KOF Monetary Policy Communicator, December 2022
The KOF MPC figure for 15 December 2022 is 0.26. At today’s meeting, the ECB’s Governing Council communicated that inflation is expected to stay above the ECB’s inflation target until 2025.
The Governing Council decided to raise the key ECB interest rates by 0.5 percentage points. The council also expects that rates will have to be raised significantly further. Balance sheet reduction is starting in March at a monthly pace of 15 bn. Euros.
According to Eurostat’s flash estimate, Euro area annual HICP inflation was 10.0% in November, down from 10.6% in October. The main reason for this decline was energy price inflation. However, high infla-tion is supported by supply bottlenecks, pent-up demand and expected above normal wage increases. This development is reflected in a strong upward revision of the ECB’s inflation projections: Eurosystem staff projections foresee inflation at 8.4% in 2022, 6.3% in 2023 3.4% in 2024 and 2.3% in 2025 (June projections: 8.4% in 2022, 5.5% in 2023 and 2.3% in 2024).
Contact
KOF Konjunkturforschungsstelle
Leonhardstrasse 21
8092
Zürich
Switzerland