ECB’s Escriva says unexpectedly strong euro to weigh on inflation

According to European Central Bank (ECB) Governing Council member Jose Luis Escriva, the stronger euro and cheaper energy have been weighing on consumer price growth in the region. 

He says the ECB needs to closely monitor the factors affecting volatile components of inflation. The decline in the cost of energy and raw materials seen now could slow the rise in consumer prices in the short term, the official says.

New ECB projections for inflation and economic growth are due to be released on June 5. Besides, the central bank is expected to cut rates again at its next meeting, Bloomberg reports. 

This will be the eighth consecutive reduction in borrowing costs, and some officials suggest further monetary easing may be needed. 

At the moment, the duration of the disinflationary trend remains unknown, the ECB notes. Officials also highlight the uncertainty of the economic outlook, primarily due to US President Donald Trump’s trade policy. According to Escriva, impacts of US tariffs will depend on Europe's retaliation.