ECB’s Unchanged Objective
Despite the spike in oil and fuel prices, the ECB maintains its goal to bring inflation back to 2% by 2025.
Bank of France head, Francois Villeroy de Galhau, emphasizes the minor impact of gasoline consumption on total inflation.
Current Oil Landscape
Brent crude oil prices hover near $100 a barrel due to potential supply deficits and extended supply cuts.
A Focused Concern
The rise in energy prices is not as widespread as in 2022, making rising oil prices less threatening to underlying disinflation.
Commitment to Inflation Target
The ECB is steadfast in its commitment and forecasts to bring inflation towards 2% by 2025.
Patience and Perseverance
Villeroy stresses the importance of maintaining current ECB rates and the significance of patience over further rate raises.
Gasoline’s Minor Role
Gasoline consumption at the pump constitutes roughly 5% of total consumption, making its impact on total inflation small.
Saudi Arabia & Russia’s Role
Major oil producers’ extended supply cuts put focus on potential supply deficit concerns in the fourth quarter.
War Impact on Prices
The war in Ukraine in 2022 included a widespread rise in various energy and commodity prices, compared to the current scenario.
Steadiness Over Haste
The emphasis is on perseverance and maintaining rates for as long as needed, underlining the importance of a steady approach over haste.