ECB’s Dolenc Sees Less-Pronounced Inflation Undershoot Next Year

The European Central Bank (ECB) Governing Council member, Primoz Dolenc, has suggested that euro-area inflation is likely to slow down less drastically below the 2% target in 2026 than previously anticipated. This observation supports the case for the ECB to maintain a steady approach to interest rates. Dolenc's comments indicate that the expected undershoot of the inflation target may not be as pronounced as initially feared, which could influence the ECB's policy decisions in the coming years. This is a significant development, as the central bank has been actively raising interest rates to combat high inflation levels in the eurozone. The article suggests that this assessment by Dolenc, a member of the ECB's Governing Council, may contribute to the central bank's decision-making process and its approach to managing monetary policy in the region. The potential for a less-pronounced inflation undershoot could impact the pace and extent of future interest rate adjustments by the ECB.