For the European Central Bank to be able to lower interest rates...
According to European Central Bank (ECB) Governing Council member Klaas Knot, the ECB has a "credible outlook" for 2 percent inflation in 2025. Knot also stated that certainty regarding wages is necessary for inflation to be reduced.
According to European Central Bank (ECB) Governing Council member Klaas Knot, the ECB needs to have certainty regarding wages in order to lower interest rates.
In an interview with the Dutch public broadcaster NPO1, Knot said there is a "credible outlook" for bringing inflation back to the ECB's 2 percent target in 2025.
Knot, who is among the rate-setters, said, "The only missing piece of the puzzle is the absolute conviction that wage growth will adjust to lower inflation. Once that piece of the puzzle falls into place, we will be able to lower interest rates a little.”
Knot added, "We can only have sustainable price stability if wage growth returns to around 2.5 percent. Recent wage growth in Europe is at the 5 percent level. This trajectory will not happen overnight."
News Source: 12punto
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