In a blog post, ECB Chief Economist Philip Lane said “recent appreciation of the euro exchange rate dampens the inflation outlook.” “Headline inflation is expected to remain persistently low over the medium term, notwithstanding a gradual pick-up over the projection horizon.”
“Inflation remains far below the aim and there has been only partial progress in combating the negative impact of the pandemic on projected inflation dynamics,” he added. “Moreover, the outlook remains subject to high uncertainty and the balance of risks continues to be tilted to the downside.”
