After scrutinizing price increases, the European Central Bank (ECB) has its eyes fixed on wages.
Its Governing Council, which meets this Thursday in Frankfurt, should dampen market expectations of a rapid drop in rates, after the sharp drop in inflation observed at the end of 2023. The average price increase in the euro zone has fallen again to 2.9% in December, since its peak of 10.6% in October 2022. The return to the 2% target could arrive sooner than expected, later this year.
Christine Lagarde, President of the ECB, refuses to declare victory too soon.
In Davos last week, she deemed a first rate cut in the summer
“probable
”, agreeing for the first time with lip service to mentioning a date.
A way to calm the enthusiasm of the markets which were banking on spring.
“
We are optimistic about a credible prospect of inflation returning to 2% in 2025, but there is still a way to go before we get there
”…
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