ECB’s Vasle: Moderation of Services Inflation Boosts Confidence in Sustainable Return to 2%

13 December 2024

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Boštjan Vasle on Friday said that declining services inflation strengthened the confidence in a durable restoration of price stability.

In a statement posted to the website of the Bank of Slovenia, which he heads, Vasle said that the ECB would decide monetary policy meeting by meeting on the basis of information relating to the current situation, core inflation and policy transmission.

‘With four reductions in key interest rates since June this year – a total of one percentage point – the Governing Council of the ECB is responding to macroeconomic conditions that indicate that inflation is steadily approaching the target’, he said.

‘Service inflation remains high, but in recent months it has been steadily moderating, which was partly due to lower wage growth’, he said. ‘This steadily reduces the uncertainty regarding the sustainability of inflation's return to the target.’

On the other hand, prospects for economic activity were ‘less favourable’, he said. Although GDP growth surprised slightly positively in 3Q, ‘monthly data continue to point to weak growth, both due to poor conditions in manufacturing and a slowdown in growth in services’, he said.