Inflation Expectations Remain Near 2% as ECB Monitors Emerging Risks

The European Central Bank is paying particular attention to inflation expectations as it assesses the latest price data. While short‑term expectations have shown a modest rise, the medium‑ to long‑term outlook remains firmly anchored around the 2 percent target that the ECB aims to maintain.

Lagarde explained that stable long‑term expectations are a key factor in keeping inflation under control. However, she warned that a sustained increase in these expectations, or clear evidence of a second‑round inflation process, would compel the bank to consider additional measures.

At present, the ECB judges its current stance to be suitable, but it will continue to scrutinise a range of indicators to determine whether the inflationary pressure is temporary or likely to become entrenched.