Inflation in the euro area is close to the target. The ECB is unlikely to raise interest rates in December
The year-on-year inflation rate in the euro area continues to fall substantially. While it reached 5.2 percent in August, the current (i.e. October) Eurostat estimate is 2.9 percent. Inflation in euro area countries has therefore come significantly closer to its target of two percent per year. Therefore, the European Central Bank will probably not increase the basic interest rates even at its last monetary policy meeting this year. Unless it wants to deny its previous rhetoric. „We are determined to ensure that inflation returns to our two per cent medium-term target in a timely manner. Based on our current assessment, we consider that the key ECB interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal. Our future decisions will ensure that our policy rates will be set at sufficiently restrictive levels for as long as necessary,“ stated the president of the ECB Christine Lagarde after the monetary policy mee...