Speech by Philip R. Lane, Member of the Executive Board of the ECB, at the Banking & Payments Federation Ireland (BPFI) National Banking Conference

Dublin, 11 June 2024

Let me begin by offering some comments on the economic outlook, before discussing our decision last week to cut the key ECB interest rates by 25 basis points.^[1] The latest Eurosystem staff macroeconomic projections foresee economic growth at 0.9 per cent in 2024, 1.4 per cent in 2025 and 1.6 per cent in 2026, while inflation is projected to average 2.5 per cent in 2024, 2.2 per cent in 2025 and 1.9 per cent in 2026. Relative to the average annual inflation rates in 2022 and 2023 of 8.4 per cent and 5.4 per cent respectively, considerable disinflation has already occurred, with the latest inflation figure at 2.6% in May. For inflation excluding energy and food (often termed core inflation), staff project an average of 2.8 per cent in 2024, 2.2 per cent in 2025 and 2.0 per cent in 2026. Since core inflation stood at…