HELSINKI (Reuters) – Inflation in the euro zone will continue to slow and return to its target, allowing the European Central Bank (ECB) to cut rates, two members of the institution’s Governing Council said on Wednesday.
Fabio Panetta, governor of the Italian central bank, explained that “current macroeconomic conditions are consistent with a normalization of monetary policy. The ECB started this process a few weeks ago and according to the base scenario, the will continue gradually.
The monetary policy chief, speaking at a conference in Helsinki, notably dismissed concerns about the persistence of service costs, explaining that this “showed that inflation in the services sector is still increasing faster than in the case of goods.
Bringing inflation back to its target is therefore just a question of patience, underlined Fabio Panetta.
Olli Rehn, member of the ECB Governing Council, said on Wednesday that he also expected inflation to continue to slow.
“Inflation dynamics continue to suggest that inflation will stabilize at its target in the medium term, although this decline has slowed in recent months. We expected the path to be bumpy,” recalled Olli Rehn during the conference in Helsinki.
The Finnish monetary policy chief also declared on Wednesday, during an interview with Bloomberg, that betting on two more rate cuts in 2024 was “reasonable”.
(Report by Anne Kauranen; written by Balazs Koranyi, Corentin Chappron for the French version, edited by Blandine Hénault)
