The President of the German Central Bank, Joachim Nagel, stated on Sunday that inflation in the Eurozone will continue to decrease in the coming months but at a slower pace.
The inflation rate in the Eurozone dropped to 2.4% in November from 2.9% in October, significantly below expectations for the third consecutive month, raising market speculation that interest rates from the European Central Bank may decline more rapidly.
Nagel said, “We have not yet won the battle against inflation,” and mentioned that the next phase of the fight would be more challenging. Nagel, an influential voice in the European Central Bank’s board that determines interest rates, added that escalating geopolitical tensions could lead to higher inflation. It is becoming clear that declaring victory over elevated inflation rates is still premature, and I cannot say whether interest rates have already peaked. In the Governing Council of the European Central Bank, we decide on interest rates at each meeting, following our data-dependent approach. Inflation expectations have eased due to the weakening of core effects or the moderation of high energy prices in many European countries.”
He also pointed to the expected continuation of robust wage growth in general, anticipating that inflation will persist in declining but at a slower pace, with potential obstacles along the way.
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Shady Fouad is a technical analyst at LDN Company
Shady's strategic vision in the currency markets is reinforced by more than fifteen years of trading experience, which enables him to blend economic and technical analyzes with high efficiency, and find the best investment ideas for traders.
