The European Central Bank is not expected to change its stance in response to the euro zone’s inflation declining for a second consecutive month in December, according to economists.
In the wake of Russia’s invasion of Ukraine in February 2022, the euro area economy has been under tremendous pressure, with food and energy prices skyrocketing in 2017. The European Central Bank announced in 2022 that it would likely boost interest rates four more times this year in a bid to combat increasing inflation.
For 2022, 2023, and 2024, respectively, the central bank predicted average inflation rates of 8.4%, 6.3%, and 3.4%. The goal of the bank’s mandate is a headline inflation rate of 2%.
European energy prices have decreased. Energy costs dropped from 34.9% in November to an estimated 25.7% in December, according to the latest figures. In terms of national breakdown, the Baltic nations once again registered the highest jumps in inflation, with a rate of about 20%.