ECB’s Pereira: Euro Zone Inflation Not Broadening, Closely Watching Risks
Euro Zone Inflation Trends and ECB Policy Response
By Marc Jones
Current Inflation Dynamics in the Euro Zone
LONDON, Sept 16 (Reuters) - Euro zone inflation is not broadening as widely as in past episodes but policymakers are keeping a close eye on developments, especially in light of the recent surge in gas prices, Portuguese central bank chief Álvaro Santos Pereira said.
Pereira’s Assessment of Inflation Spread
"Inflation is not spreading or is not broadening as fast as it happened in 2022," Pereira, who sits on the ECB's Governing Council, said at a European Economics and Financial Centre event at the Portuguese embassy in London.
"It doesn't mean that it could not happen... It's important for us to notice, and we monitor very closely exactly this in the next few months to see whether this is broadening."
ECB’s Recent Actions and Market Expectations
Interest Rate Increases
The ECB raised euro zone interest rates last week for the second time this year, and financial markets are pricing at least three more hikes over the next 12 months.
Key Risks Monitored by the ECB
Energy Prices and Technological Shocks
Pereira said the surge in natural gas prices was one of the things he was watching most closely, adding that the AI boom and its impact on global growth and inflation was another "shock" central bankers were grappling with.
Emerging Risks in the Economic Landscape
"There's a lot of risks that certainly have risen in the last few months," he said.
(Reporting by Marc Jones; writing by Balazs Koranyi; Editing by Hugh Lawson)
