Core inflation pressures are more persistent than anticipated, according to European Central Bank Vice President Luis de Guindos.
(Bloomberg) — Core inflation pressures are more persistent than anticipated, according to European Central Bank Vice President Luis de Guindos.
The measure of consumer-price growth that excludes energy and food — and is currently the key guide for ECB interest-rate setters — will probably remain elevated, Guindos told an event in Madrid.
“Underlying inflation is proving to be much stickier,” he said Wednesday, reiterating the ECB’s commitment to bring the main gauge of price gains back to the 2% target.
While economists and investors widely expect another increase in the ECB’s deposit rate at the next policy meeting, in May, several officials have said the cycle of monetary tightening is nearing its conclusion.
How much remains will depend on the development of core inflation, which has been creeping higher even as the headline number retreats.
The recent banking troubles in the US and Switzerland are also weighing on policymakers’ minds.
Guindos said European lenders should avoid complacency and remain cautious after the turmoil.
–With assistance from Zoe Schneeweiss.
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