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European central bank says inflation to stay at 2% by 2025

Flag REUTERS/Kai Pfaffenbach
European Union flags flutter outside the European Central Bank headquarters in Frankfurt, Germany, on April 26, 2018

Inflation should still land at the European Central Bank’s (ECB) target of around two percent by 2025 despite the violence in Israel weighing on commodity prices, ECB policymaker Francois Villeroy de Galhau said on Tuesday.

In an interview with franceinfo radio, Villeroy said the ECB was particularly wary about oil price developments but added those prices only accounted for a small chunk of overall inflation, which is still “clearly” decreasing as a whole.

Oil prices eased on Tuesday after rallying more than four percent in the previous session, with traders cautious as they keeps tabs on potential supply disruptions amid military clashes between Israel and the Palestinian Islamist group Hamas.

He also said ECB’s current interest rates, set last month at a record four percent after 10 successive hikes, were at a “good level”, adding that now was not the right time for further increases.