ECBank Vice President: The ECB Will Decide the Interest Rate Level Based on the Data

ECB Vice President Guindos: So far, our unprecedented policy rate hikes have passed through to tighter funding conditions and we are now starting to see some impact on the real economy.
In particular, services sector inflation needs to be closely monitored, especially labor costs.
The transmission of the recent supply shock to underlying prices has been faster and more widespread than before the pandemic. The services sector is now an important driver of inflation.
The unusual level of uncertainty about the downward trajectory of inflation over the medium term is beginning to ease.
The main impact of our tightening policies is expected to be felt gradually this year and beyond.
Underlying price pressures remain strong, but most measures of inflation have begun to show some signs of moderation.
The downside impact of ECB policy (on inflation) is expected to average two percentage points over the period 2023-2025. The European Central Bank will decide the interest rate level based on the data.