ECB can’t be complacent as only partial progress made on inflation: Lane By Reuters

ECB can't be complacent as only partial progress made on


© Reuters. FILE PHOTO: European Central Bank Chief Economist Philip Lane speaks during a Reuters Newsmaker event in New York

FRANKFURT (Reuters) – Inflation will persistently undershoot the European Central Bank’s target for years to come and a strong euro will further dampen price pressures, leaving no room for complacency, ECB chief economist Philip Lane said on Friday.

Writing in a blog post a day after the ECB left its policy unchanged and took an unexpectedly benign view on growth and inflation, Lane warned that the deflationary impact of a historic recession has only been partially offset.

Lane’s comments that more data in the coming months would help calibrate policy could also reinforce market expectations that the ECB will expand its 1.35 trillion euro ($1.6 trillion) Pandemic Emergency Purchase Programme later this year.

“Inflation remains far below the aim and there has been only partial progress in combating the negative impact of the pandemic on projected inflation dynamics,” Lane said in blog post.

“It should be abundantly clear that there is no room for complacency.

He said inflation could remain negative for the rest of the year but also noted that figures for August, which included an unexpectedly big drop in underlying inflation, were distorted.

Still, he pointed to the impact of the strong euro as another factor that will prove a drag on prices.

“The recent appreciation of the euro exchange rate dampens the inflation outlook,” Lane said. “Headline inflation is expected to remain persistently low over the medium-term, notwithstanding a gradual pick-up over the projection horizon.

ECB President Christine Lagarde argued on Thursday that the euro would be “monitored carefully”, a disappointing statement for many, who had expected a stronger comments to talk down the currency.

($1 = 0.8450 euros)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *


About us

InvestLab is a financial services technology company focused on the global trading market. Founded in 2010 in Hong Kong, the company develops trading, market data, and social research products that enable individual investors and small to mid-size brokers to access global markets. We provide brokers and financial institutions cross border capabilities for retail investors into 43 markets globally.


CONTACT US

CALL US ANYTIME