ECB Vice-President Luis de Guindos said that consumer inflation in the eurozone continues to decline, which strengthens the confidence of ECB policymakers that the target level of 2% will be reached next year.
"According to the latest data, in March, overall inflation was 2.4%, while core inflation reached 2.9%. Most likely, inflation will fluctuate around these values in the coming months. However, in the medium term, we will steadily move towards our target level of 2%," de Guindos said.
Later today, at 09:00 GMT, the final data on the eurozone CPI for April will be released. Consensus estimates suggest that the overall CPI rose again by 2.4% per annum, but core inflation fell to 2.7% per annum from 2.9% per annum in March.
The ECB practically promised to lower the interest rate at its June meeting, but there is still uncertainty about the ECB's further actions. Earlier today, ECB board member Isabel Schnabel warned against back-to-back interest rate cuts amid ongoing inflation risks. "Although a rate cut in June may be justified depending on incoming data and forecasts, the rest of the situation is less certain," she said, adding that markets are currently also facing "very high uncertainty." Schnabel stressed that market participants have shifted to pricing in around three rate cuts now from six at the beginning of the year.