ECB seeks 'middle ground' strategy to simplify its policy rates in 2025
Date
1/14/2025 1:14:59 AM
(MENAFN) The European Central bank (ECB) plans to further simplify its policy volumes in the current year but should strike an equilibrium to prevent both a slump as well as postponements in lowering inflation, ECB head economist Philip Lane noted.
“If interest rates fall too quickly, it will be difficult to bring services inflation under control,” Lane informed Austrian daily Der Standard.
“But we also don’t want rates to remain too high for too long, because that would weaken inflation momentum to the point where the disinflation process could fall below 2 percent rather than stabilizing there,” he also mentioned.
With inflation projected to hit the ECB’s 2 percent goal by the middle of the current year, the ECB did four interest volume cuts past year and anticipates to do another four throughout the present year, most of them nearly in the initial half of 2025.
Lane highlighted that lowering services inflation, which has remained nearly 4 percent for most of the previous year, is important to monitoring price surges.
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