MADRID, Feb 15 (Reuters) – Euro zone inflation might fall sooner than earlier thought given a number of optimistic developments in current months however previous worth hikes and a good labour market might nonetheless exert upward stress on underlying costs within the close to time period, European Central Financial institution policymaker Pablo Hernandez de Cos mentioned on Wednesday.
“Latest knowledge on euro space inflation and a few of its key determinants are considerably encouraging, however the total state of affairs nonetheless requires warning”, De Cos mentioned in a speech posted on the webpage of the Financial institution of Spain.
Having raised charges by 3 proportion factors since July, policymakers have began to ponder when and the place the quickest tightening cycle in ECB historical past will finish, particularly since inflation is now retreating shortly from report highs.
De Cos mentioned that the proof thus far was very preliminary and there have been a number of areas that required cautious monitoring, such because the residual pass-through of previous inflationary shocks and the symmetry of the pass-through of current power worth declines to core inflation, labour market and wage developments.
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He additionally talked about the potential results of the Chinese language reopening, the resilience of the euro space economic system and the transmission of ECB financial coverage selections.
“All these should be assessed as a part of the complete projections train below manner within the run-up to our March assembly,” De Cos mentioned.
Reporting by Jesús Aguado; Modifying by Balazs Koranyi
Our Requirements: The Thomson Reuters Belief Ideas.
