In an interview, ECB chief economist Philip Lane pointed to the December economic projections, and said, ” inflation will fall this year, and that it will go below our 2 per cent target in 2023 and 2024.”
While the 5% December inflation number is “unusually high”, Lane said that’s dominated by the 26% rise in energy prices last year. He added, “we do not see behaviour that would suggest inflation will remain above our target into the medium term.”
As inflation will “settle below our target in 2023 and 2024”, he added, “The criteria for moving interest rates up are therefore not in place. This remains our view.”
On growth, Lane said that bottlenecks are “temporary factors” and the order book is very good. “Overall, in Europe we see a solid growth engine this year, next year and the year after that.”
