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MNI BRIEF: ECB Alert To Possible Faster Path To 2% Target

(MNI) London

Euro area inflation is extremely unlikely to permanently exceed 2% as a result of the ECB's current monetary policy setting, Executive Board member Isabel Schnabel said in a speech Monday, thought the combination of expansionary fiscal and monetary policy arising from the Covid-19 crisis may "finally chart the path out of the low interest rate environment."

But the ECB is "diligently monitoring" whether its forecasting assumptions, according to which inflation is projected to reach 1.5% in 2023, underestimate the possibility of higher inflation in the years ahead. "The real question is whether we can reach our inflation target of 2% any sooner than we are now forecasting." Schnabel said.

MNI London Bureau | +44 20 3983 7894 |
MNI London Bureau | +44 20 3983 7894 |

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