Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by András Szigetvari

13 January 2025

Is the inflation crisis in the euro area already over?

The recently released inflation figure shows that inflation stood at 2.4 per cent in December 2024, down from 2.9 per cent a year earlier. In late 2022, inflation had reached 10 per cent. Compared with these figures, we have made significant progress in terms of bringing inflation down, not all the way to 2 per cent, but close. But an important concept for us is that inflation should be sustainably at 2 per cent. We had a decline in energy prices, which ultimately brought down overall inflation. That is not going to continue. For inflation to be at our target of 2 per cent sustainably, there would need to be a further decline in services inflation from around 4 per cent today.

What can the ECB do?

We need to ensure that interest rates follow a middle path. If interest rates fall too quickly, it will be…