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However, factors indicating a potential recovery are becoming apparent. With a strong job market and higher incomes, there are optimistic signs that consumer confidence might improve, thereby boosting spending. The rise of affordable credit could further stimulate consumption and investment, alongside supportive exports in response to growing global demand.
Inflation and Interest Rates
Current inflation levels stood at 2.5%, largely aligning with ECB forecasts. Core inflation, excluding energy and food prices, remained steady at 2.7%. Wage growth appears moderate yet high, with profits helping to cushion wage increases' impact on inflation. The ECB projects that inflation will return to the target level of 2% by 2025, although various external factors could introduce risks.