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The European Central Bank (ECB) remains resolute in its pursuit of a 2% inflation target by 2025, despite the recent surge in oil prices. Governing Council member Francois Villeroy de Galhau, addressing concerns, reassured that the central bank’s commitment to taming inflation remains unwavering.
Oil Price Surge Unlikely to Derail EC
“We’re very attentive, but it doesn’t put into doubt the underlying disinflation,”. ECB Villeroy stated in an interview with France Inter radio on Saturday. “Our outlook and engagement are to bring inflation to around 2% in 2025.”
The ECB’s latest inflation forecast hinges on an estimate of a $82.7-per-barrel oil price for the current year. Gradually declining to $77.9 by 2025. However, the recent spike in crude oil prices hints that the possibility of oil reaching $100 per barrel is once again on the horizon. This resurgence serves as a stark reminder that the era of market volatility, instigated by the pandemic and geopolitical tensions, continues to linger.
Persistent Uncertainty in Global Markets
Just last week, the ECB raised borrowing costs for the 10 consecutive time. Elevating the deposit rate to a historic 4%. Villeroy, who also heads the French central bank, reiterated his stance to France Inter, suggesting that maintaining this rate is crucial for controlling inflation. His comments imply a preference for patience over further rate hikes at this juncture.
ECB Villeroy Recent Interest Rate Hike
As uncertainty prevails in global markets, the ECB Villeroy remains vigilant in its mission to steer inflation toward the coveted 2% mark by 2025.
Disclaimer: Please note that this article serves solely for informational purposes and should not be construed as financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
