In an interview with Germany's Frankfurter Allgemeine, Philip Lane, the chief economist of the European Central Bank, indicated that although the majority of factors suggested a continued decline in euro area inflation, there were also concerns, such as the possibility of unsuccessful EU-US trade negotiations, that could lead to an increase in inflation.

Key Quotes

  • ECB's task to bring inflation back to 2% is mostly completed.
  • Services inflation is still too high. Inflation is to remain close to 2% in the coming months.
  • The impact of tariffs may influence medium-term inflation.
  • No one is talking about dramatic rate cuts. We are in a zone of normal central banking.
  • We won't return to low pre-COVID inflation rates.
  • Some spillover effects from high US rates in the medium term.
  • We need to look at the impact of exchange-rate shifts.


Source: Fxstreet