In an interview with Spanish news agency Europa Press, ECB Vice President Luis de Guindos emphasized the significance of new macroeconomic projections in September, together with another two months of data on inflation and underlying inflation. These projections and data will help ECB reassess its monetary policy stance more effectively.
De Guindos stressed the importance of having more confidence that inflation will reach ECB’s target of 2% by the end of 2025, calling it the “key question.” He acknowledged the high level of uncertainty, stating that ECB must be “prudent” when making decisions.
He predicted that inflation will remain “around current levels until the end of the year” and observed that all measures of underlying inflation are declining. He added, “The disinflation process will continue from the start of next year.”
De Guindos also pointed out that wages are “starting to slow down,” and firms expect wage increases to moderate, particularly from 2025 onward. This moderation in wage increases is expected to lead to a reduction in services inflation, helping ECB achieve its 2% inflation target by the end of next year.
