MNI BRIEF: Core Inflation Decline To Begin Soon - BoI Visco

An unwind of the current inflation dynamic lags will drive core inflation lower in coming months, Bank of Italy governor Ignazio Visco said Thursday, as the sharp decline in energy prices finally filters through.

Speaking in London, Visco said if inflation remains sticky, it would largely be due to the rigidity of firms increasing profit margins and that could trigger second-round effects that would push the European Central Bank into additional hikes.

Visco stressed that the risks of doing too little were equal to those of doing too much and called for closer attention to the current deterioration of credit that could yet get worse due to the monetary policy lags.