Euro zone inflation to remain 'too high for too long': Bank of Spain deputy chief

Inflation in the euro zone is expected to decline further over the remainder of 2023 but would stay above the European Central Bank's 2% target for an extended period of time, Spain's deputy central bank governor Margarita Delgado said on Friday.

"Inflation continues to decline but is still expected to remain too high for too long," Delgado, who also sits on the European Central Bank's supervisory board, told a financial event in Pamplona according to a speech posted on the Bank of Spain web page.

Delgado, who is among the main contenders to become the ECB's new supervisory chief, did not say if rates were likely to rise further at the next ECB meeting in mid-September, although the wording from its meeting in July was "slightly modified so as not to rule out a possible pause" in September.


She added that the past rate increases continued to be transmitted forcefully and that financing conditions have tightened and were dampening demand, "which is an important factor in bringing inflation back to target" for the ECB, which will stick to a data-dependent approach on rate decisions.