 2025, he said.

‘Indeed, momentum indicators for services confirm the slight easing of inflation dynamics’, he said.

The downtrend anticipated in wages next year and the effects of monetary policy restrictiveness should help inflation fall further, according to Lane.

‘Forward-looking indicators suggest further diminishing wage pressures into 2025’, he said.

Expected easing in wage growth would take place mainly due to the dwindling of catch-up dynamics, he said.