ECB’s Stance on Monetary Policy
The ECB’s Governing Council emphasized that current monetary policy continues to enforce restrictive financing conditions. They noted that domestic price pressures remain high, particularly in the services sector. The council projects that headline inflation will likely exceed the target well into next year, suggesting a prolonged period of vigilance.
Labor Market Pressures
A significant factor influencing the ECB’s decision is the ongoing pressure from the labor market. Wage growth and employment levels continue to play a crucial role in shaping inflation expectations and overall economic outlook. The central bank is closely monitoring these indicators for signs of potential second-round effects on inflation.
Factors Influencing Future Decisions
The central bank cited three key areas they will…
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