Jose Luis Escriva, ECB board member and the governor of the Bank of Spain, said that there are not yet sufficient signs that inflation in the eurozone may decline or rise further to affect the ECB's plans for further monetary easing.
According to official data, consumer price growth in the eurozone slowed in September, falling below experts' forecasts and preliminary estimates. Meanwhile, core inflation fell to a 5-month low. According to the report, the consumer price index rose by 1.7% per year after an increase of 2.2% per year in August. The September reading was the lowest since April 2021. Economists had expected inflation to fall to 1.8%. The last time inflation fell below the ECB's target level (2%) was in June 2021. The core consumer price index - excluding energy, food, alcohol and tobacco - rose by 2.7% per year, slowing compared to August (+2.8%), and confirming experts' forecasts.
The latest Survey of Professional Forecasters (SPF) showed that headline HICP inflation expectations for 2024 and 2026 remained unchanged at 2.4% and 1.9% respectively, while they edged down (by 0.1%) to 1.9% for 2025. Longer-term HICP inflation expectations (for 2029) were unchanged at 2.0%. Expectations for core HICP inflation, which excludes energy and food, for 2024, 2025 and 2026 stood at 2.8%, 2.2% and 2.0% respectively. These were revised upwards by 0.1% points for 2024 and were unchanged for 2025 and 2026.
"Currently, the data suggests that we are approaching the inflation target in general in accordance with the trajectory envisaged in the September macroeconomic forecasts," Escriva said, adding that the balance of risks included in the latest ECB forecasts suggests that inflation is turning out "somewhat higher than expected and the opposite". However, Escriva said there weren't yet signs of additional risks that could make inflation fluctuate any further from the ECB's current diagnosis.