Global Courant 2023-05-02 14:07:53
Detail of a fish and seafood stall in the Central Market of Valencia, Spain.
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According to preliminary figures released on Tuesday, inflation in the eurozone has risen in April and remains significantly above levels targeted by the European Central Bank.
Headline inflation stood at 7% last month, after falling to 6.9% in March, according to Eurostat. Core inflation, excluding food and energy prices, stood at 5.6% in April, up from 5.7% in March.
The latest figures come just days before the ECB will announce a new monetary policy decision. Market players have debated whether the central bank will raise interest rates by 50 or 25 basis points.
The central bank started its current walking path in July 2022, when it brought its base rate from -0.5% to zero. The key ECB interest rate is currently 3%.
Despite the continued rate hikes, inflation remains above the ECB target of 2%. Estimates released last week by the International Monetary Fund suggested that headline inflation will not approach the ECB’s target until 2025.
“Further tightening is required, and once the closing rate is reached, that closing rate needs to be maintained for longer, because core inflation… is high and very persistent. And there is nothing worse than interrupting an effort to fight inflation. stop early, or stop too early, because if you have to do it a second time, the cost to the economy is so much greater,” Alfred Kammer, director of the IMF’s European division, told CNBC on Friday.
This is a breaking news story, check back later for more information.
(TagsToTranslate)Christine Lagarde
