Europe has not yet won the fight against inflation. This was supported by the president of the Bundesbank, Joachim Nagel, in an interview for the Cypriot newspaper “I Kathimerini”. Nagel was in Cyprus to participate in a Cypriot Central Bank conference dedicated to developments in the European economy and the effectiveness of the ECB's monetary policy. “We have seen an encouraging decline in inflation this year. In particular, energy prices have fallen. However, we cannot take for granted that inflation will continue to decline in the coming months,” Nagel warned.
The governor of the German Central Bank has in fact highlighted that the positive data this autumn are largely determined by the base effect, because prices in the autumn of 2022 were very high. Not only that, but the measures taken by various European governments to contain energy price increases are being interrupted. Furthermore, “high demand for workers means wage growth is likely to remain strong.” “In general, I expect inflation to continue to decline but more slowly and with possible fluctuations,” Nagel warned.