ECB’s Rehn: Underlying inflation is easing only gradually

ECB’s Rehn: Underlying Inflation Shows Gradual Easing, Raising Concerns

The European Central Bank’s (ECB) governing council member, Olli Rehn, has expressed concerns over the gradual easing of underlying inflation. In a recent statement, Rehn highlighted that despite efforts to stimulate economic growth, inflationary pressures remain subdued.

Rehn’s remarks come as the Eurozone continues to grapple with low inflation, which has been a persistent challenge for the ECB in recent years. The central bank has implemented various monetary policy measures, including ultra-low interest rates and asset purchase programs, to boost inflation and stimulate economic activity.

However, Rehn’s comments suggest that these efforts may not be yielding the desired results. The underlying inflation, which excludes volatile components such as food and energy prices, is still showing signs of sluggishness. This raises concerns about the effectiveness of the ECB’s policies in achieving its inflation target of close to, but below, 2%.

While headline inflation figures may have shown some improvement, Rehn’s emphasis on underlying inflation highlights the need for continued vigilance. The ECB will likely face increasing pressure to reassess its monetary policy stance and explore alternative measures to address the persistent low inflation environment.

The statement from Rehn underscores the complex challenges faced by the ECB in navigating the Eurozone’s economic recovery. As policymakers continue to monitor inflation trends, the central bank may need to consider further adjustments to its policy toolkit to ensure price stability and sustainable economic growth.

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