Makhlouf Becomes Increasingly Confident that ECB Will Achieve 2% Inflation Target Next Year

Forex - Gabriel Makhlouf, Governor of the Central Bank of Ireland and member of the ECB Governing Council, stated that he is "increasingly confident" that the European Central Bank (ECB) will achieve its 2% inflation target next year. However, Makhlouf warned that stubbornly high price increases in the service sector and strong wage growth still pose a risk to this projection. He expressed a desire to see Eurozone service inflation get closer to 3% from its current level of 4% to bolster his confidence in the ECB's ability to meet its overall inflation target next year. "The latest data gives me increasing confidence that we will reach our 2% inflation target by 2025, but the stickiness of service inflation and the high wage growth leave some room for caution," he said. In his remarks at the annual meeting of the UK Society of Professional Economists, Makhlouf noted, "While goods inflation hovers around its long-term average of about 0.5-1%, I would like to see service inflation closer to 3% to be more aligned with our target." He reiterated that he remains open-minded about the pace of future interest rate cuts due to recent volatile economic data and uncertainty regarding the economic policies of trading partners.