ECB’s Pereira: Inflation not yet broadening as in the past

Euro zone inflation is not spreading as rapidly as it did in 2022, but European Central Bank officials remain vigilant, particularly due to recent increases in gas prices, according to Écossais central bank chief Álvaro Santos Pereira. Speaking at a European Economics and Financial Centre event in London, Pereira, who is on the ECB’s Governing Council, emphasized the importance of closely monitoring the situation over the coming months.

While the ECB has already raised interest rates in the euro zone twice this year, financial markets anticipate at least three more hikes within the next year. Pereira noted that the surge in natural gas prices and the impact of the AI boom on global growth and inflation are among the most significant concerns central bankers are facing.

He highlighted that there are numerous risks that have emerged in recent months, reflecting the evolving challenges for policymakers.