On Wednesday, the European Central Bank (ECB), which serves as the central bank of European Union countries that have adopted the EURO, said that it expects to reach its 2% inflation target in 2025.
The inflation rate in countries overseen by the ECB jumped to 2.2% in November compared to 2.0% in the month prior and 1.7% in September. Across the entire European Union, the inflation rate went up from 2.3% in October to 2.5% in November.
According to ECB President Christine Lagarde, the central bank forecasts more fluctuations in the near future but fully expects to reach a stable 2% inflation rate over the medium term this year.
“We have made significant progress in 2024 in bringing down inflation and hopefully 2025 is the year when we are on target as expected and as planned in our strategy,” Lagarde said. “Of course we will continue our efforts to ensure that inflation stabilizes sustainably at that 2% medium-term target.”
Since June, the ECB officials have made four interest rate cuts, each 25 basis points. The ECB benchmark interest rate is currently set at 3.15%. Further rate cuts are expected this year, with experts predicting at least four more before June.