ECB’s de Guindos: We Are Increasingly Confident That Inflation Will Reach 2%
16 December 2024

By Marta Vilar – MADRID (Econostream) – European Central Bank Vice President Luis de Guindos said on Monday that the ECB was now more confident about inflation reaching the 2% target.
In a speech at the Madrid Foro Empresarial, de Guindos said that despite ongoing upside risks to inflation, the ECB was now ‘increasingly confident that inflation will converge towards our definition of price stability.’
However, services inflation still needed to moderate further, he said.
‘If inflation continues to meet our forecasts, do not have the slightest doubt that the trajectory of monetary policy will continue to be the one we have had in past months’, he said.
There remained upside risks to inflation related to politics and geopolitics, he said.
The ECB’s approach would continue to be focused on the evolution of data and involve ‘great prudence but with a clear trajectory’, he said.
It is crucial that Europe avoid a trade war, he warned.
In such a situation, ‘the exchange rate is usually adjusted and could become an instrument which accompanies a trade war’, he said. ‘Its instrumentalisation as a protectionist element also usually brings retaliation.’
Uncertainty was at its highest level since the Covid-19 pandemic, he stated.
‘Under these circumstances, the good news is that we consider that we are getting closer to our objective of price stability and the recovery will take place sooner or later’, he said.
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