ECB Governing Council member Bostjan Vasle said the most important thing for him is to start the process of ending asset purchases “note very late in the year”, and “have the opportunity to be out of negative territory by the turn of the year.”
“We’re still expecting quite strong positive growth rates, and if that scenario materializes I don’t see any reasons why we wouldn’t continue with policy normalization after the turn of the year and go above zero with interest rates,” he said.
That’s “one element affecting my understanding of not only inflation, but especially inflation pressures which are in the pipeline at the moment,” Vasle said. “It also gives me additional insight into what’s happening in the labor market and how these expectations regarding wages will be formed in future months and quarters.”
“My expectation is that in a quarter or two we’ll see the peak of inflation and then a gradual easing by the end of the year,” he said. “The last inflation reading was indeed very high, but in the context of the conflict and the rising prices across various energy segments, it was something which wasn’t so unexpected.”
