(Tiper Stock Exchange) – isabel Schnabelmember of the executive committee of the European Central Bank, said that after months of hikes to record levels, inflation in the euro area has started to moderate, but the momentum in price dynamics “remains high”. If energy has shown a return, making the greatest contribution to the general slowdown, other components of the cost of living “are continuing to rise”, he underlined speaking at a Finanzwende webinar.
There war had a negative impact on the economic growth of the Eurozone, without, however, triggering the recession that was expected. The rate of unemployment has continued to drop to record lows, while some staff shortages have arisen, he continued. Now, after sharp increases to record highs in recent months, inflation “has started to moderate,” he noted, according to slides published by the ECB. The moderation in headline inflation is mainly attributable to thepowerwhile other components of the index are continuing to rise.
“The momentum of inflation remains high – explained Schnabel – especially on the prices of services“. “The prices of the gas have dropped to pre-war levels in Ukraine and bottlenecks in global supply chains are easing. However, even in the face of these factors, underlying inflation pressures remain high and most components of the inflation index remain elevated,” the ECB representative noted.
Meanwhile, according to Schnabel, the growth of salaries “has strengthened significantly, although real wages (that is, those net of inflation, ed.) are declining energetically”. In this framework Schnabel has pointed out how the measures of balance against i price increases of energy remain untargeted and, consequently, with inflationary effects in the medium term. Finally, the ECB official noted that the expectations of market discount further increases ai interest rates of the ECB and a marked downsizing of the balance sheet of the Eurosystem. Significant increases are expected returns long term on government bonds but stable dynamics on the spreads, ie the differentials between the remuneration rates of the bonds of the various countries of the euro area. Meanwhile, hikes in mortgage rates are putting an end to the race for money prices real estate.