The ECB has done its job for the moment
Statement on the upcoming Interest Rate Decision of the ECB on 26.10.2023
The ECB has done its job for the moment
The ECB will leave key interest rates unchanged at its next meeting on 26 October. At present, it sees no reason for a further interest rate hike. The inflation figures for October and November will confirm a further decline in inflation. Driven by base effects, the inflation rate in the euro zone will fall to a value close to 3 % in November. A year ago, energy prices, especially for electricity and gas, exploded on wholesale markets. This effect has now clearly reversed.
The ECB can also point to weak economic activity in the Eurozone and the unclear impact of the Middle East conflict that has reignited. For the time being, the ECB has done its job. In 2024 it will then become clear whether the tightening of monetary policy that has already taken place is sufficient to anchor inflation permanently at 2%. On the way there, high wage increases stand in the way which will remain at a level of over 4% and thus certainly fuel inflation in the next 1-2 years. Furthermore, government spending remains high and, in some cases, exceeds the agreed deficit targets, which increases upward pressure on prices.
Please contact us at any time if you have questions or suggestions.
ETHENEA Independent Investors S.A.
16, rue Gabriel Lippmann · 5365 Munsbach
Phone +352 276 921-0 · Fax +352 276 921-1099
info@ethenea.com · ethenea.com