(Bloomberg) -- Increases in the cost of core goods in the euro zone have peaked and are likely to slow in the coming months, according to European Central Bank Vice President Luis de Guindos.

“Underlying inflation’s worst moment has passed and it should moderate,” Guindos told an online event Monday organized by Spanish business trade group Foment del Treball.

Stubbornly high inflation prompted the ECB to lift its deposit rate for a 10th straight time last week — raising concerns in European capitals that higher borrowing costs will smother already fragile economic activity. 

Guindos also said:

  • Rising energy prices add another element of uncertainty
  • Tighter financing conditions aren’t yet fully reflected in the economy as monetary policy takes some time to feed through
  • He expects European Union members to agree on new fiscal rules by year-end

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