(Bloomberg) -- European Central Bank Executive Board member Isabel Schnabel appears to have become more concerned about the euro-zone economy.
In a presentation for an event Thursday in Stuttgart, she said the “euro-area economy is stagnating,” that “surveys signal slowing economy” and that there are “increasing signs of softening” in the labor market, though it remains resilient.
The slides offer a more pessimistic view on the region than a presentation Schnabel gave just a week ago. It follows business surveys this week that suggested a possible contraction in the economy and prompted investors to bet on faster interest-rate cuts.
On Thursday, Schnabel also said:
- Services inflation is keeping core inflation at elevated level globally
- Inflation expectations of firms and households have come down significantly
- Disinflation remains on track
- Loan rates have started to come down from high levels, but bank lending remains muted
- Strong wage growth is starting to ease, but catch-up process not yet completed
- Productivity growth has disappointed but is projected to recover
- Firms increasingly absorb higher wage costs in their profit margins
- Private consumption still expected to be main growth driver as Germany underperforms
- Click here for full presentation
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