ECB's Interest Rate Decision Based on Falling Services Inflation

In a recent statement, Bostjan Vasle, a member of the European Central Bank (ECB) Governing Council and President of the Bank of Slovenia, explained the ECB's decision to reduce its interest rates again. This move was prompted by a decline in services inflation, which has bolstered confidence that the main index is returning to its target of 2%.

Although Vasle acknowledged that services inflation remains elevated, he noted recent signs of moderation, attributing this to slower growth in salaries. Additionally, he pointed out that the Eurozone's economic growth is still weak due to challenging conditions in manufacturing and weak export dynamics. However, he expressed optimism that growth will strengthen in the coming years, driven by rising real household incomes and less restrictive monetary policy.