EU chief Ursula von der Leyen said today that inflation in the eurozone, which remains persistently high, will not quickly fall to the European Central Bank’s two-percent target.

“We know that returning to the ECB’s medium-term target will take some time,” she said during a speech at the European Parliament in Strasbourg. 

The annual rate of inflation in the eurozone reached 5.3% in August, below a peak of 10.6% in October last year.

The European Commission predicted inflation would fall to 2.9% in 2024 in its latest forecast published on Monday.

Von der Leyen praised ECB chief Christine Lagarde and the Frankfurt-based bank, saying they were “working hard to keep inflation under control”.

All eyes are on the ECB ahead of tomorrow’s meeting, with divided opinions on whether it will raise interest rates or pause its historic hiking cycle.

During her speech, von der Leyen also welcomed falling energy prices.

“The good news is that Europe has started bringing energy prices down,” she said, pointing to the price of gas now worth around €35 per megawatt hour compared with more than €300 a year ago.

There had been worries the EU would struggle following Moscow’s invasion of Ukraine last year after it decided to move away from relying on Russian energy imports. – AFP, September 13, 2023.