The European Central Bank has ramped up its efforts to obtain data that typically provide long lags and little detail, as profits become essential in determining the inflation outlook. As part of the policy-making process, the central bank this year began tracking quarterly calls when business executives discuss financial results with analysts, Mr. Lane said.
Eurozone headline inflation is down significantly from last year’s peak, Thursday’s data showed. Inflation in Spain fell below 2% in june. But other indicators of domestic price pressure remain very strong. Eurozone-wide inflation data for June is due to be released on Friday. Economists surveyed by Bloomberg expect headline inflation to fall to 5.6% from 6.1% in May, while core inflation, which excludes energy and food prices, is expected to fall from 5.3% to 5.5%. expected to rise to
Looking further ahead, the central bank expects headline inflation to be around 3% next year. But Lane said he fears the “last kilometer” to reach his goal could be harder than expected. The Bank for International Settlements expressed a similar opinionwhich acts as a bank for the central bank.
“We have a target of 2%, but we don’t have a target of 3%,” Lane said. “We still have a lot of work to do to get it up from 3% to 2%.”
With all the uncertainty about the path of inflation after July, when the central bank is expected to raise rates, Lane said it would be best for policymakers to “not signal” what to do next. However, he said he expects interest rates to rise. Limit economic growth for a “considerable period of time”.
However, several other members of the bank’s board of directors said interest rates will need to rise again in September. And the bank’s governor Christine Lagarde this week hit back at investor expectations that interest rates would be cut next year, saying monetary policy was “restrictive” and that it should remain so “as long as necessary”. rice field.