Euro area GDP growth has been sluggish this year. Inflation has slowed with the easing of the energy crisis. The European Central Bank has raised its key interest rates, which has reduced upward pressures on prices.
Inflation expectations are of key significance for price trends. Expectations regarding the future rate of inflation will affect price setting by businesses and the wage demands of employees.
Euro area inflation has been too high for too long. The European Central Bank’s interest rate decisions have reduced consumer, business and market expectations of high inflation in the future.
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