ECB: “Restrictive Policy as Long as Necessary”

The ECB will continue to pursue a restrictive economic policy “for as long as necessary.” The goal of the European Central Bank, as written in the August newsletter, is to “timely bring inflation back to the 2 percent target in the medium term. The Governing Council will continue to take a data-driven approach in determining the appropriate level and the duration of restrictive leadership.”

Inflation in the eurozone continues to decline, but is expected to remain at excessive levels for a while.

“The interest rate hike (last updated July 27 – ed.) reflects the Governing Council’s assessment of inflation prospects, core inflation dynamics, and the intensity of monetary policy transmission. Events that are taking place since the June 15 meeting confirm expectations that inflation will continue to decline until the end of 2023, but remain above the target for an extended period of time. While some measures show signs of easing, core inflation remains high overall,” the European monetary authority said in a document.