DUBLIN, Feb 6 (Reuters) – European Central Bank policymaker Gabriel Makhlouf identified a loss of momentum in euro zone economic growth or the possibility that inflation continues to undershoot the ECB’s 2% target in a more entrenched manner as two risks to its outlook.
“On the undershoot, long-run inflation expectations remain anchored at our 2% target. This does not currently suggest a persistent undershoot dynamic, but we continue to closely monitor developments here,” Makhlouf said on his blog on the Irish central bank’s website.
He singled out wage growth as an area for close attention, saying that surveys and forecasts suggesting it would settle at around 3% in 2026 to 2028 would mitigate the risk of a persistent inflation undershoot.
(Reporting by Padraic Halpin; editing by William James)
