MNI BRIEF: ECB Sees Headline Inflation Below Target By End '25
Year-end inflation seen at 1.9%, below the ECB's 2% target level.
Headline inflation is projected to be below the European Central Bank's 2% target by the end of 2025, according to the latest round of estimates by its Frankfurt-based staff.
Although 2025 headline inflation was presented in the policy decision at 2.1%, that is the average for the year, and full projections released later show it at 1.9% in Q4 '25. End-2024 sees inflation at 2.9% versus the average 3.2% for 2024 presented in the policy documents.
Core inflation is seen at 2.1% in Q4 2025, in line with the full year average presented by the ECB President Christine Lagarde in the post-meeting press conference.
On Thursday, the ECB hiked key rates by 25 bps and said rates could now be held at current levels to meet the inflation target, dependent on incoming data.