Inflation in the euro area is on the decline again after the price shock caused by the war in Ukraine. This gives the ECB leeway - longed for by borrowers and feared by savers.
The ECB is aiming for an annual wage agreement in the medium term Inflation rate of two percent. At this value, the monetary authorities see price stability guaranteed. According to BVR chief economist Andreas Bley, there is much to suggest that inflation will continue to fall, but uncertainty remains high. Energy prices are currently rising again and wages are growing strongly. ECB should therefore make any further interest rate hikes dependent on the data situation. A key interest rate cut in the Euro area is likely from June, says Deka Bank chief economist Ulrich Kater, like many other economists, believes a key rate cut is already anticipated under current conditions. The current number of future interest rate cuts has already been anticipated under the current conditions, says Kater. The Council of the European Central Bank (ECB) will decide on the further course of monetary policy on Thursday.