European Central Bank Vice President Boris Vujcic stated that, given inflation is expected to remain high for a longer period, the European Central Bank’s decision to raise interest rates is “prudent.”

He stated in London on Tuesday that, at the same time, most long-term inflation expectations remain aligned with the European Central Bank’s 2% target level, and the current pace of wage growth does not show any knock-on effects. “Both overall inflation and core inflation will remain high for a longer period — until 2027,” said Vujcic, who took over as European Central Bank Vice President from Luis de Guindos earlier this month. “This is essentially the reason you saw rate action at the last meeting.” On June 11, the European Central Bank raised rates by 25 basis points and is currently assessing whether further tightening is needed in the coming months.