Introductory remarks by Luis de Guindos, Vice-President of the ECB, at a Euro 50 Group meeting

London, 29 April 2024

Inflation

As regards inflation in the euro area, we have come a long way, but there is still work to be done. Nevertheless, we are heading in the right direction. After peaking at more than 10% in October 2022, headline inflation fell to 2.4% in March this year. Core inflation has also come down substantially from its peak 12 months ago of almost 6%. In March 2024 it stood below 3% for the first time in two years. In addition, most measures of underlying inflation declined further in February, confirming the picture of gradually diminishing price pressures. The impact of previous adverse supply shocks continues to fade and tight monetary policy is weighing on demand.

Mirroring the disconnect between manufacturing and services activity, goods and services inflation have diverged. Goods inflation dropped to 1.1% in March after almost reaching 7% in early 2023. Services…